Study on Renewable Energies and Green Policy in the OCTs

1. Final report presentation PWP3 - Brussels - September 25th, 2013 Resource and Logistics – Ph. Arnou, G. Léna, D. Papastefanakis Study on Renewable Energies and Green Policy in the OCTs

2. EU and OCTA willingness to: • Provide an analysis of the current situation of the energy sector in the OCTs • Assess the applicability and relevance to OCTs of the new developments in alternative energy production • Identify the best practices and knowledge existing in the field of RE within the OCTs • Identify those best practices which should be further considered for implementation in the various OCTs Why this study ? Approach The study was developed on the basis of desk research • Data collection through questionnaires sent to OCTs’ governments, utilities • Country profiles developed for each OCT and validated • Detailed Description Sheets of RE Technologies and Specific Applications • A general roadmap was developed, and adaptation per OCTs were included

3. Study fields Following to the terms of reference the study cover the following fields: General and specific context of sustainable energy developments: Chapters 1,2,3 Economic and financial analysis, audit on energy management and policies of the energy sector : Chapters 4,5,6,7,8 Annex 1 Country profiles (synthesis of information per OCT) Identification of existing studies and lessons learnt: Chapters 3,9 Annex 2 Detailed Description Sheets of Renewable Energy Technologies and Specific Applications Concrete recommendations on sustainable energy solutions Chapter 11 Roadmaps Today’s presentation is a brief overview of the extensive data included in the report. Do not hesitate to look at more specific data: Country Profiles, RE application sheets !

4. Economic and energy context in the OCTs Energy policies and supporting studies Regional initiatives and funding opportunities Potential future developments with innovative solutions Set of recommendations Content of this presentation

5. 1. Economic and energy context in the OCTs

6. OCTS Main Economics and energy data GDP / capita (k EUR) Installed capacity / capita (MW)

7. MAIN FEATURES OF OCTs ECONOMIES GDP / capita (k EUR)

8. Economies utilising own assets and environment • Most of the Caribbean OCTs (tourism, offshore banking) • French Polynesia (tourism, public sector)  Similar economy and climate patterns is a good basis for sharing experience in RE development • New Caledonia, Greenland (industries, public sector) (Gov. support to GL) Economies with very limited industry base, significant public sector / government support ( > 5,000 people) • St Pierre & Miquelon, Wallis & Futuna, Mayotte  Efforts for RE development vis à vis financial support from France Small population islands and more distant territories • St Eustatius (3500 p), Saba (1800 p) : tourism, public aid • Montserrat (4900 p, public aid), St Helena (4000 p, remote) • Falklands (2840 p), Pitcairn (67 p) : tourism, fishing  Distance may increase RE deployment costs, but low population helps for faster decision / implementation processes MAIN FEATURES OF OCTs ECONOMIES

9. Carbon-intensive energy system • Dependency on fossil fuels • Supply issues • Increasing oil prices, and uncertainty • Transport represents an important share of the primary energy demand • Electricity demand growth: 3% to 5% per year despite general slowdown of the economies  Increasing need to provide clean and efficient energy services  Key principles for “greening” the energy sector: • Improvements in energy efficiency • Increase the energy services from renewable sources • Benefits • Reduction of greenhouse gas emissions • Economic return • Energy dependence and reliability Main features of energy sector in the OCTs OCTs are becoming interesting places for testing specific solar, wind and marine technologies adapted to the islands context taking advantage of the available resources.

10. OCTs are extremely vulnerable to increased oil prices In 2011, global oil prices rose to over US$150/ barrel Production of electricity based on local available energy sources has become more attractive The average production cost per kWh at diesel power stations in OCTs may easily reach three to four times the typical production costs in Europe Electricity tariffs may reach 0.20 – 0.25 €/kWh and even more for some categories of customers Some OCTs benefit from subsidies provided by the Member State to absorb the difference between production cost and applied tariffs (Mayotte and St P&M) Oil and electricity prices

11. Worldwide renewable energy progress • Solar grows more rapidly than any other RE technology. • RE increase underpinned by falling technology costs, rising fossil-fuel prices and carbon pricing, and mainly by continued subsidies • RE = 19% of final energy consumption worldwide • 12% decrease in RE global investments in 2012 due to lower solar prices and weakened US and EU markets • Total RE power capacity worldwide exceeded 1,470 GWin 2012, including 115 GW of new RE installed in 2012 • Wind power accounted for about 39% of new RE power capacity added followed by hydropower and solar PV. Renewable energies worldwide

12. In OCTs: No legal obligation to adhere to EU goals for sustainable development Each OCT has established its own targets. Examples: Aruba: 100% RE for power by 2020 New Caledonia: 30% of RE in the energy mix in 2020 French Polynesia: 50% of RE in power generation in 2020 Falklands: RE share of 40% by 2015 St Helena: 72% of RE share in final energy by 2020 targets for Re penetration

13. In EU Member States: • The "20-20-20" targets for 2020 • A 20% reduction in EU greenhouse gas emissions from 1990 levels; • Raising the share of renewable resources to 20% • A 20% improvement in the EU's energy efficiency • Progress in the EU • In 2010, overall RE share 12.7% with significant differences between Member States: targets for Re penetration

14. Common characteristics of the OCTs Limited financial resources Limited spatial area Limited availability of technologies Vulnerability Specific constraints for sustainable energy strategies in the OCTs Remoteness (higher transport costs, tenuous supply line) High energy costs (imported equipment, spares, fuel & oil, external expertise) Variable loads (daily, seasonal, growth) Power quality and reliability constraints pertaining to RE development

15. Installed energy generation capacity : trend over last 5 years +57% in RE installed capacity (+121 MW) +27% in conventional installed electrical capacity (+283 MW) Progress in RE installed capacity Share of RE installed capacity (2012)      

16. Installed energy generation capacity : trend over last 5 years +57% in RE installed capacity (+121 MW) +27% in conventional installed electrical capacity (+283 MW) Progress in RE installed capacity Share of RE installed capacity versus peak load

17. Solar water heaters now widely spread in the territories • Significant increase in the installed RE capacities in several OCTs thanks to large projects tapping conventional renewable energy resources, e.g.: • +37 MW hydropower in Greenland • +30 MW wind in Aruba • +13.7 MW in Mayotte, mainly PV • +10.8 MW wind in Curacao • Implementation of less conventional RES has progressed: • 650 kW bio-methane unit with composting • 1.5 MW biomass-fired unit under consideration in French Polynesia, • 5 MW waste-to-energy plants under consideration in Aruba and Anguilla etc. RES penetration in the OCTs – Key highlights

18. PV and Solar Thermal In many OCTs solar technologies are developing, as their design, installation, declining cost and maintenance know-how requirements are minimal French Polynesia 14 MWp, Mayotte 12 MWp, Aruba 4 MWp, New Caledonia 3 MWp,  Wallis & Futuna 2 MWp Wind Significant wind potential identified in most OCTs. There are wind parks in 8 of the 16 OCTs. Impact on landscape needs to be considered Hydro Only mini and micro-hydro feasible. High seasonal variations are hampering feasibility of hydropower plants. Valuable potential is available in French Polynesia, New Caledonia and Greenland, where ~200 MW is in operation RES penetration in the OCTs – Key highlights

19. RES penetration in the OCTs – situation

20. Awareness level • Several studies commissioned, results are clear, implementation is in progress • Awareness campaigns (Aruba, Mayotte, Planned in: NC, SP&M, Anguilla) Main progress areas • Energy audits in several OCTs (buildings and industry), planned in Montserrat, St Pierre & Miquelon • Building sector: thermal regulation, compulsory installation of SWH, replacement of old boilers • Lighting: CFLs deployment, solar street lighting (in all OCTs) resulting in 50-60% reduction in electricity consumed for this end use • Power gen. & transmission: renewing generation capacities (Aruba 28% to >50% efficiency, Falkland islands), upgraded grid (St Helena), recommended regulation change in the TCI for fostering upgrading power generation ACHIEVEMENTS IN Energy efficiency

21. 2. Energy Policies and supporting studies

22. Almost all OCT’s energy policy and strategies are supported by high quality documentation and specific studies • Examples of energy specific studies: • Anguilla: National Energy Policy and Anguilla’s Renewable Energy Integration Project • French Polynesia: Renewable Energy Master Plan and Energy and Climate Strategy Plan • Aruba: detailed energy policy and studies with support of the several institutions and programmes such as the Carbon War Room • Examples of non energy-specific studies: • Turks & Caicos Development Strategy report • Saint-Pierre-et-Miquelon: Strategic Development Plan Energy Policies and supporting studies

23. Good experience and skill level • OCTs authorities and utilities have good skills in energy issues, practices, RE and EE technologies • Regular reporting • Technical support provided by dedicated agencies: • Ademe in French Polynesia, New Caledonia, ARER in Mayotte • Aruba Sustainable Research Institute (ASRI) • Aruba TNO office for Bonaire • And Universities such as: • Dutch Universities (Delft and Waneingen) in Aruba • University of Paris 3 in New Caledonia Experience level within local energy sector • Key identified needs in capacity building • Project finance, financing and energy economics, institutional and regulatory framework, energy management •  How to help project developers with provision of advisory support •  Need to develop networking

24. OCTs are responsible for defining their energy future and setting up the institutional and regulatory framework required to meet their objectives There is a variety of situation in the OCTs. Examples: • Most often, energy regulation and energy sector development is made by a Ministry in cooperation with the power utility • A regulator only in St Helena Caymand Islands, in preparation in TCI and under consideration in French Polynesia • Energy efficiency and renewable energy issues are usually under the responsibility of the same entity in the OCTs, usually at a Ministry • Some have established a dedicated agency or office (Anguilla for instance). The French Ademe is present in many French OCTs Institutional analysis

25. For years, electric utilities were vertically integrated monopolies. • This perception has changed in many countries, but in OCTs this monopoly situation has long been considered as the best option due to their characteristics (resources, area, market, integrated approach, etc.). • Because the development of RE calls for new players, this situation is changing in some OCTs. • However, the integration of these new players in the OCTs’ energy market does not require necessarily the same adaptations as in EU MS. • Organization of market opening and partial competition, arrival of independent operators, injection of RE power into the grid call for regulations adapted to each OCT. • Participation of OCTs utilities is regional networks and associations is part of this momentum: CARILEC in the Caribbean and PPA in the Pacific. • Public utilities and private sector start also to cooperate for power sector development through PPP ventures. Main players in the energy sector

26. 3. Regional initiatives and funding opportunities

27. Examples of ongoing initiatives • The Pacific Environment Information Network (PEIN) New Caledonia, French Polynesia and Wallis et Futuna are members • Pacific Islands Greenhouse Gas Abatement through Renewable Energy Project (PIGGAREP) • Island Nations 100% Renewable Energy, including transportation, by 2013 • The Caribbean Renewable Energy Development Programme (CREDP) • The Caribbean Renewable Energy Forum (CREF) • Caribbean Wind Energy Initiative – CAWEI • European initiatives: CPRM (The Conference of Peripheral Maritime Regions ) and ISLENET (A network of European Island Authorities) OCTs are not eligible to participate in most of these programmes. OCTA should undertake contacts to promote eligibility of OCTs in above mentioned initiatives. Regional initiatives and cooperation

28. International initiatives likely to be available to the OCTs: • IRENA’s first two clusters created for islands: • Road Maps Interest Cluster, Power Grids Interest Cluster • The Caribbean Energy Information System (CEIS) • Intelligent Energy Europe programme • a call for proposal is still opened for capacity building • 7th Framework Research Programme including: • Eucarinet • The WINDS-Caribe project • Climate Investment Fund and Global Environment Facility (GEF) • EU Energy Initiative Partnership Dialogue Facility Regional initiatives and cooperation

29. The Renewable Energy and Energy Efficiency Project (REEEP). • New call for proposals scheduled early 2014 under its 10th Project Cycle. OCTs should register with REEEP to receive call notifications and guidelines. • The European Investment Bank: • Direct intervention as already • The recently created Global Climate Change FL which clearly indicates that OCTs can apply for funding. • Other regional and multilateral banks: • e.g. the Caribbean Development Bank, • EU Member States mechanisms and supports available such as • AFD or Specific programmes (FIDEME or the Fonds Chaleur of ADEME) in many French OCTs, • DFID in Pitcairn or Montserrat. • the Netherlands Development Finance Company FMO and its Infrastructure Development Fund and energy fund programme • The Global Energy Efficiency and Renewable Energy Fund (GEEREF) • Anguilla, Montserrat, St Helena and Wallis et Futuna are eligible FUNDING opportunities FOR THE OCT

30. The European Development Fund (EDF) will continue to be one of the main source of funds with all support provided in ACP countries. A few OCTs may already have the appropriate environment (public finance framework in place, sound energy policy and strategy) to apply for energy sector policy support programme. Conditions to be met include: a sector policy, a mid-term finance framework, donor coordination and a monitoring system in place FUNDING opportunities FOR THE OCT • TEP Verteswas implemented in very isolated islands of NC, FP and W&F for a small number of customers. • Total 10.3 M€ with 5.2 M€ from the 9th Regional EDF. • 11 small scale systems including hydrid PV + generators for local use and injection to the grid • Main benefits: Provision of energy service to isolated population and strengthening of management capacity

31. Any island can join the Global Sustainable Energy Islands Initiative (GSEII) initiative • which intends to contribute to the total transformation by 2020 of some islands. Under this so-called Vision 20/30, a coalition of partners is built and islands ready to join the programme are identified. • Mechanisms through which reduction of carbon emissions is tradable such as the EU emissions trading system (EU ETS) FUNDING opportunities FOR THE OCT • There are cases in which RE electricity (Wind, PV, Small Hydro) in some of OCTs is less expensive than conventional electricity. • Realistic analysis demonstrates that the RE applicability in OCTs would be accelerated. • OCTs are an extensive domain of attracting investments on RE and Energy Efficiency for commercial and/or pilot and innovative projects.

32. 4. POTENTIAL FUTURE DEVELOPMENTS WITH INNOVATIVE SOLUTIONS

33. CHALLENGES, similarities & constraints for res conventional and innovative technologies penetration Vast geographical distribution Different sizes of population, economies and morphological landscape Different climatic conditions, RES resources Different Technical and Infrastructure constraints (grids, power plants, accessibility, etc.) • High energy cost and heavy dependency and high daily and seasonal electricity peaks • Variety of OCTs policies on RES development and variety on electricity tariffs • Variety of both mature and emerging RES technologies

34. Potential future development with innovative technologies Current Situation Medium Term Medium to Longer Term Long Term 216 MW • Hydro 100 MW • Wind 40 MW • PV • Biomass / Biofuels / Biomass trigeneration / Waste to energy Solar Air-conditioning / CSP • Geothermal / Ground Source Heat Pumps Micro-hydro Energy Storage RE Desalination RE Smart/Micro-grids Wave and Tidal power Mature technologies Sea Water Air Cond / Ocean Thermal Energy Conversion Innovative and emerging technologies

35. In the medium term: Hybrid power generation solutions: PV/diesel, wind/diesel, wind/hydro • Combined in a microgrid these can meet the demand of remote areas without extending main grid Geothermal and Ground Source Heat Pumps • Feasibility studies to identify the existence of geothermal resource, its temperature, depth, etc. ( high enthalpy applicable to certain OCTs - Caribbean, Greenland, low enthalpy suitable in all OCTs) • Possible applications: heating and cogeneration for industrial, residential and commercial end uses. Biomass • OCTs with agricultural activities such as Greenland, French Polynesia, Falklands could favour the development of: Gasification, anaerobic digestion, biofuels • Trigeneration: space heating & cooling, DHW and combined power (suitable to OCTs with rich biomass feedstock) Potential future re sources – medium term

36. In the medium-long term: • Micro-hydro • Suitable in places with the necessary head and flow potential throughout the year • Greenland, St. Pierre & Miquelon and the Falklands may exploit micro hydro to satisfy dispersed loads in their territories. • Energy storage options • Application: They can significantly improve operation of existing RES facilities operating on low capacity factors • RE Desalination • Adresses a specific need of the OCTs: freshwater • RE Microgrids, RE Storage and RE Smartgrids. • Applications: distributed energy. Mitigation of RE intermittency constraints Potential future re sources – medium / LONG term

37. Energy storage Electrical Energy Storage (ESS) is very beneficial: • Provides Peak Shaving • Provides Load Leveling • Allows higher RE penetration Batteries Pumped hydro Compressed air Hydrogen system

38. Potential future re sources – long term • In the long term: Innovative RE technologies • Innovative RES may be the answer to particular challenges in the OCTs (high summer cooling demand, electrification on remote and off-grid areas, waste management and disposal) • Innovative RES technologies can be developed in OCTs on a pilot-based approach if a significant market application is expected and funding available • Detailed feasibility studies are required (siting, demand profile studies, maintenance conditions, environmental impact, social acceptance criteria) prior to development and implementation.

39. Potential future re sources – long term • Sea Water Air Conditioning (SWAC) uses temperature difference between deep seawater and ambient air • Application: Cooling or AC. Typically in hotels • Suitable in tropical areas • Costs are still very high • Ocean Thermal Energy Conversion (OTEC) • Applicable to OCTs where high temp. difference between surface ocean water and 1000m depth water • Suitable in tropical areas (French Polynesia) • Significant installation costs and environmental impact • Wave power • Potentially applicable in St. Pierre & Miquelon and the Falklands • Impact on the marine environment should be considered • Tidal energy uses the difference between high and low tide sea level • Technology is still in R&D stage since the 1980’s • Requires on-site measurements; feasibility studies • Impacts on environment and tourism should be considered

40. 5. Set of Recommendations

41. Key principles: Pragmatism and efficiency Need to take advantage of the relationships and proximity between actors of the energy sector Strong and continuous political will is required Governments should actively support renewable technologies through a set of actions: adequate framework, incentives,… Regulation framework is required but an independent agency is necessary only where enough operators and players involved and a large market base Governments may intervene through regulation (energy and finance ) and through direct intervention Institutional and legal framework

42. Institutional and legal framework

43. Principles relevant for all OCTs (CARELEC’s principles): Planning of the power sector under the responsibility of the electric utility Where competition is in place, apply the single buyer principle Possibility for small scale RE to use and to connect to the grid under specific technical and purchase conditions Simplify technical standards and administrative procedures Promote self-generation for own use and export of surplus through net metering Clear guidelines and procedures Institutional and legal framework

44. Data collection Energy audits of public buildings and social housing stock Encourage the implementation of electricity smart meters, to assist the utility supplier in improving its demand side management policy and strategy Raising awareness: Development of technical partnerships between organisations, construction federations, chambers, businesses, for benchmarking and training Organise awareness activities for the public, for the younger generation, for professionals Organise awareness workshops for businesses, on how to reduce their operational energy Creation of Energy Information Desks Set an example through the adaptation and renovation of public buildings and social housing stock Energy efficiency policy options

45. New standards and labelling: Minimum standards for new buildings, Energy Performance Certification, promote Bioclimatic design principles (insulation, lighting, ventilation) Minimum % provision of on-site RE for all new building developments and for major refurbishments (for instance SWH) Regulation favouring CFLs deployment and reducing the sales of incandescent lamps, Minimum energy efficiency performance for imported appliances Incentives Tax incentives for the adaptation / renovation works of housing and private buildings Reduced custom duties for the import of low-energy household appliances Support Support to the power generation and transmission for improved efficiency Simplify administrative procedures, and allow an easy access (single window) Energy efficiency policy options

46. Three priority areas: • 1. Training • Financing and Economics for developers and local banks • Institutional and regulatory framework • Energy management • 2. Business development advisory support • To increase the probability of replication, scaling-up and investment mobilization • Provided to project developers • By an experienced business advisory service Strengthening capacity building and networking

47. 3. Networking and Communication facility • Create an OCT’s Energy Network • Create a specific window in the OCTA website with access to relevant information dealing with green energy • Prepare a guideline for developers, implementers and entrepreneurs on access to financing and the conditions of access specifically for the OCTs • Organization of investors´ forums • Drafting and editing brochures, guidelines and operation manuals • Specific communication actions for remarkable studies and pilot projects within the OCTs and beyond through involvement of financiers • Organization of networking events to share experiences Strengthening capacity building and networking • The TA team at OCTA could be the facilitator and organizer of all the activities related to capacity building and networking. • After an assessment of results and performance of networking activities OCTA and the EC should discuss on the continuation of the activities

48. First priority should be Energy Efficiency • RE roadmap should be designed according to • energy supply security needs • deployment costs • required regulation changes • ability to attract private investors Roadmap principles Development of more costly RE technologies and smart grids

49. Comparisonof RE costswithcurrent kWh tariffs

50. Detailed roadmap TOWARDS SUSTAINABILITY