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Launch of the first Caribbean Regional Energy Efficiency Pilot Financing Facility

 

“Belize to launch the Caribbean’s first Energy Efficiency Financing Facility under the Energy for Sustainable Development in Caribbean Buildings (ESD) Project”

PRESS RELEASE – Belmopan, Belize; October 17, 2017 – The Caribbean Community Climate Change Centre (CCCCC/5Cs) and the Development Finance Corporation (DFC) are scheduled to sign a Memorandum of Agreement launching the first Caribbean Regional Energy Efficiency Pilot Financing Facility for investments in Energy Efficiency (EE) and Renewable Energy (RE). The event is scheduled for Tuesday, October 17, 2017, at 10:00 a.m., at the CCCCC Training Room, Lawrence Nicholas Building, Ring Road, Belmopan, Belize.

The new EE Financing Facility was made possible with a grant of USD 200,000 under the Global Environment Facility-United Nations Environment Programme (GEF-UNEP) Energy for Sustainable Development in Caribbean Buildings (ESD) Project, with co-financing of USD 800,000 from the DFC. The pilot financing facility is intended to provide the foundation for the development of a self-sustaining financing window within the DFC to facilitate increased investments in EE and RE.  The work was jointly spearheaded by the DFC, the CCCCC/5Cs and the Caribbean Development Bank (CDB), with assistance from the GEF and UNEP, in developing innovative sustainable energy solutions that benefit the country and people of Belize.

It is recognized that globally, buildings account for over a third of total energy use and associated greenhouse gas (GHG) emissions; typically, 10 to 20 percent (depending on building type) of the total life‑cycle energy consumed is used for the manufacturing and assembly of building materials, construction, maintenance, refurbishment and demolition. Some 80 to 90 percent is used over the life of the building for heating, cooling, lighting and ventilation, house appliances, etc. In Belize, for example, the buildings sector (commercial, domestic, and institutional) is the largest consumer of electricity and accounts for more than 90 percent of total electricity consumption. It is therefore, the largest source of GHG emission after the transportation sector.  The Project aims to achieve a minimum reduction of 20 percent in electricity use in the pilot activities that are to take place during 2014 – 2018.

END

 MEDIA ADVISORY 

WHO:

  • Hon. Frank Mena, Minister of State, Ministry of Labour, Local Government, Rural Development, Public Service, Energy & Public Utilities
  • Dr. Kenrick Leslie, CBE, Executive Director, Caribbean Community Climate Change Centre
  • Ms. Natalie Goff, General Manager, Development Finance Corporation

WHAT:          OFFICIAL SIGNING CEREMONY: GEF-UNEP ESD PROJECT “BELIZE ENERGY EFFICIENCY PILOT FINANCING FACILITY”

 WHEN:          Tuesday, October 17, 2017, 10:00 a.m.

 WHERE:   Caribbean Community Climate Change Centre, Lawrence Nicholas Building, Ring Road, Belmopan, Belize

BACKGROUND:

The Energy for Sustainable Development in Caribbean Buildings (ESD) Project represents the first regional project that is piloting energy efficiency improvements in the economy of member states in the Caribbean Community (CARICOM). Buildings are identified to be the major consumers of electricity across the region, as a result, the Project focuses on the building sector for improving the efficiency of energy use.

Peruse the official Background Note – Blended Grant Loan Finance Mechanism – ESD Project (2013)

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The Caribbean Community Climate Change Centre coordinates the region’s response to climate change. Officially opened in August 2005, the Centre is the key node for information on climate change issues and the region’s response to managing and adapting to climate change. We maintain the Caribbean’s most extensive repository of information and data on climate change specific to the region, which in part enables us to provide climate change-related policy advice and guidelines to CARICOM member states through the CARICOM Secretariat. In this role, the Centre is recognised by the United Nations Framework Convention on Climate Change, the United Nations Environment Programme, and other international agencies as the focal point for climate change issues in the Caribbean. The Centre is also a United Nations Institute for Training and Research recognised Centre of Excellence, one of an elite few. Learn more about how we’re working to make the Caribbean more climate resilient by perusing The Implementation Plan.

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Dr Ulric Trotz: Let’s Re-imagine GCF Resources (article and interview)

Dr Ulric Trotz, Deputy Director and science Advisor at the Caribbean Community Climate Change Centre (CCCCC), says  calls for a transformation of Green Climate Fund resources that could optimize and efficiently direct private investment and limited public resources. Peruse his proposal  below and listen to his exclusive interview on the inaugural edition of Caribbean Climate Podcast.

The inherent differences in the nature of Mitigation and Adaptation outcomes is consequential and should be a central feature of comprehensive climate change policy decisions, policies and programmes. While they both result in the production of a public good, that derived from mitigation (decreased carbon) is a global public good, and conversely, that derived from Adaptation is a local public good. Indeed, Adaptation is very country specific, hence the localized nature of the benefits derived therefrom. As a result, the product from Mitigation can be commoditised and traded on the local and/or global markets. This paves the way for international private sector entities, to identify profitable pro-environmental opportunities and invest in global action that facilitates Low Carbon Development (Mitigation). Mitigation’s ability to generate private sector opportunities distinguishes it from Adaptation. Even at the local level, Adaptation fails to attract private sector investment, because the local public good it produces is not a marketable commodity. By implication, Adaptation invariably warrants public sector intervention. Specifically, more robust public spending on infrastructure, healthier ecosystems, better health systems, etc. These crucial differences underscore the existence of a significantly more favourably global private sector investment environment for mitigation relative to Adaptation, the bulk of which will remain the responsibility of the public sector.

So significant and consequential is the divergent investment potential (public and private) of Adaptation and Mitigation, the UN Secretary General’s High Level Panel on Climate finance called for a significant proportion of the US$100 billion per year to be mobilized for the Green Climate Fund to come from the private sector. This private sector engagement must operate both locally and globally given the considerable risks and high costs associated with Adaptation that could prove prohibitive for the private sector in the developing world. Some observers view this approach skeptically, often wondering, why would the private sector, say in the United Kingdom, be interested in providing funds for Adaptation in Belize? These are highly plausible concerns, but the case for Mitigation is totally different. Unlike Adaptation, both local and foreign private sector capital can be mobilized for investment in mitigative actions in any part of the world. Building low carbon economies is the business of the future and lends itself to global investment. With this in view, I propose a re-imagination of GCF resource allocation.

Considering the unlikely flow of the necessary resources from the private sector for Adaptation purposes and a clear pro-environmental incentive for global and local private sector engagement through mitigation, most of the GCF allocation should be used to support adaptation actions. GCF resources should not be used to “implement” actual mitigation actions, namely renewables, efficiency measures, among others. I strongly suggest that GCF resources be used to help countries prepare an environment for robust mitigation efforts, such as energy transformation – policy and legislative reform – and also to prepare sound investment portfolios with full-fledged, costed and ready to implement proposals for the transformation of the energy sector. I imagine GCF resources being used to incentivize investment in these actions. The approach I have articulated will create an enabling landscape marked by a favourable investment climate, an incentivizing environment, and a preponderance of credible and ready to go transformational programmes. One can anticipate such a landscape to yield heightened private sector interest and investment in Mitigation without GCF’s resources crowding out private funding, while leaving crucial adaptation efforts – which does not readily attract private funding – largely underfunded. Put simply, the GCF should be reengineered to support Adaptation directly, create the environment for private sector investment in Mitigation, and leave actual implementation of the latter  to the private sector.

Dealing with Adaptation funding more broadly is a bit less straightforward, but, the “integration” of climate risks into national development planning and budgetary processes, as well as crafting a budgetary support modality as a mechanism for adaptation funding could result in some feasible solutions. How do we approach this integration when considering a reasonable modality for adaptation financing?  I propose that countries should “integrate” climate risk into national development plans and national budgets to access adaptation funding. This integration should include quantification of both the impact and additional costs of mitigating those impacts (Adaptation costs).

We in the Caribbean already have a tool to facilitate this integration – the Caribbean Climate Online Risk and Adaptation TooL (CCORAL) – that is adaptable to other contexts. Using this approach, the normal envisaged expenditure in the budget (e.g. upgrading a coastal road) becomes the country baseline contribution to the “adaptation package” (i.e. what the country would have spent in any case on that action). The incremental costs identified by the risk management analysis (Adaptation costs) can then be accessed from the GCF. The capacity building issue here then becomes mainly one of how countries gain the capacity to “integrate climate risk” into their national development plans and yearly budgetary processes. This allows countries to clearly define their national adaptation resource needs across all sectors. Once this is done, it is a question of the modalities for accessing these funds from the GCF, implementing, monitoring and reporting under the national umbrella. The essential point here is that this approach provides an avenue for channeling adaptation funds to countries, through a “budgetary support” process (by implication through the Ministry of Finance), and precludes the need for setting up a parallel external process for accessing and utilizing Adaptation funds in our countries that are already confronting challenges associated with scarce human resources.

Is the Caribbean a paradise for renewable energy?

The Caribbean nations have all the incentives and resources to convert to 100% renewable energy. But is it happening?

Beach in Barbados

With plentiful natural resources and expensive fossil fuels, Caribbean countries have a strong incentive to be at the forefront of renewable energy development. Photograph: David Noton Photography/Alamy

What motivated Derek to get into solar power? Was it a desire to be green or combat climate change? “Climate change? I don’t even know what that is,” he says. “I just didn’t want to depend on the power company.” Electricity is expensive in Barbados. Derek bought a solar kit including one panel for $100 (£64).

Derek is a mechanic by trade and is using his system to charge car batteries. He has found a way to integrate his solar system into his business. This is entrepreneurship in its truest sense. A viable business venture for Derek and a chance for wider environmental benefits for the country are the win-wins, but neither of these was the prime driver for Derek. He was essentially a tinkerer with an idea and wanted to try it out in the hope of paying less for power.

Derek's shop

Derek’s shop Photograph: David Ince

If Derek can make it to such a level of self-sufficiency starting from small beginnings, does this mean that individuals and businesses with greater means have gone even further? Well, more Dereks are gradually popping up throughout the Caribbean, but generally the answer is no.

The Caribbean appears to be the ideal location for renewable energy development. Petroleum resources are scarce and renewable resources such as solar, wind and geothermal are plentiful. Energy prices are high as there is no opportunity for economy of scale benefits that large land masses enjoy. Added to that, climate change impacts pose a major threat to the region’s small-island economies that are largely dependent on tourism and agriculture.

Despite this, most Caribbean nations still use imported diesel or oil to generate 90-100% of their energy. So what has been the barrier to using renewables? Many people have pointed to the cost factor. Small economies mean that in most cases countries have difficulty in financing renewable energy projects that require high upfront capital. Also, regulations have been slow in setting clear rules for grid interconnection. These factors have led some international investors and developers to be cautious about entering the Caribbean market.

We can learn from Derek’s example and build on local talent. Indigenous grassroots knowledge paired with the experience and access to capital of larger local and international companies would be a winning combination.

The advantage of building on local interest and indigenous talent can be seen in Jamaica. The late Raymond Wright was trained as a petroleum geologist and was head of the Petroleum Corporation of Jamaica (PCJ) in the 1970s. His interest in wind energy was piqued while searching for areas with suitable geological characteristics for petroleum development. It soon became evident that Jamaica had a significant wind resource. Over time Wright shifted the focus of his energy development to renewables and PCJ took on a leading role in the establishment of the Wigton Wind Farm, which now generates about 0.1 % of Jamaica’s energy.

Jamaica is keen to build on Wright’s legacy. Expansion of the wind farm is under way and Jamaica plans to increase renewable energy use further, with a goal to reach 20% by 2030, as part of its Vision 2030 policy. There are plans for 20 MW of PV solar to be installed to compliment the wind farm. In addition, Jamaica is offering benefits for any company or individual selling electricity to the grid from a renewable source.

Back in Derek’s home island of Barbados, there is a story of another pioneer, the late Professor Oliver Headley. An organic chemist by training, he became a leading international voice for solar energy development. He got into developing renewable energy in the 1960s after a PhD student colleague challenged him to put the sun that was beating down on them daily to productive use. His pioneering efforts helped propel Barbados to a leader in solar water heater use in the western hemisphere.

There are three solar water heater companies in Barbados and more than half of households have heaters installed, which can be written off against income tax. This policy has been in place since 1974. The story goes that the then prime minister installed a solar water heater on his house and was so impressed with the results that he put the economic incentives in place.

Barbados is keen to expand the success of solar water heaters to solar photovoltaic with the introduction of the “renewable energy rider”. This allows people installing solar photovoltaics to sell their power back to the grid at 1.6 times the usual charge. As a result of this incentive, there are now more than 300 house-top PV systems in the island, and that is expanding. There is every possibility now that we will see more Dereks by 2020 and beyond, Barbados has set itself an ambitious goal of 29% of energy to be produced from renewable sources by 2029.

Wind farm in Curacao

Wind farm in Curacao Photograph: David Ince

A few other Caribbean countries have seen success with renewable energy. The Dutch Caribbean has led the way in terms of wind energy, with Curacao, Bonaire and Aruba all having significant generation capacity. The political connection to the Netherlands has helped with technical expertise and there has been economic support from the Dutch government. Jamaica has been able to build on the know-how of Dutch Caribbean countries in their own wind development.

Nevis, St Lucia and Dominica have all sought to develop geothermal energy projects, which is another source of renewable energy that has potential in the Caribbean. The Organisation of American States and the World Bank have provided capacity and financing support.

It is encouraging to see developments such as these. The groundwork has been laid through efforts of pioneers such as Wright and Headley and there are more grassroots leaders like Derek emerging.

But the efforts of individual champions cannot be successful without policies, legislation and economic incentives, which governments are slowly but surely putting in place. Having these policies on the books without recognising and supporting local businesses or providing an environment through which champions can come to the fore is likely to impede the progress of this spectacularly beautiful but vulnerable region in developing a flourishing green economy.

Some names have been changed.

Join the conversation with the hashtag#EnergyAccess.

Credit: The Guardian

Caribbean energy experts recommend creation of new Caribbean Centre for Renewable Energy and Energy Efficiency (CCREEE)

SIDS Press release logos

The technical design and institutional set-up of the Caribbean Centre for Renewable Energy and Energy Efficiency (CCREEE) was successfully validated by energy experts and specialists of CARICOM Member States in a regional workshop, held from 21 to 22 July 2014 in Roseau, Dominica. The event was co-organized by the Small Island Developing States (SIDS) Sustainable Energy Initiative – SIDS DOCK, the United Nations Industrial Development Organization (UNIDO) and the Government of the Commonwealth of Dominica, with financial support of the Austrian Development Cooperation (ADC).

The workshop follows-up on the official request of SIDS DOCK to UNIDO in August 2013, to assist the small island developing states in the Caribbean, Pacific, Indian Ocean and Africa, in the creation of a SIDS network of regional sustainable energy centres. With technical assistance from UNIDO, a consultative preparatory process for the Caribbean centre was launched in close coordination with the Energy Unit of the CARICOM Secretariat. The process included the development of a needs assessment and project document on the technical and institutional design of the centre. With the inputs received at the regional workshop, the needs assessment and the project document on the technical and institutional design of the centre will be finalized.

It was recommended to create CCREEE under the umbrella of the existing institutional framework of CARICOM. It was agreed to submit the final CCREEE project document for consideration by the next Ministerial Council for Trade and Economic Development (COTED) of CARICOM. It was suggested to launch a competitive selection process for the host country of the Secretariat of CCREEE.

Prime Minister of Dominica, Hon. Roosevelt Skerrit, endorsed the establishment of the CCREEE, and announced Dominica’s interest in hosting the centre. “Dominica has the highest percentage of renewable energy (RE) in its energy mix among the Caribbean countries, therefore, Dominica would be the ideal location,” he said.  By 2017, Dominica will become the only Small Island Developing State to export electricity. A partnership between the Government of Dominica and a French Consortium will develop a geothermal power plant for export and subsea transmission lines to French neighbours – Guadeloupe to the north, and Martinique to the south.

Ambassador Vince Henderson, Permanent Representative of the Commonwealth of Dominica to the United Nations, and Chair of the SIDS DOCK Steering Committee, who spearheaded the initiative for the establishment of regional RE and EE centres, expressed gratitude on behalf of the small island developing states to the government of  for providing the funding for the establishment of the regional centres in the Pacific and the Caribbean and the support to African SIDS through the ECREEE. “The establishment of regional centres for RE and EE is one of the most progressive steps that UNIDO, SIDS DOCK and our governments can take towards the transitioning from fossil fuels to RE, and CCREEE will work with regional institutions, like the OECS, CARICOM, CREDP and CDB, to pool human and financial resources to transform the regional energy sector,” he noted.

Dr. Pradeep Monga, Director of the Energy and Climate Change Branch of UNIDO, said the importance of the regional energy centre is to boost inclusive and sustainable industrial development in Caribbean islands. “The centre will play an important role in empowering the local private sector and industry to take advantage of growing job and business opportunities in the sustainable energy sector,” Mr. Monga stressed.

The over 60 Caribbean experts and specialists, development and private sector partners in attendance recommended that the centre focuses particularly on policy implementation, capacity development, knowledge management, awareness raising and the creation of business opportunities for the local sustainable energy industry. The centre will act as a think-tank and hub for sustainable energy and will play a key role in creating economies of scale and a competitive sustainable energy market and business sector. It will address existing barriers and strengthen drivers through regional methodologies and tools. It will act as the central service provider for the development and implementation of SIDS DOCK and Sustainable Energy For All (SE4ALL) activities.

The centre will become part of UNIDO´s Global Network of Regional Sustainable Energy Centres. The SIDS centres will be announced as an innovative south-south partnership at the Third International Conference on Small Island Developing States, scheduled to take place from 1 to 4 September 2014 in Apia, Samoa.

Further information on the workshop is available at: http://www.ccreee.org

For more information:

Mr Al Binger, Energy Advisor, CARICOM Climate Change Centre, abinger@sidsdock.org

Mr Martin Lugmayr, Sustainable Energy Expert, UNIDO, m.lugmayr@unido.org

The Decade of Sustainable Energy and the Post 2015 Development Agenda

Children using solar lamp to study in a remote village Credit: CARICOM Newsletter

Children using solar lamp to study in a remote village
Credit: CARICOM Newsletter

Decade of Sustainable Energy for All: We have now entered the Decade of Sustainable Energy for All, 2014 – 2024, which was established by a resolution of the United Nations General Assembly in December 2012. Inter alia, the resolution highlights the goals of increased energy access, renewable energy (RE) usage and energy efficiency (EE). The focus of the resolution recognises that sustainable development is not possible without sustainable energy (SE), as well as, the reality that one in every five persons on the planet still lacks access to electricity, while one in every three does not have access to clean cooking fuel.

SE provides new opportunities: children can study after dark, clinics can store life-saving vaccines, etc. Additionally, it enables businesses to grow, generates jobs and creates new markets, thereby fostering growth in countries through more resilient and competitive economies.

UN Secretary-General Ban Ki-moon during the launch of the SE4ALL Initiative, stated that “With Sustainable Energy, countries can leapfrog over the limits of the energy systems of the past and build the clean energy economies of the future.”

Many of these potential benefits are relevant to most CARICOM Member States, where the energy challenge has been established as a major binding constraint to achieving economic competitiveness, growth and overall economic resilience. The goals of the Sustainable Energy for All (SE4ALL) Initiative are relevant to CARICOM, because:

  • The issue of lack of access is particularly relevant to some Member States; and
  • The main solution to the overarching energy sector challenges of the lack of affordability and\ the over-dependence on imported oil (characteristic of most CARICOM countries), lies in the increased diversification of their energy supplies with RE playing a major role, along with EE.

It is therefore considered useful for CARICOM to seek to be engaged with the developments in the context of the UN Decade of SE4ALL, given the potential support for SE development through this Platform.

Read more here.

Credit: CARICOM Energy Programme

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