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The changing energy landscape of the Caribbean: Investment opportunities in an emerging Green Economy

Green Growth Investment Forum Brussels, Belgium October 6-7, 2011. The changing energy landscape of the Caribbean: Investment opportunities in an emerging Green Economy . by Tricia Williamson, Technical Information Officer, Caribbean Energy Information System,

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The changing energy landscape of the Caribbean: Investment opportunities in an emerging Green Economy

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  1. Green Growth Investment Forum Brussels, Belgium October 6-7, 2011 The changing energy landscape of the Caribbean: Investment opportunities in an emerging Green Economy by Tricia Williamson, Technical Information Officer, Caribbean Energy Information System, Scientific Research Council

  2. CONTENTS • Overview of the Caribbean’s energy resources • The “Before” Situation & Barriers to RE • Initiatives Implemented to Address Barriers- Market Share and Focus • Caribbean’s Expectation from Past Investments • Green Investment Initiatives in the Region • The Impact of Green Investments • Challenges Investors Still Face • Caribbean’s Expectation from Future Investments • Target Areas for Investment

  3. The Caribbean Has A Huge Resource of natural sources of energy All states- of note is Barbados, Grenada Solar thermal is utilized in all countries, particularly for the tourism sector Most states in particular: Grenada, Cuba, Guyana, Jamaica, Suriname Most states, including Dominica, St. Vincent & the Grenadines Guyana Cuba Jamaica Suriname Some states, including St. Kitts & Nevis, St. Lucia, Dominica, St. Vincent & Grenadines, Montserrat All states have the capacity- of note are St. Kitts & Nevis (first wind farm in OECS), Cuba, Jamaica.

  4. Barriers to Renewable Energy & Green Technology

  5. Key Initiatives implemented to Address Barriers There have been many initiatives in the region, a few key regional projects have included: • Caribbean Renewable Energy Development Programme (CREDP) • Caribbean Hotel Energy Efficiency Action Programme (CHENACT) • Preparation of a Geothermal-based Cross-Border Electrical Interconnection in the Caribbean • Caribbean Sustainable Energy Program (CSEP) • Bioenergy in the Caribbean: Supporting Policy Dialogue on Sustainable Energy Services for SIDS through South South Cooperation • Building Low-Carbon Communities in the Caribbean Project • Capacity Building of Caribbean Private Sector Environmental and Energy Management Capabilities' Project • Petrocaribe (not including Barbados and Trinidad & Tobago)- countries like Jamaica have used funds to support RE & EE projects

  6. Market Share of Initiatives in Caribbean States

  7. Areas of Focus for Initiatives in the region’s energy landscape

  8. What Was the Caribbean's Expectation from These investments? With billions of dollars of investment and hundreds of projects and initiatives- the Caribbean expected to reap significant benefits once the barriers to RE were removed, including: • Improved energy and economic security associated with the diversification of the energy mix • Reduction in the importation of petroleum products • Improvement in the balance of trade • Transfer of technology/ equipment • Building of local expertise in renewable energy technologies. • Policy development

  9. Petroleum Challenges Increase in the importation of petroleum products

  10. Petroleum Imports Still a challenge With respect to petroleum imports, an assessment revealed that although less than 30 million barrels of imports of petroleum were avoided, challenges still remain. Identified causes: • increases in population • increases in economic activity • rapidly increasing use of technology (computers, telephones etc.) • improvement in the standard of living of most countries • the global economic recession • increased importation of vehicles • rebuilding efforts from natural disasters.

  11. Green Investment Initiatives in the Caribbean • With respect to the financing of energy initiatives, some eighty-eight (88) agencies have served asfinancial sources and over US$2.5 billion in green investments made. For Example: USD 10 million line of credit to support SMEs and renewable energy in Dominica (2010) • Targeting the private sector-renewable energy and energy efficiency projects will benefit from a dedicated USD 1.3 million component and will further benefit from an interest rate subsidy to facilitate investment in these sectors. In June 2011 Energy and Climate Partnership of the Americas (ECPA) announced approved proposals from Antigua and Barbuda, Dominica, Grenada, Jamaica, and St. Vincent and the Grenadines that will involve projects that include using solar panels to heat water and wind turbines to power irrigations systems.

  12. The Impact Of Green Investment Initiatives Several areas were noted as having positive impacts from the various initiatives within the countries studied. These are as follows: • Increased capacity development • Social programmes • Savings • Job creation • Transfer of equipment/technology • Development of policy/plans/regulations • Improved quality of life • Increased access to information • Increased awareness • Development of new markets • Shift in behavioural change • Income generation.

  13. What challenges investors still face? • Access to funding issues including need for low interest rates; banks reserved in financing RE/EE projects due to lack of knowledge, experience & confidence. High debt burden of benefiting country (dept-to-GDP ratio) makes Government guarantees difficult • Longstanding monopolies of utilities- IPPs still feel hampered and Electricity Acts need revision. • Policy issues: Absence of regulatory oversight bodies and standards in some countries; Long period between moving policies from draft to enactment. Changes in government and policy direction. • Inadequate infrastructure in most countries; land ownership issues • Sustainability through training and skills development.

  14. What is the Caribbean looking for from potential investments? One main area that has been expressed: Proposed initiatives should be matched against the development goals of the country/region and utilize local capacity to ensure the initiative will create the necessary impact and ensure sustainability.

  15. Opportunities For Investment • A few areas to consider: • Expansion of investments into bio-fuels, hydropower, wind farms, geothermal and photovoltaic systems. • Solar energy equipment for the health canters and hotel sector; particular focus on rural areas • Energy efficiency in the public sector • Energy projects targeting the transportation sector. • Energy projects with environmental protection strategies to mitigate the effects of climate change.

  16. the Caribbean is open for business

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