OECS, Energy Management and Energy Efficiency, February 2001

8/14/2019 OECS, Energy Management and Energy Efficiency, February 2001

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REGIONAL SYMPOSIUM ONENERGY MANAGEMENT AND

ENERGY EFFICIENCY

RECOMMENDATIONSAND SUMMARY OF PROCEEDINGS

5 - 7 February 2001Caribbees Hotel

CastriesSt. Lucia

Organised ByOrganisation of Eastern Caribbean States

Natural Resources Management UnitCastries, St. Lucia


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ACKNOWLEDGEMENTS

This Symposium was financed by the Canadian International Development Agency (CIDA) through theEnvironmental Capacity Development Project, a partnership initiative between the Organisation of Eastern Caribbean States (OECS) and CIDA. The Symposium was organised and delivered by the OECSNatural Resources Management Unit.

DISCLAIMER

The views expressed in this document are those of the authors and/or the organisations they represent.The mention of specific companies or of their products or brand names does not imply any endorsementby, and the views expressed do not necessarily reflect the views of, either the Organisation of EasternCaribbean States or the Canadian International Development Agency.

The designations employed and the presentation of material in this publication do not imply theexpression of any opinion whatsoever on the part of the Organisation of Eastern Caribbean Statesconcerning the legal status of any country, territory or city or of its authorities, or concerning thedelimitation of its frontiers or boundaries.

FOR MORE INFORMATION

The Natural Resources Management Unit of the Organisation of Eastern Caribbean States may becontacted at:

OECS-NRMUOECS SecretariatP.O. Box 1383CastriesSt. Lucia, W.I.

Tel: +1-758-452-1847+1-758-451-8930+1-758-453-6208

Fax: +1-758-452-2194

e-mail: [email protected]

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, ortransmitted in any form or by any means, electronic, mechanical, photocopying or otherwise, without theprior permission of the copyright owner. Applications for such permission, with a statement of purposeand extent of the reproduction, should be addressed to the Head of Unit at the above address.


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Organisation of Eastern Caribbean States 2001


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TABLE OF CONTENTS

Page

List Of Abbreviations And Acronyms i

Symposium Summary: 1Context Of The Symposium 1Objectives Of The Symposium 1Recommendations The Symposium For Achieving 2

Enhanced Energy Management And EfficiencyIn The OECS Associate and Member States

LIST OF FIGURES

Figure 1: Preliminary Identification Of Institutional Roles In 3Future Supply Of Electrical Power In OECS Countries

LIST OF ANNEXES

Annex A Symposium AgendaAnnex B PresentationsAnnex C Findings Of WorkgroupsAnnex D List Of Participants


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LIST OF ABBREVIATIONS AND ACRONYMS

AOSIS Association Of Small Island StatesCARILEC Caribbean Electric Utility Services Corporation CAST Caribbean Alliance For Sustainable TourismCDM Clean Development MechanismCIDA Canadian International Development AgencyCEAP Caribbean Energy Action ProgramCEIS Caribbean Energy Information ServiceCERMES University of the West Indies Centre for Resource Management and

Environmental StudiesCHA Caribbean Hotel AssociationCLI Climate InstituteCTO Caribbean Tourism OrganisationCPACC Caribbean Planning For Adaptation For Global Climate ChangeCREDP Caribbean Renewable Energy Development ProgrammeCUBIC Caribbean Uniform Building CodeDFID United Kingdom Department For International DevelopmentDSM Demand Side ManagementECLAC United Nations Economic Commission for Latin America and the

CaribbeanEDF Electricit de FranceEM Energy ManagementEPC Environmental Policy Committee (of the OECS)ESCO Energy Service CompanyGEF Global Environment FacilityNGO Non-Governmental OrganisationNRMU Natural Resources Management Unit (of the OECS)OAS Organisation of American StatesOECS Organisation of Eastern Caribbean States

OLADE Organisation Latino-americano de Energa (Latin American EnergyOrganisation)

REIA Renewable Energy in The Americas (initiative of the OAS)RE Renewable EnergyRET Renewable Energy TechnologySEP Sustainable Energy PlanSIDS Small Island Developing StatesTVET Technical and Vocational Education and TrainingUNFCCC United Nations Framework Convention On Climate ChangeUWICED University of the West Indies Centre for Environment and Development


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REGIONAL SYMPOSIUM ON ENERGY MANAGEMENTAND ENERGY EFFICIENCY

SYMPOSIUM SUMMARY

Context Of Symposium

In June 2000 the Organisation of Eastern Caribbean States (OECS) 1 Environmental PolicyCommittee (EPC) requested its Natural Resources Management Unit (NRMU) to developoptions for enhanced energy efficiency and energy conservation in the Member States of theOECS. The results of the work undertaken by the NRMU were presented to EPC at its meetingof November 2000. Following this presentation, Ministers requested that NRMU preparerecommended policy and public awareness activities on energy management for theconsideration of Ministers and subsequent adoption in the region.

A preliminary meeting to initiate response to the Ministers' instruction was held in November2000. This meeting reviewed the work undertaken by NRMU and considered how best torespond to the Ministers' instruction. The meeting was attended by senior technical officers fromeach of the OECS Associate and Member States together with a number of regional andinternational agencies. At that meeting, it was decided that the most appropriate first response tothe Ministers' request would be to hold a symposium to which all stakeholders would be invitedin order to ensure that the required policy and public awareness activities are appropriatelyfocussed and sensitive to the many various projects currently being either developed orundertaken in the Caribbean to address energy management. Accordingly, the symposiumreported in this document was organised and held.

Objectives Of Symposium

The purpose of this Symposium was to provide a forum to review and discuss the variousinitiatives and programmes in energy conservation and management in the OECS region in orderto:

1. Identify those areas in energy management and efficiency in the OECS that warrantattention.

2. Identify appropriate mechanisms and modalities for coordinating the various energymanagement initiatives and programmes either underway or being developed of relevance to the OECS Associate and Member States.

3. Assist the OECS in formulating the necessary policies and public awareness campaignson energy management and efficiency to respond to the instruction of the OECSEnvironmental Policy Committee.

1 The Associate and Member States of the OECS are: Anguilla, Antigua and Barbuda, British Virgin Islands,Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines.


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Recommendations Of the Symposium For Achieving Enhanced Energy Management AndEfficiency In The OECS Associate and Member States

The Symposium recommended that the following actions are required to achieve enhancedenergy management and efficiency in the OECS Associate and Member States:

1. Participation In Current Initiatives

The OECS Secretariat needs to work very closely with existing initiatives, either developing orunderway. In particular, the OECS Secretariat should consider participating on the SteeringCommittee of the Caribbean Energy Action Program (CEAP) and Caribbean Renewable EnergyDevelopment Programme (CREDP) initiatives. The purpose of establishing this linkage will beto: (i) ensure congruency between activities that may be taken by the OECS or its Member Statesand those of CREDP and CEAP; (ii) identify gaps in CREDP or CEAP initiatives which OECSmay have to address; (iii) ensure that the needs of the OECS Member States are fulfilled by thetwo proposed programmes; and (iv) inform CREDP and CEAP of the initiatives undertaken inOECS countries and which may be relevant to those projects.

2. Policy Options The OECS Secretariat needs to develop a harmonised framework for Energy Management AndEnergy Efficiency Policy that could then be adopted at the national level by OECS countries.The required policy should address institutional restructuring along the lines presented in Figure1 in order to ensure a reliable supply of energy within a framework that establishes, and createsopportunities for: (i) energy efficiency; (ii) flexible options for the generation and distribution of electricity; (iii) application of renewable energy; (iv) more effective regulation of the energysector; and (v) fiscal and other incentives for application of renewable energy and energyefficient technologies. All institutional restructuring initiatives should include consideration of the sustainability (financial and otherwise) of those institutions independent of donor funding.

3. Public AwarenessPublic awareness activities can be highly effective in achieving enhanced energy managementand energy efficiency. However, care should be taken to not create consumer expectationsregarding energy efficiency that cannot be met. Capacity building is needed in both the publicand private sectors and work is required in the areas of technical standards and labelling insupport of energy efficiency. Awareness activities need to be linked to policy, institutional andlegislative frameworks, particularly those that reduce import tariffs for renewable energy andenergy efficient equipment and through programmes such as "green certification" initiatives.

Specific recommendations for activities related to awareness include: (i) revision of theCaribbean Unified Building Code (CUBIC) to include energy efficiency and renewable energyissues; (ii) application of catalytic demonstration projects in the agricultural and industrialsectors; (iii) development of a database for the OECS countries of those signatories to theUnited Nations Framework Convention On Climate Change (UNFCCC) who have completedtheir inventory of the greenhouse gases; (iv) dedicated training in energy planning, the conductof energy audits and energy accounting; (v) consideration by the Technical and VocationalEducation and Training (TVET) initiative of the OECS to include focus on such issues ascertification in energy technology and energy management at the technical level.


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Figure 1Preliminary Identification Of Institutional Roles In

Future Supply Of Electrical Power In OECS Countries

INSTITUTIONAL ENTITYDESIREDPOWERSUPPLYCRITERIA

Utility/ Independent

PowerProducer

Utility Regulator Government Consumer NGOs EquipmentSuppliers/

ServiceProviders

Secure,Reliable andHigh QualitySupply

Effectiveoperation of facilities

Monitoring of utility/independentpower producersupply

Effective policy andlegal frameworks

Compliancewith businessregime andstandards

Advocacyandmonitoringof powersupply

Effectiveservicing of power suppliersand users

Effective UseOf RenewableSources

Incorporaterenewableenergy inoperations and

energygeneration mix

Monitor supplyRequire energypricing frameworkssupportive of

renewable energy

Policy and legalframeworkssupportive of renewable energy

Support forrenewablesources of energy

Advocacy Develop localcapability tosupply renewableenergy sector.

Undertaketechnologydevelopment andtransfer

OptimiseDemand SideManagement/ Conservation

Buy in andsupport forDSMinitiatives

Provide support forDSM/conservation

Policy andlegislation insupport of DSMDelivery of DSMactivitiesLabelling standardsfor energy efficienttechnologies/ products

Invest in energyefficienttechnologies andpracticesCompliancewith DSMlegislation/ policy

Advocacyandpromotion of DSM.Delivery of DSMactivities

Localavailability of energy efficienttechnologies,products andservicesCompliancewith DSMstandards

Ensure Least

Cost ToConsumer

Operate

efficiently

Transparent rate

regulation based onlife cycle costs forregulated utilities andsale price regulationfrom independentpower producers

Policy/legislation

requiring energypricing based onlife cycle costing

Timely payment

of bills

Advocacy Competitive

pricing

EnsureEnvironmentalAnd FinancialSustainability

Compliancewithenvironmentand otherstandards.Establish basisfor profitability

Monitor compliancewith environmentalrequirements andother standards

Policy/legislation insupport of environmental andsocial standards

Behave incompliance withlaws andbusinesspractice of energy suppliers

Advocacy Compliancewithenvironmentand otherstandardsEstablish basisfor profitability

This Figure identifies the roles that should be played by the various identified institutional "entities" in order toachieve the identified desired power supply criteria. For example, the Figure identifies that the role to be played by"equipment suppliers/service providers" in order to achieve "secure, reliable and high quality supply" of power is toensure "effective servicing of suppliers and users" .


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A programme is being financed by GTZ on energy and sustainable development that includesworkshops on energy management; as part of this programme, the OECS Secretariat shouldrequest (through the Latin American Energy Organisation) similar workshops for the OECScountries.

4. Coordination of AssistanceThe OECS Secretariat should source and coordinate provision of technical assistance andfinancial assistance for the preparation of national sustainable energy plans, similar to that beingprepared for St Lucia.

5. Address The Transportation Sector

Energy use in the transportation sector requires addressing. Strategies are required at thenational level to rationalise and optimise the use of hydrocarbon fuels. Issues in this regardinclude the import of second-hand or refurbished fuel inefficient vehicles, and the need topromote the use of more fuel efficient vehicles.


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ANNEX A

SYMPOSIUM AGENDA


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Organisation of Eastern Caribbean StatesNatural Resources Management Unit

REGIONAL SYMPOSIUM ON ENERGY EFFICIENCY AND ENERGY MANAGEMENT

5 7 February 2001Caribbees Hotel, Castries, St. Lucia

Monday 5 FebruarySession 1: Context and Objectives of Symposium; Session Chair: Dr. Vasantha Chase, Head, OECS-NRMU Objective: Identification of why the symposium is being held

9:00 Chairpersons Greeting: Dr. Vasantha Chase, Head OECS-NRMUInvocation: Sirah Ferdinand, OECS-NRMUWelcoming Remarks: Director OECS Secretariat

Bishnu Tulsie, Chief Sustainable Development Officer, Ministry of Planning,Development, Environment and Housing, Government of Saint Lucia

Keynote Address: Hon. Calixte George, Minister Communications, Works, Transport and PublicUtilities, Government of Saint Lucia

Vote of Thanks: Valerie Isaac-St. Hill, OECS-NRMU

10:00 BREAK

Session 2: Who Is Doing What; Session Chairs: Doug Hickman and Valerie Isaac-St.Hill, OECS-NRMU Objective: Identification of current activities

10:15 Overview Of Session10:20 Sustainable Energy Plan For St. Lucia: Bishnu Tulsie, Manager, Sustainable Development Unit,

Government of St. Lucia10:40 Renewable Energy In Barbados: Dr. Oliver Headley, Director, Centre for Resource Management and

Environmental Studies, Bridgetown, Barbados.

11:00 Renewable Energy In The Americas: Mark Lambrides, Project Manager, Organisation of AmericanStates, Washington D.C.11:20 Small Island States Energy Initiative: Tom Roper, Climate Institute, London, United Kingdom11:40 Energy Efficiency In The Caribbean: Mentor Poveda, Organizacion Latino-americano de Energia

(OLADE), Quito, Ecuador12:00 Caribbean Renewable Energy Development Programme: Mona Whyte, Caribbean Energy Information

Service, Kingston, Jamaica12:20 Caribbean Planning For Adaptation To Global Climate Change (CPACC): Neville Trotz, CPACC

Project Manager, Bridgetown, Barbados12:40 Clean Development Mechanism: Mona Whyte, Caribbean Energy Information Service, Kingston,

Jamaica

1:00 LUNCH2:00 Policy Framework For Enhanced Efficiency Of Energy Use In The OECS States: David Lea, Lewis

Engineering2:20 The Changing Electric Utility Sector: Basil Sutherland, CARILEC, Castries, St. Lucia2:40 Identification of any other relevant initiatives

3:00 BREAK

3:15 Discussion Of Current Activities4:30 Close of Day 1


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Tuesday 6 FebruarySession 3: How Best To Meet The Requirements Of OECS Ministers; Session Chair: Dr. Vasantha Chase, Head

- NRMU Objective: To delineate broad actions to be undertaken by OECS-NRMU to meet the request of the OECS

Ministers

9:00 Overview of Session

9:15 Panel-Led Discussion of Gaps and Needs

10:15 BREAK

10:30 Plenary discussion of need for actions within the following categories: policy development, awareness-building, private sector perspectives, participation of OECS Member States in on-going/new initiatives,capacity building, institutional restructuring, other. Discussion to culminate in agreement of categoriesof need and major related actions.

1:00 LUNCH

Session 4: Development Of OECS-NRMU Actions; Session Co-Chairs: Keith Nichols, OECS-NRMU, and Peter

Murray, OECS-NRMU Objective: To map OECS-NRMU actions to meet the requirements of Ministers

2:00 Introduction to Session 4

2:15 Plenary identification of action categories to be addressed by OECS-NRMU

3:00 BREAK

3:15 Break out groups to propose NRMU activities within the broad action categories in which NRMUparticipation is agreed to be useful.

4:30 Close of Day 2.

7:00 9:00 R ECEPTION : B AY G ARDENS H OTEL ; TRANSPORTATION PROVIDED

Wednesday 7 FebruarySession 5: The Way Forward; Session Chair, George Goodwin Jr, Director Functional Cooperation, OECS;Objective: To reach agreement on overall timing and next steps of actions to be taken by OECS-NRMU

9:00 Overview of Session

9:15 Plenary presentation of break out group recommendations from Day 2

10:15 BREAK

10:30 Plenary discussion of OECS-NRMU activity, timing and next steps

12:30 LUNCH

1:30 Summary of OECS-NRMU activity, timing and next steps

2:00 Close of symposium.


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ANNEX B

PRESENTATIONS


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In recognition of the above, the OECS mustappreciate that their social and economicdevelopment may be placed at risk, since OECScountries may be denied the opportunities toutilize industrial strategies and or technologieswhich were once used without restriction, by moreindustrialized and developed countries. Thechallenge to the OECS is to find ways to respond

to the duality of economic development andenvironmental sustainability.

In recognition of the need, the St. Luciagovernment has over the last few yearsundertaken a number of initiatives forencouraging energy efficiency and conservationand for encouraging the use of renewable sourcesof energy. These initiatives includes:

The removal of taxes and duties onrenewable energy technologies

Removal of consumption taxes on energyefficient compact fluorescent lamps. Setting up a Solar Photovoltaic system as a

demonstration unit. Removal of consumption taxes on table top

stoves in order to discourage wood burningin rural poor households.

St. Lucia has entered into an agreement witha Canadian based firm to develop a windfarm capable to adding 13.5 Mega Watts tothe national electricity grid.

The signing of an agreement for continued

geothermal explorations on the island. The development of sustainable energy planin collaboration with the Washington BasedClimate Institute. This plan sets targets forreduced consumption of energy obtainedfrom fossil fuel and also sets target forincreasing the percentage of energy obtainedfrom renewable sources. A meeting forstakeholders to discuss the plan is scheduledfor February 8 th , 2001.

The Government is also currently reviewingthe policy framework under which the power

sector operates.Responding to the twin challenges of economicdevelopment and environmental sustainabilitymay require substantial financial outlays as weseek to develop, access and adapt cleaner energytechnology. We recognize though, that in manyinstances, what is required for sustainable energyuse is a program directed at improvements in theefficiency with which energy is used in the OECS

as well as increased utilization of lower costrenewable forms of energy.

A few years ago, the Ministry of Planning andsustainable development, through the adoption of an energy conservation plan at its offices inCastries, was able to generate annual savings of $95,000.00 in electricity costs. This was achieved

not by retrofitting but by adopting some commonsense practices and the prudent utilization andmanagement of the building and the energyconsuming devices housed within it.In recognition of the dilemma which faces us as acountry grouping, the OECS Ministers of theEnvironment instructed the OECS-NRMU toundertake initiatives aimed at improving energyconservation and energy management in the sub-region. This three day symposium which startstoday, is but one of the steps to be taken in pursuitof this objective.

I wish to take the opportunity to thank theorganizers the OECS-NRMU and the sponsors,the Canadian International Development Agencyfor hosting this workshop.

As you begin your deliberations, I implore you toconsider the following:

The workshop should pay particular attentionto technology transfer methodologies, suchthat appropriate technologies which are

developed or adapted for the sub-region willfind broad acceptance amongst stakeholders. In developing and adapting technologies, a

primary objective should be the developmentof new employment and businessopportunities within the energy sector, for thepeople of the OECS.

We think it is desirable that as far aspossible, mature technologies should bechosen over experimental ones, such that thetechnologys reliability and cost effectivenessis assured.

An action plan should be developed, whichclearly outlines the energy issues facing theOECS and the measures to be taken toresolve them.

Finally, you need to ensure that the solutions youprescribe are acceptable to the stakeholdersinvolved in energy generation, utilization,conservation and management. I therefore urgeyou to work assiduously over the next three daysto achieve that end.


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Sustainable Energy Plan for St Lucia

Bishnu Tulsie, Manager, Sustainable Development Unit,Government of St Lucia

The key background features of St Lucia as itrelates to energy use are: its relatively smallphysical size, low population, high demand foreconomic growth as well as the linkage betweeneconomic activity, particularly a rapidly growingtourism industry, and energy consumption.. Interms of energy use, the following main issues canbe highlighted:

Limited commercial energy resources. Shortage of trained human resources

Dependence on petroleum imports. The main end user is the transport industry. Relatively small industrial energy

consumption. Increasing importance of energy used for the

tourism sector. Increasing energy demand. Gradual increase in the use of Renewable

Energy Technologies (RETs). Potential for energy efficiency initiatives. Potential for the use of RETs geothermal.

Currently, a Sustainable Energy Plan for St Luciais in the process of formulation. However, interms of other initiatives, difficulties had beenexperienced with a geothermal energy project.Little had resulted from the energy initiatives of the late 1970's and early 1980's, driven by thefalling oil prices and loss of will to proceed. Interms of barriers, financing is an issue in theinvestigation of renewable energy especiallyagainst the background of limited public andgovernment awareness and lack of energyefficient equipment on the market. The regulatoryframework for providing power is also notsupportive of some of the initiatives thatgovernment would desire to undertake. Anotherbarrier is the apparent lack of interest by theutility company in energy efficiency andconservation and renewable energy projects.

The Government of St Lucia took the decisionthree years ago to address one of the major

problems - the absence of any policy framework and lack of direction as far as the development of the energy sector is concerned. In the late 1970'sand early 1980's, St Lucia established an "energydesk", which developed into the departmentresponsible for energy planning. This departmentpromoted energy initiatives but in anuncoordinated manner. It was decided thereforeand an announcement was made at the FifthConference of Parties to the UNFCCCConvention that an energy plan would be

developed. The OAS and the Climate Institutehave been partners in the development of thisinitiative. The plan has four main areas:

The supply of power and options to diversify Options to reduce the demand Energy efficiency and conservation. Public education and awareness.

Some parts of the Plan are already beingimplemented and there is a proposal for a windfarm. All the technical issues have been resolved

already and financing in place. It is thereforeanticipated that once the utility company hassorted out the issues involved in purchasing powerfrom independent producers, the formers boardof directors will agree for the projects to proceed.

There are many lessons to be learnt from thisproject, for example, capacity displacement, andtechnical issues of maintenance bearing in mindthat St Lucia is in the hurricane zone. This windfarm will therefore be a useful demonstrationwhen implemented for small island states.

With regard to geothermal energy, there has beenseveral and costly failed attempts. It has beenrealised that exploration must be undertaken awayfrom the Sulphur Springs. Currently, efforts arebeing made to acquire all the necessary funding tocontinue this initiative. In terms of solar energy,demonstration projects have been identified butthese are at the higher end of costs.


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The users of energy must be targeted on a wholerange of issues from the benefits of renewables toconservation and efficiency. There is a need to setstandards and extend the public education andawareness campaigns. From a survey conducted afew years ago, it was observed that a small group

of users in St Lucia account for approximatelysixty percent of the power generated. Therefore,this small group could be targeted with specificactivities. Also, the mechanism to encourage thedevelopment of energy service companies is alsobeing examined as part of the Plan.

Renewable Energy in Barbados

Dr. Oliver Headley, Director,Centre for Resource Management and Environmental Studies

A monthly distribution of solar energy the mainrenewable energy (RE) for the Caribbean region -was presented utilising overhead transparencies.

It was indicated that there were a number of factors namely, political, economic, sociologicaland technological, which impinge on RE in theregion. Also, there are other driving factors one of which was climate. Additionally, the amount of carbon dioxide and other greenhouse gases isincreasing, resulting in the harmful effect of melting of the polar ice caps.

Barbados now has a significant number of solarwater heaters both in residential and hotelproperties, partly due to Governments fiscal

incentives. Also solar driers have been profitablyused for example, in drying onions, hay andplastics in Antigua, Barbados and Trinidadrespectively. Financial support for these research

projects was obtained from international fundingagencies.

The sugar factories which burn bagasse forprocessing and electricity, contributeapproximately 1518 % of Barbados primaryenergy. The power company is interested inphotovoltaic (PV) energy which is also used topower air conditioners and ice machines as well aslighting for the Harrison's Caves.

The intention is that Barbados will have 40%renewable energy capability by the year 2010through bagasse cogeneration, wind turbine farms,waste combustion, ocean thermal energy

conversion, distributed PV and the production of hydrogen from renewable energy to power fuelcell vehicles.

Renewable Energy in The Americas

Mark Lambrides, Project Manager Organisation of American States, Washington DC

Renewable Energy in The Americas (REIA) is aninitiative being undertaken by OAS through theUnit for Sustainable Energy and the Environmentwhich involves a number of areas outside energy.REIA which was created by an organisation calledthe US Export Council for Renewable Energy waslaunched in 1994. After several years of work,there was a move to take REIA's initiatives into

more neutral entities, consequently the effort wasmade to transfer REIA to OAS.

Currently, REIA is engaged in the services aspectsof renewable energy. Primarily, a considerableamount of the Project Manager's work is in policyand regulatory reform to establish a framework toallow clean energy technology to take hold.Much work has been done in providing regulatory


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services between the private and public sectors,attempting to engage both types of organisationstogether with NGOs in making an effect on theProject.

A great deal of REIA work is undertaken inpartnership with organisations to respond to theneeds of member countries and in one case - theSustainable Energy Caribbean Islands Initiative isan activity that REIA is currently engaged withthe Climate Institute WINROCK International,OAS and other organisations. Some of the work that REIA is currently engaged in involvesassisting St Lucia in the development of asustainable energy plan. In the case of theDominican Republic, REIA is involved inprivatisation, looking at the impact of cleanenergy and providing alternatives for the

incorporation of clean energy technologies; thiswork is being done by WINROCK International.In the case of Guatemala, REIA is working on asimilar activity as in St Lucia i.e. formulating therenewable energy law. In this area of policy andregulatory reform, REIA has prepared aRenewable Energy Policy manual. The manualwas written largely from the perspective of SouthAmerica where privatisation of the energy sectorhas taken place, but much of it is applicable toother countries.

REIA is also involved in the CaribbeanRenewable Energy Development Project

(CREDP) and is working together with OLADEin an effort to initiate the Caribbean RegionalEnergy Action Project (CEAP). REIA is workingspecifically with the governments of Guyana andSuriname to develop proposals for ruralelectrification. REIA has also been workingactively in hemispheric initiatives; at the Summitof the Americas there is an Energy Chapter andREIA has been working closely with theHemispheric Energy Initiative.

Some of the challenges that this Region faces interms of incorporating renewable energy into itsoverall co-generation plan are:

Renewable energy systems requires the bulk of its resources upfront unlike fossil fuelplants.

Project preparation time, resource assessment,land, concessions etc.

Global emissions are not accounted for fossilfuel plants in the overall cost accounting.

To address these challenges, governments must:

Start setting goals for the sector Set clear objectives for achieving these goals Encourage collaboration between the private

sector and public sector in meeting theseobjectives.

Consider the way in which energy is costed interms of the initial costs and long terms costs.

Small Island States Energy Initiatives

Hon. Tom Roper, Climate Institute, London, UK

The Working Group I of the IDCC reported thatthere is likely to be an increase of up to 5.8degrees celsius between now and the end of this

century. Also, it is likely that there will be both anincrease in intensity and potentially, an increase innumber of extreme weather conditions such ashurricanes and monsoons. The small islands aremore vulnerable to this type of weather and theClimate Institute (CI) has been very muchinvolved in discussions with AOSIS in particular,in looking at ways in which these membercountries can be assisted in changing their energy

systems. The Small Island States can, bypromoting a clean energy environment set anexample for the rest of the world. Recently, Mr.

Slade, Chairman of AOSIS and Ambassador of Samoa to the UN made the point that too muchof our national budget (up to 12%) is spent onfossil fuel for diesel generation of electricity.

In terms of barriers, there is generally a lack of commitment on the part of government ministersand officials in both developed and developingcountries. It was significant that about two years


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ago, the Caribbean and Latin AmericanDevelopment Bank produced a report whichstated that out of all the issues that arose from theBarbados Declaration in 1994, energy was theleast important in terms of government's responsesand investment as well as private investment.

It is particularly difficult for SIDS to obtaininternational attention and consequenceassistance. In response to Mr. Slades challenge,five organisations (Climate Institute, CounterpartInternational, Forum for Energy andDevelopment, OAS and Winrock International)came together to develop a new initiative to assistcountries that wish to advance themselves assustainable energy islands. The aim of CI is tohelp transform SIDS energy systems torenewables and encourage energy efficiency as

well as to link energy with national developmentand climate change policies. The CI is also veryconcerned to provide a link between the Islandcountries and those with the financial andtechnical expertise to implement sustainableenergy plans.

The Institutes tasks are to:

Identify and recruit candidate countries Develop sustainable energy plans Implement the plans Build capacity and awareness Enhance publicity local, national and inter-

national Replicate and expand country commitments to

regional and global levels.

In developing a Sustainable Energy Plan (SEP),there is a need to:

Develop an agreed programme protocol withgovernment ministers

Assemble a project team Inform and involve the community Involve local stakeholders including utilities Conduct resource and technology assessments

to identify opportunities. Identify commercially viable projects and

funding mechanisms. Obtain government agreement to the SEP.

Caribbean Energy Action Programme (CEAP)

UNDP/GEF/OLAD PROJECT: DEVELOPMENT OF ENERGY EFFICIENCY IN THE CARIBBEAN

Mentor Poveda, Organizacion Latino-americano de Energia (OLADE)Quito, Ecuador

The project to develop energy efficiency in theCaribbean is under the framework of theCaribbean Energy Action Program (CEAP). Thisprogram intends to create the conditions needed todiversify energy supply so as to meet therequirements of industry and the population of allthe countries, including those that are not

members of OLADE, through international-institutional coordination, in order to optimiseboth the resources and the results of the energyprojects implemented by different internationaland local institutions.

This energy efficiency project is aimed atdismantling barriers to energy efficiency in the

electric energy sector of 16 Caribbean countries, 9OLADE member countries and 7 non-membercountries. Taking into account the currentsituation of the electric power sector, this projectis aimed at tapping this subsectors potential toimprove efficiency in electric power distributionand use. It is felt that the projects activitiesshould focus on the regions electric power

distribution utilities, because they would be ableto provide the means to gain access to theconsumers of electric power service.

As for the demand-side of electricity, in theCaribbean region, the most representative sectorsfor electric power consumption are tourism, theresidential sector, and the commercial sector. It isbelieved that these consumers will obtain many


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benefits from their investments when participatingin programs promoting the efficient use of electricity.

The project is under the responsibility of thefollowing institutions: Latin American EnergyOrganization (OLADE) as the principal ExecutingAgency, Caribbean Energy Information System(CEIS), University of the West Indies Centre forEnvironment and Development (UWICED),Caribbean Electric Utility Services Corporation(CARILEC), and Organization of American States(OAS).

The overall project objective is to dismantle thebarriers to application, implementation, anddissemination of least-cost energy efficiencytechnologies and to promote the efficient

distribution and use of electrical energy in thecountries of the Caribbean.

At the present time a preliminary phase is beingdeveloped, with the objective of identifying thebarriers to the satisfaction of the players of theenergy sector, supported by the credibility thatOLADE, UWICED, OAS, CEIS and CARILEChave in the region. On the basis of the barriers thatare identified, projects will be set up toincorporate activities for the elimination of thethese barriers, with the consensus of the energy

sector leaders of the Caribbean.

In brief, this phase has two main objectives:

Identification of the barriers against theenergy efficiency.

Presentation of a project proposal for theelimination of the identified barriers.

The implementation of the actual phase lies withfive subcommittees for the following areas of activities:

Energy Policy and Regulation Financing Alternatives Commercial Enterprise Development Energy Efficiency Awareness and

Information Management Training and Human Capacity BuildingOne of the participating institutions will be incharge of each activity.

Each subcommittee has specific objectives, whichshould be addressed without neglecting the otherareas; likewise, the analysis conducted for eachobjective should be done in coordination with allother different topics.

Objectives for each subcommittee

Energy Policy and Regulation: Ensure theparticipation of energy policymaking institutionsand regulatory agencies in order to establish alegal framework that establishes an environmentthat is propitious for the development of efficiency.

The energy policy and regulatory component willaddress the current legal framework for the energy

sector in each country. On a country-by-countrybasis, this will include a description of theorganizational configuration of the sector and anoverview of the current and regulatoryframework. Furthermore, energy policy reformplans will be described. Accordingly, the projectteam will highlight the key barriers andopportunities for deployment of energy efficiencyinitiatives. These findings will form the basis forrecommending regional and national policy andregulatory strategies that will enable a favourableenvironment for energy efficiency.

Financing Alternatives: Identify financing needsand sources to carry out the energy efficiencyprograms. The study will help to identify unmetneeds, and financial solutions and operatingmeans in the regional financial system will beproposed.

In the area of financing alternatives for energyefficiency the project will review existinginstitutions, mechanisms and criteria for financeamong local, regional, and multinational

organizations. Likewise, it will assess interest andfinancial requirements among private industry inthe region, as well as the electric utilities. Thisanalysis will include an assessment of the specificfinancing requirements for distinct phases of project development (i.e., pre-feasibility,feasibility, project finance) in sector. This willpermit the analysis of deficiencies in the financialsector with regards to potential investments in


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energy projects. As a result of this component,recommendations will be offered regarding theneed to establish new, or strengthen existing,financing programs that will address the needs of energy efficiency projects.

Commercial Enterprise Development: Review of market opportunities to develop companies thatfinance efficiency programs and develop linkagesbetween national energy sector institutions andsuppliers of equipment and services in the area of energy efficiency. Creation of a regional andinternational cooperation base to support long-term energy activities.

A critical component of this project will evaluateand strengthen opportunities for commercialenterprise development. This area will include anevaluation of the existing private institutionsthroughout the region and beyond, with capabilityand willingness to engage in projects of thisnature. It will solicit input regarding thecommercial requirements for investment in thesector. The project will seek to ensure theavailability of energy efficiency equipment viaprivate companies. Likewise, it will be critical toenable the provision of specialized energyefficiency services (Such as those provided byESCOs) throughout the region. The project willidentify opportunities to establish linkages amongsuppliers of products and services and highlightthe market potential offered by the countries of the region.

Energy Efficiency Awareness and Information Management: Development of programs thataddress the lack of knowledge on the part of consumers, producers, and electric power utilitystaff about the benefits that are associated to theimplementation of energy efficiency programs.This objective can be reached by consolidating

agencies providing information on efficientequipment and technological development.

Developing sufficient support for energyefficiency programmes requires broad energyefficiency awareness and informationmanagement. In many cases there is a lack of experience regarding the potential benefits offeredby energy efficiency. This is particularly salientamong the leaders of local institutions, such aselectric utilities, industry, commerce, and thetourism sector. It is also critical among residentialcustomers as well as all consumers of electricservices. This project will recommend strategiesfor building awareness among all relevant playersin the sector. A key input for this analysis consistsof the management of energy data and statistics,as well as commercially available technologies

and services.

Training and Human Capacity Building: One of the most important barriers already identified isthe perception of the managers of the electricpower utility regarding excess risk in energyefficiency investments. This lack of knowledgecan be partially addressed by trainingprofessionals in these power utilities. And overall,successful energy efficiency programs requirewell-trained professional individuals.

The training and human capacity buildingcomponent will assess the existing level of expertise among the electric utility staff,government officials, and other relevant energyinstitutions. Successful integration of energyefficiency programs requires a well-trainedprofessional base of technical, administrative,financial, and political individuals. To the extentthat the regions energy institutions lack theappropriate capacity to initiate and/or implementsuch programs, this project will recommendsolutions for developing such capability, via

regional and national training programs.


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Region devised a work plan which was finalisedby April 2000. The power sector was identified asbeing the key sector to start the baseline study in,followed by waste, tourism and transportationsectors. A team of regional experts was selectedmainly from the utility companies namely,Trinidad and Tobago Electricity Corporation,Bahamas Electricity Corporation, the BelizeElectricity Corporation and Daniel & DanielEngineering Inc.

The goal, from a regional standpoint was tosimplify and renew projects, attract investmentand achieve development. Work in this areafocussed mainly on plant filter capacity additions.Data were collected on the three most recentcapacity additions at fuel sites in each country.Based on the analysis of the data, the study found

that the Caribbean power sector met the criteriafor a regional baseline approach. Also most of thepower sector companies were generatingelectricity from oil with similar technology, withthe exception of Trinidad and Tobago and Belize.Additionally, it was observed that the CDMpotential in the Caribbean is estimated to generateUS$140 million in 35 emission reductionsparticularly during the period 2008-2012. It wasalso found that most of the countries hadindividual a per kilowatt hour initial rate forrecent capacity additions that are similar to the

overall regional emission rate. In addition, it wasestimated that by 2012, emissions from newpower additions would add some 85 milliontonnes of fuel emissions. However, it was foundthat with 15% more of these additions from cleanair technology, the Region could obtain 1.5

million tonnes of fuel reduction. Nevertheless, indeveloping new CDM projects, the currentstatistics need to be updated to reflect more recentestimates. The study also recommended that someadditional bench-mark studies be examined.

According to preliminary investigations, the useof waste products is seen as having greatpotential, particularly in industry and even moreso with the Land Fill Gas Capture Project. Thepossibility of defining and setting a singlebenchmark that could apply for the Region as awhole was advised. Thus, any project having avalue higher than the regional bench mark wouldbe able to claim internal emission studies for thesaving. A small group met at a regional workshopin St Lucia and focussed primarily on the issue of technology for landfill gas which was identified as

an area to examine. The group found that it wasfeasible to pursue a baseline exercise in that area,but subject to more detailed examination, inparticularly, the volume and production of waste.

The approach for the tourism sector needs to befurther explored and would involve otherinstitutions such as CTO, CHA and CAST .

With regard to the transportation sector, it wasfound that opportunities for fuel substitution werelimited. While the vehicle fuel efficiency projectcan be pursued, most of the opportunities werecountry or fuel specific and would requiresignificant institutional capacity building.

Caribbean Planning For Adaptation For Global Climate Change

Neville Trotz, CPACC Project Manager Bridgetown Barbados

Caribbean Planning For Adaptation For GlobalClimate Change (CPACC) has its origin in theSIDS conference in Barbados, 1994 where thegovernments asked the OAS to assist the Region

in defining a project dealing with climate changeadaptation. The OAS with their own resources,assisted the Region through a series of nationalconsultations to define a project which eventuallywas funded by the GEF. The project duration is


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four years, commencing 1997 and terminating inDecember, 2001.

The overall objective of the Project is to supportCaribbean countries in preparing to cope with theadverse effects of global climate change,particularly sea-level rise in coastal areas, throughvulnerability assessment, adaptation, planning andrelated capacity building.

In terms of organisation of the Project, the GEF isthe funding mechanism in which the World Bank is the implementing agency and the OAS, theexecuting agency. At the regional level, theproject is implemented through a small unit-Regional Project Implementation Unit (RPIU)under UWICED which is based in Barbados.However, the most important unit in terms of implementation is the National ImplementationCoordinating Units.

The Project has four regional components namely:

Design and establishment of sea level/climatemonitoring network.

Establishment of data bases and informationsystems.

Inventory of coastal resources and use. Formulation of a policy framework for

integrated adaptation planning and

management.

The pilot components are being undertaken inspecific countries. Coral reef monitoring is inJamaica, the Bahamas and Belize; the coastalvulnerability and risk assessment in Grenada,Barbados and Guyana; the economic evaluation of coastal marine resources in Trinidad and Tobago,Dominica and St Lucia; the formulation of economic/regulatory proposals in Antigua andBarbuda and St Kitts and Nevis; and the greenhouse gas inventory in St Vincent and the

Grenadines.

Specific achievements so far include:

Establishment of a sea level and climatemonitoring systems.

Improved access and availability of data. Increased appreciation of climate change

issues at the policy-making level.

Addressing country needs for expandedvulnerability assessment.

Establishment of coral reef monitoringprotocols.

Creation of a network for regionalharmonisation.

There are some other CPACC initiatives whichare external to the Project; these include workingwith:

UWI on a Master of Science programme inClimate Change.

UWI, UKCIP, and the Hadley Centredevelopment of regional "down-scaled"climate change models .

CEIS on the Clean Development Mechanism. CIDA on risk management for the private

sector. Petrotrin on private sector and media

workshops. Petrotrin on the establishment of a small

internal Climate Institute.

A mid-term review of CPACC conducted by theWorld Bank found that the Project had:

Made good progress towards achievement of expected technical and institutional outputs.

Contributed to increased awareness of

CARICOM countries and their participationin global fora on climate change. Provided critical inputs to improved

knowledge on mitigation and adaptation inthe region.

Played a major role in support of regionalconsultation process of UNFCCC through theinstitutional capacity building aspect of theproject.

CPACC is due to terminate in December 2001.However, Ministers have requested that a suitable

institutional mechanism be established to ensurethe region's continuing capacity to address climatechange issues. As a result, consultations havebeen held with institutions and it has beenproposed that RPIU should evolve into a regionalclimate change centre.

Approval was given to a proposal that wasconsidered by the Council of Ministers of Trade


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and Economic Development (COTED) and sent tothe CARICOM Heads of Government meeting inSt Vincent. It was also endorsed by the widerforum of Ministers of Environment of LatinAmerican and the Caribbean. Recently, a furtherendorsement was made by a joint meeting of CARICOM Ministers of Finance and Planningand Environment held in Belize.

Currently, legal instruments are being examinedfor the establishment a Climate Change Centre.The proposed governance would be as follows:

Overall political and policy direction byCARICOM Council of Ministers.

A Board of Directors responsible fortechnical oversight and financing of theCentre.

A technical secretariat to be theimplementing arm of the centre.

Financial support of the Centre is being designedthrough the implementation of: projects under theMultilateral Environmental Agreement especiallyUNFCCC; climate change programmes supportedby bilateral donors such as CIDA and DFID; andthe establishment of a trust fund.

The Centre will be the hub for climate changeissues in the region and its main functions will be:

To collect, analyse and disseminate climatechange observation data.

Facilitate Caribbean position to UNFCCC. Realise regional and national equitable

benefits under the Kyoto Protocol financialmechanism.

Assist in public awareness and educationcampaigns.

Develop special programmes. Promote information exchange with SIDS and

Latin America. Develop regional research programmes. Execute Implementing Adaptation to Climate

Variability and Change in the Caribbean -IMPACC

With the CPACC Project due to end in December2001, the process of preparing a PDF Block Bgrant proposal to the GEF for funds is beingfinalised. This will allow the Region once more to

consult nationally and regionally on the definitionof a follow up project - IMPACC. The ClimateChange Centre will be the executing agency forIMPACC which is expected to commence in thesecond quarter of 2002.

At the same time, discussions are being held withCIDA's Climate Change Development Fund on aproject proposal similar to that in the SouthPacific. It is anticipated that the Climate ChangeCentre will also be the executing agency for thatproject.

Policy Framework For Enhanced EfficiencyOf Energy Use In The OECS States

Mr. David Lea Martin Adelaar Lewis Engineering Inc MARBEK Resource Consultants Ltd.

Lewis Engineering Inc. was contracted by theOECS-NRMU in July 2000 to develop a study todetermine policy options and opportunities forimproved energy efficiency and energyconservation the OECS sub-region. A draft reportwas prepared and the major observations werethat energy (electricity, motive and stationaryengine and other fuel) in most OECS countries is

supplied almost exclusively by fossil fuel, 100percent of which must be imported. Energyconsumers are spending an increasingly largepercentage of their disposable income to pay forenergy, without any assurance from governmentsor utilities that programmes or policies will beimplemented to stabilised or reduce energy costs.


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The investigation confirmed that the OECSeconomies can generate significant economicsbenefit through investments in energy efficiencyand renewable energy. It is estimated that there isan economic potential for energy use reduction inthe range of 10% to 20%. In effect, theseopportunities represent the potential for the OECSto embark on a sustainable energy initiative thatwould result in significant environment and socialbenefits as well. As in the case of other countries,there is the opportunity to co-ordinate or integratethis initiative with efforts to foster cleanerproduction in industry and commerce. Tosummarise, the key observations emerging fromthe investigation are as follows:

1. There is currently no structured energymanagement plan or policy in OECS.

2. There is general agreement among stake-holders of the need and importance of energymanagement.

3. Energy costs in the OECS are, on average, 200- 300 percent higher than the North Americaaverage.

4. There is general lack of awareness of energymanagement among energy consumers,building designers, and facility managers.

5. The potential for renewable energy utilisingwind and solar systems is excellent.

In the view of the findings of the study, it isrecommended that the OECS establish a multi-year sustainable energy program commitment. Forthe purposes of discussion, this program will havethe following vision statement:

improvement of the efficiency with which energyis used in the OECS economies, as well asincreased utilisation of renewable forms of energy

program. The program is a key component of theOECS commitment to Cleaner Production. The

program provides the resources and structure to

effectively meet practical and realisableobjectives. This is a long commitment to ensureeffective capacity building and sustainability.

The OECS Sustainable Energy Program will beimplemented consistent with the followingprinciples:

Long - term Commitment : Resources should becommitted for a minimum 5 years. The experiencein other developing country jurisdictions indicatesquite clearly that a commitment of this degree isnecessary to build capacity among trade allies,institutional staff and establish other criticalprogram elements.

Practical Solutions : the program should beoriented to providing practical solutions inmeeting reasonable goals. A key advance of thisapproach is that a small number of large energyusers can be singled out for a near-term focus of activities with high potential for significant andshort -term results.

Addressing Key Barriers : The program will bedesigned to address the key barriers impedingaccelerated market penetration of energy

management actions. Measurement, Monitoring, Reporting : Theprogram should be supported by an ongoingmeasurement and monitoring system which iscritical to reporting on results relative to statedobjectives.

On the assumption that this will be initially a fiveyear program, it is recommend that the roll-outpresented below be considered for developmentand implementation of the program. The proposedwork breakdown structure for the program

involves three components. All three componentswill be implemented in parallel, but the first twocomponents will receive the most focus in theshort term:

Program Component # 1: Build and Maintain theProgram

The objective of this component is to establish thefoundation for program success throughdevelopment of the program approach, identify,administration and professional capacity. This

work component will focus on developing andmaintaining the program operation. To beeffective the program will have to achieve aprofessional capacity to deliver its services anddevelop an administrative regime to track andmanage its budget. The work activities wouldinclude:


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1. Complete program design : This would requireextensive consultations with key stakeholdersin the OECS as well as externally.

2. Establish funding and structure : There is astrong potential for the OECS to seek supportfrom various international development banksand bilateral agencies for some co-funding of the program. It will also be important tosecure some funding from each OECS state inorder to demonstrate commitment to theprogram prior to applying for funding.

3. Establish and maintain Program allies : thiswill involve establishing a regular forum andstructure for communication among key alliessuch as utilities, government agencies, andindustry associations (e.g. CaribbeanAssociation for Sustainable Tourism).

4. Develop internal capacity : this will involve

the design and implementation of a trainingcurriculum for program staff. To expedite thisaction and reduce the costs, existingcurriculum from other jurisdictions should beexamined for their potential adaptability foruse in the OECS.

5. Develop policy, legislative and regulatory proposal : this will create the basis forsustainability of the initiative.

6. Operate to initiate program : the program willassemble, negotiate and market projectsdesigned to generate certified greenhouse gas

emission reduction credits.

Program Component # 2: Education AwarenessAnd Capacity Building

The objective of Program Component # 2 wouldbe to: increase awareness among large and smallenergy users and energy management (EM) tradeallies of the economic and environmental benefitsof energy management opportunities; demonstratetechnology, method, and techniques necessary toimplement successful EM projects; build capacity

among the trade allies to deliver quality andreliable EM services and products; and reducerisk, in the short term, associated with energymanagement investments. This ProgramComponent would comprise a range of activitiesdesigned to educate the market on energymanagement opportunities and create awarenessas the basis for generating demand for EMproducts and services.

Some of the key program activities would be:Demonstrations (general and for large users):Education and Awareness activities for the publicTrade Ally Capacity Building

Program Component #3: Transformation Of TheInstitutional Environment

The objective of this Program Component is tohelp develop the institutional environment andcapacity necessary to catalyse and foster asustainable energy management market. ThisProgram Component relates to the capacity amongOECS institutions to introduce fundamentalpolicy, legislative and other changes necessary toaddress several crosscutting barriers to EM. Therecommended activities include:

1. Foster studies necessary to assess and offer solutions to key institutional barriers ; thiswould include the transportation sector, whichtraditionally has been the most difficult of thesectors in which to foster EM. This shouldalso include establishment of a research chairin energy efficient design that can assist withthe training of future leaders of energymanagement projects and programmes in theOECS.

2. Mandate testing of energy using products .The focus would be on those products that

represent the bulk of energy use andemissions (lighting, air-conditioning, motors,boilers, domestic appliances, etc.). Thistesting would become the prelude to aneventual energy performance labellinginitiative.

3. Revise building codes ; this would includeminimum standards for energy performance innew construction.

4. Impose a regular regime under which electricutilities would effect energy management ;Electric utilities would be required, and have

financial leeway, to develop and implementEM programs.5. Remove or reduce import duties on EM

products ; These products would includeenergy efficient products (such as highefficiency appliances, lamps etc.) andrenewable energy technologies such as DHWsolar unit, photovoltaic systems, and windturbines.


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The Changing Electric Utility Business

Basil Sutherland - Executive Director, CARILEC St Lucia

Past developments in more industrialisedcountries eventually trickle down to our part of the world, albeit inappropriately at times. Over thenext several years, therefore, it is expected thatutilities will come under increasing pressure fromgovernments, independent regulators andconsumers to become more efficient, and bypassing on these savings, eventually lower the realprices of electricity to consumers. Furthermore,global competition for locations to developindustrial enterprises and tourism projectsdemands that because electricity has become suchan important input into the production of theseservices, electricity tariffs should be as low aspossible.

There is already clamouring for competition in thetelecommunications sectors in several countries inthe Caribbean, and it is therefore only a matter of time before governments and regulators in thispart of the world start clinging to the notion thatthe electric utility business must also berestructured and opened up to competition. In factthis is beginning to happen in Jamaica, Trinidad

and the Dominican Republic, where several IPPsare already in operation.

However, caution must be exercised as some of these trends could well result in diseconomies of scale and scope in the operations of small utilitiesthat make up the majority of countries in theCaribbean region. If not handled with caution, theincreased transaction costs involved in managingcompetition in the various areas of the industrycould well result in higher prices to the consumer exactly the opposite result to that intended bythe policy makers.

Also, faced with the prospect of changingtechnology, for although in the Caribbean retailwheeling may not be around the corner,distributed and dispersed generation are becomingeconomically viable as aero-derivativecombustion turbines, micro turbines, fuel cells andstand alone wind turbines used in hybrid andphotovoltaic systems will allow many customers,

particularly large ones, to move away from thehard wired utility grid. If the reliability of thesenew technologies is proven over the next decadeor so, many long established large customerscould eventually move off-grid, relying on theutility transmission and distribution infrastructureonly for infrequent backup.

Although the type of competition which exists inthe United Kingdom and the United States doesnot ever seem like a practical proposition inCaribbean countries, the utilities will neverthelessneed to begin preparing for other types of competition, and begin to ask the question as towhat could happen if they are not fully preparedfor the transition to competition. They will alsoneed, for instance, to ask questions such as whatwill happen if their customers decide incollaboration with other customers with similarload profiles and interests to build their owngenerating facilities, using the grid merely forbackup?

In dealing effectively with these potentialchallenges, the utilities and governments will need

to tread very carefully, and as a group, the utilitieswill need to develop an effective lobby withpolicymakers and regulators to have a voice inand guide the development of regulatory policyto avoid costly mistakes which will be to thedisadvantage of customers in the long run.Regulation makes all regulators and utilitiesalike engage in a lot of non-value added work.The overriding question which should be asked iswhether a task adds value to the customer. If everything to meet a value-added standard, therewould be a lot less undertaken in our utility

companies and in regulatory agencies as well.Costs to the consumer would be reduced andresources would be channelled to what is mostimportant to the customer the servicespurchased. The California debacle provides a lotof insights as to what can go wrong if regulationor deregulation is inappropriately applied. If utilities fail, everyone loses consumers,investors and government. The very special


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position enjoyed by a utility company calls forspecial treatment in the development of aregulatory environment. It is suggested that, inter alia, the following considerations beaccommodated when articulating regulatorypolicy:

The utility should be regarded as apublic/private partnership rather than a purelyprivate enterprise even if it is privatelyowned.

To satisfy efficiency requirements, rewards tothe utility should as far as possible beincentive-based.

The regulators approach to economicregulation should not be as a defender of consumers interests but rather as an arbitrator

of the interests of consumers, investors andgovernment.

One of the greatest challenges that utilities willface in a new competitive environment is the lack of market certainty. At this time, the electricutility industry does not really know whatcustomers will expect or want in a competitiveenvironment. Much will depend, however, on theregulatory environment in which they will berequired to operate and the extent and types of

competition that are eventually demanded. Theextent to which individual utilities are able toidentify customer needs and meet them first, willdetermine their future viability, assuming marketforces are allowed to work.

Other important factors that are likely to affectelectric utilities relate to changes in other markets.The advent of long-distance competition in theUnited States telecommunications industry hasallowed a gas utility to enter the long-distancetelephone business by stringing fibre optic cablethrough its gas pipelines. This example clearly

illustrates that given a sufficient market, a firmthat has a customer base and cheap access toright-of-way can successfully enter thetelecommunications business. Also, bydiversifying into energy management, housingand environmental services, utilities can expect toadd value to customer relationships in numerousways.

Given that the future of telecommunicationsappears to be in wireless communications, it isquite likely that the state-of-the art electric utilitywhich already has a large customer base and largeinvestments in meter reading, billing and paymentcollection systems could very shortly be enteringthe telecommunications and data communicationsservices market (probably encouraged byregulators anxious to encourage tele-communications competition).

Over the next several years, because a utilityscustomers will become its most valuable asset,learning about their specific needs will be a strongcompetitive advantage for any utility company.

It is therefore likely that in the future, a utilitycompany will not be a utility as we have come toknow it, but rather, it will be something more a

general services or energy service company,offering air conditioning services, tele-communications services and cable televisionservices, energy auditing and energy managementservices etc. We may even see electric utilitycompanies forming strategic alliances withpetroleum product retail companies to delivercustomers power and energy needs directly onsite, without making use of the grid systems. Thiscould be done using on-site fuel cells powered bygaseous fuels supplied by the petroleum productretail company.

In an environment of deregulation andcompetition, what is important is the productdelivered, the quality of the product, thetimeliness of product delivery and the othercustomer needs met. And in all of this, utilitieswill need to realize that a competitiveenvironment demands more concentration onwhat customers want than does a monopolyenvironment. Customer service must therefore beamong the highest priorities for the successfulutility of the future.

The future of electric utilities will also beintimately bound up with the utilisation of e-commerce to reach out to customers to add valueto the services offered, both now and in the future.In several of our countries, however, efforts in thisdirection will be hampered if inadequatetelecommunications facilities are not upgraded. Itwill therefore be vitally important to increase thebandwidth of existing tele-communications


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services and perhaps there will be a role for theelectric utilities to play in this.

The customer has little concern for how theelectricity distribution network operates or whatload growth means to service reliability andinvestment requirements. It must be continuallyremembered that the customer demands access tolower price opportunities and, in a competitiveenvironment, will seek both from competitors if necessary. As the local energy supply company,utilities must provide these choices and emphasiseand deliver the type of customer service that willbeget customer satisfaction.

The effects of increased competition, reducedtechnology cycles, and changing expectations of workers and consumers have caused organisationsto face rapid and unprecedented change. This in

turn has created a change challenge , whichorganisations wishing to remain competitive mustface. This challenge occurs because theoperational and strategic norms that led tosuccesses in the past are not necessarilyappropriate any longer. But past success has ledto complacency and organizations may havebecome too dependent on past norms for futuresurvival to be assured.

In principle, this challenge can be met bychanging the mindset of employees at all levels inthe organisation. The established command andcontrol mindset must be replaced with newthinking embracing speed, simplicity andcustomer service, and must be supported by a self-confident, empowered work force.

Given that global environmental and nationaleconomic imperatives are dictating that moreefficient use be made of imported fuel, it willbecome necessary for the electric utilities, actingin their own long-term self interest, and also asresponsible corporate citizens, to le nd support tothe OECS Ministers of the Environment to

achieve the objectives of policy development forenergy conservation and management.

However, the Ministers for their part shouldensure, that the specific policies for energyconservation and management are developedwithin the context of the overall energy policiesand strategies for each of the countries. As far asthey relate to the operation of electric utilities,such overall energy policies should, inter alia, make sure that:

Appropriate regulatory oversight is urgentlyput in place.

Electricity rate setting mechanisms reflect thetrue cost of power.

The utility periodically prepares indicativeleast cost expansion plans for publicationwhich have reliability targets that are set ateconomically optimum levels.

The principles under which utility companiespurchase electricity from co-generators areclearly established; and,

Bidding for any power generation projectsprocured in the private sector are carried outin an structured and transparent way.

As a complement to the above policies, utilitiescan assist in achieving the objectives of energyconservation policies in several ways, the mostimportant of which are the implementation of measures to:

Reduce technical losses to economicallyoptimum levels

Improve the fuel efficiency of its primemovers

Set up demand side management programmes Give support to the development of renewable

energy production where such projects areeconomically feasible.

Improve public access to information on theutilities activities.


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Energy Use, Conservation and Efficiency in the Hotel Sector

Francene Clouden - Caribbean Alliance For Sustainable Tourism

Caribbean Alliance for Sustainable Tourism(CAST) is a fully owned subsidiary of theCaribbean Hotel Association. Its mission is toenhance the region's hotel and tourism operatorsby providing high quality education and trainingrelated to sustainable tourism.

CAST's main interest in energy relates to theexceedingly high cost of energy which make it thesecond highest operational cost for a hotel. Astudy undertaken in Jamaica approximately threeyears ago, indicated that the main user of electrical energy in a typical hotel is airconditioning, the second largest being lighting.The International Hotel Environment Initiative(IHEI) has a set of "benchmarks" which are basedon kilowatt hours per metre squared (kwh/m 2).From the Study, it was found that for hotels underseventy-five rooms i.e. approximately 60% of thehotel base in the Caribbean, the most efficienthotels used 12 kwh/m 2 per guest night. For thosehotels larger than 75 rooms, the most efficientones used 16 kwh/m 2 per guest night. Thereforethese are used as guidelines to assist hotels inmonitoring their energy consumption. However, itwas generally found that this is usually above 20kwh/m2, regardless of the size of the hotel or typeof facility.

The study found that the reason for this highconsumption was that generally in hotels there is alot of inefficient use of energy. This was duemainly to a lack of awareness on the part of bothmanagement and staff, as well as a lack of knowledge and skills in energy management,especially for the smaller hotels. It was also

found that there were no fiscal incentives topurchase energy efficient equipment ortechnologies.

It has been found that frontline staff must beadequately trained for management policies tohave a major impact on energy conservation.Implementing very simple and low costoperational changes has been found to asignificant effect on energy conservation.

CAST has developed air conditioningmaintenance training and general awarenesstraining, as well as various publication, the mainon being the environmental tool kit for Caribbeanhotels. A recent and popular publication entitled"Environmental Technology for CaribbeanHotels" was done in collaboration with ECLAC.Energy audits is another popular service area thatCAST has offered over the past two years. Fundshave been received from USAID to undertakeresearch papers on environmental aspects, one of which focuses on the energy consumption inhotels in the Dominican Republic. There is arecently developed "Rent an Engineer"programme for small hotels. Green certification isanother area which has resulted from energyaudits and this is considered a marketing tool bythe hotels. CAST is working with USAID toestablish a green fund particularly for small hotelswhich could be accessed through localcommercial banks.

Some issues that CAST advocates as it relates toefficient use of energy are:

Incentives for using energy efficienttechnology.

Attractive rates of interest to purchaseefficient technology.

Development of standards and building codes


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Energy Use, Conservation and Efficiency atWyndham Morgan Bay Resort, St Lucia

Carl Hunter - Director of Engineering

About two years ago, an audit and gap analysiswere undertaken. These analyses indicated thatthere were a number of opportunities to makeminor changes which would achieve energysavings.

In terms of drinking water, there were no flowrestrictions on the water supplied to all guests'rooms. Thus, aerated taps were installed whichgreatly reduced the amount of water used in theguests' rooms. Another opportunity which wasfound, was the installation of water dams in toiletssuch that the flushing pressure was maintained butthe amount of water used for flushing wassignificantly reduced. It was observed that theentire 240 guest rooms only accounted forapproximately 30% of the total volume of waterused in the Hotel, with the balance being used foroperations. Therefore, the staff were trained toconserve water. Also a "green team" wasdeveloped within the Hotel and ideas sought onhow best to reduce the amount of water used.With regards to waste water, a significant amountof work was done on effluents and currently, atrickle down filtration system and ultra violet tocure the effluent is being utilised. It is anticipatedthat by the end of 2001, a fully closed system isused so that all the water after use by guests andoperational will be purified with the waste waterand eventually used for irrigation.

With respect to boilers providing the hot waterneeds of the kitchen, the flat roof presented anideal opportunity to install some ITS solar system.This resulted in the ability to switch off one boiler

completely and hence generate significantsavings. With regard to electrical energy, many of the compressors of the refrigeration unit in thekitchen were over ten years old. Therefore, morehighly efficient ones were bought and changedfrom a two-speed pump system to one of greatercapacity, allowing it to be shut down for six hoursevery night. The low efficiency 15,000 BTU airconditioning units were replaced with 12,000

BTU units obtaining the same high coolingenvironment in every room.

In terms of hot water heating, the situation existedwhereby every two guest rooms used 2.5 kilowattwater heaters, resulting in extremely highelectricity usage. Therefore, throughout 2001, aconversion to solar thermal is being made and thiswill generate savings of up to 20% of the Hotelsentire electricity bill.

Solid waste production has been dramaticallyreduced from approximately four tonnes to onetonne daily. This was largely due to collaborativework between the Purchasing Managers andsuppliers. As a result, individually packaged foodwas replaced by bulk purchasing which wasdecanted into smaller serving containers to serveguests. In addition, the hotel went into partnershipwith a pig farmer; the waste generated from thekitchen was separated such that the farmer usedthe paper to heat the swill. Additionally, glasswaste is used by a concrete company.

Wydham Hotel also works with the localcommunity by opening up the hotel todemonstrate all those environmental initiativesthat are taking place. However, there is still muchmore to be achieve. The target from the audit wasto be achieve an overall 35% reduction in energycost; currently, only 25% has been obtained.

WINROCK International

Mary Grady

WINROCK is a non-profit organisation engagedin development work. There are five areas of work, namely, agriculture, natural resourcesmanagement, leadership and human development,clean energy and a volunteer programme. For theClean Energy group, there are offices in ten


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Documents

OECS, Energy Management and Energy Efficiency, February 2001