Issue 7 of CC ENERGY, the CARICOM Energy Programme's Quarterly Newsletter


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Issue 7 of CC ENERGY, the CARICOM Energy Programme's Quarterly Newsletter

  1. 1. Energy CARICOM Energy Programme Quarterly NewsletterApril - June 2011 Issue 7 Energy Security and Food Security LinkBrought into Focus during the First Half of 2011The link between the energy and Integration of the CARICOMagriculture sectors in the Caribbean Secretariat, which falls underCommunity (CARICOM) was the responsibility of Assistantbrought into sharp focus during the Secretary-General,second quarter of 2011 as the Region Ambassador Irwinsought to better understand the key LaRocque. Following thosedrivers of the escalation in food prices presentations, CARICOMand to develop appropriate responses. Trade Ministers engaged inThis issue was first raised by Senator spirited discussions on thethe Hon. Joanne Massiah, Minister of matter.State within the Ministry of LegalAffairs, Antigua and Barbuda in her Rising world oil prices affectremarks as Chair of the 35th Special the prices of food and nonMeeting of the Council for Trade and food commodities mainlyEconomic Development (COTED) on through the increased cost ofEnergy in March 2011. inputs to the production and distribution process. For foodThis matter again took centre stage at commodities, the cost ofthe 32nd Regular Meeting of the fertilizer, irrigation, farm toCOTED in May 2011, where it was market transportation,included as a key Agenda Item at the processing, export trade Senator the Hon. Joanne Massiahrequest of the Government of Antigua transportation, packaging Minister of State within the Ministryand Barbuda. Presentations on this cost, storage and the cost of of Legal Affairs, Antigua and Barbudaissue were made by various Units transport for distribution to(including Energy and Agriculture) of end users are all impacted. Athe Directorate of Trade and Economic debate is occurring however, as to whether increases in world oil prices are a significant driver of higher Explore this issue Page food prices, especially since the impact at the national level depends on the food production processes, as well Some Positive Developments in the Second Quarter of 201 3 1 as, the proportion of food commodities Minister with Responsibility for Energy - Part 6 5 imported and domestically produced Carbon Footprint Labelling: An Increasing Trend which has inputs, etc. Implications for CARICOM 7 Two recent reports, one by the World Preparations are Underway for Staging of the First Bank (WB) Food Price Watch, April CARICOM ENERGY WEEK in November 2011 8 2011, and the other, a Policy note by Update on the Caribbean Renewable Energy the Inter American Development Bank Capacity Support (CRECS) Project 9 (IDB), April 2011, support different Organisation of Eastern Caribbean States to Benefit sides of this debate. The former report from Sustainable Energy Technical Assistance titled, “Poverty Reduction and from the Caribbean Development Bank 10 Equity” seemed to make a strong link Energy News 11 between recent increases in food Natural Gas Brief 15 page 2
  2. 2. Energy Security and Food Security Link...from page 1 failures that contributed to the price surges of both 2007-8 and 2010-11. In treating with energy as an importantprices and the surge in oil prices, and input to the cost of food production andtheir association with events in the The Link in CARICOM: It has been distribution in CARICOM, it wasMiddle East (see figure below). It the experience in CARICOM, that reiterated that Member States needednoted also that a 10% increase in crude increases in world oil prices have to re-double their efforts towardsoil prices is associated with a 2.7% significantly negatively impacted energy efficiency and conservation,increase in the World Bank Food Price food commodities prices. This is explore alternate energy options, asIndex through multiple channels. The considered to be related to the large well as, coordinate efforts towardslatter report titled, “How Will the Food import component of food regional strategic approaches. ThesePrice Shock Affect Inflation in Latin commodities, the resulting higher approaches include the integration ofAmerica 1 and the Caribbean?” electricity costs (the Region having energy systems to facilitate crosspointed to other factors and identified among the highest in the world) and border trade in energy, as well as arising oil prices as having only higher transportation costs. The review of the system used to referenceminimal impact on some Latin degree of impact varies from one the pricing of petroleum products inAmerican and two Caribbean Member State to another and needs to CARICOM.countries involved in the study, viz, be further studied, using region andThe Bahamas and the Dominican country specific data. With regard to food production andRepublic. It argued that the hike in distribution, it was noted that the responses needed to be multi-sectoral, and effected through partnerships that include the private sector, regional institutions (e.g. UWI, CARDI) and international development partners, such as, the FAO, IICA, etc. The COTED also cited the need to review and assess items that are inputs to the food production process so as to identify those that could benefit from removal of the Common External Tariff (CET) as a means towards reduction of the cost of food commodities. The need to implement previously agreed policy actions, as Figure: Food and Fuel Price Trends well as the food and nutrition policy Source: Food Price Watch – World Bank was also underscored. A Consultation staged by the Food andfood prices is a result of a combination CARICOMs Response to the Agriculture Association of the Unitedof medium-term demand increases, Impact of Rising World Oil Prices Nations (FAO) in Trinidad andslower agriculture productivity on Regional Food Prices: Inter alia, Tobago, June 2011, which benefittedgrowth and short term supply the 32nd COTED concluded that while from the input of regional anddisruptions. It concluded that the short term options are limited, international experts, seemed to pointmedium-term trends had been medium and long term strategies must to the need for improved informationexacerbated by a series of shorter-term be sustainable and impacting. In sharing of the prices of products andevents such as, the increasing use of general, the Region was challenged to inputs, improved research andcorn (maize) to produce ethanol in the adopt bold, innovative and more development (R&D), facilitation ofUnited States2. Also on the supply proactive approaches based on risk cross-border investment, support forside, the higher frequency of extreme analyses, forecasting utilisation of farmers organizations, strengthenedclimatic events (from droughts in regional natural resources and legislative and regulatory frameworks,Australia, Argentina and Russia, to aggressive resource mobilisation at as well as, harmonization in variousfloods in the staple producing areas of the international level. areas.the US) are to be blamed for the crop1Bolivia , Brazil, Colombia, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Panama , Peru , Uruguay2The production of corn-based ethanol absorbed nearly 35 percent of the US crop, or about 15 percent of the global corn crop.Page 2 CARICOM Energy Programme Quarterly Newsletter
  3. 3. Some Positive Developments in the Second Quarter of 2011 by Joseph Williams - Programme Manager, Energy1. Heads of Government CARICOM countries, this apparent Identify Renewabale turning point in the upward trajectory of world oil prices observed in the Energy Development second quarter of 2011 is welcomed. Among Top Priorities for the Community It is also clear that the members of the International Energy Agency (IEA)At their Retreat held in Guyana in May will not stand idly by and watch oil2 0 11 , C A R I C O M H e a d s o f prices spiral to further catastrophicGovernment in seeking to focus the levels, as seen from their decision nearefforts of the Community identified the end of June to release into theRenewable Energy Development as market some 60 million barrels fromone of the key priority areas for focus. their Strategic Petroleum ReservesThis is significant given the critical (which is maintained for major supplyimportance of renewable energy disruptions). The USA is contributingdevelopment for: i) contributing to the approximately 50% of this amount Joseph Williamsincreased energy security of the which will reduce its reserves by 5%. Programme Manager, EnergyRegion by forming a hedge to world oil At the time of writing, this move higher world oil prices have positiveprice volatility though diversification appeared to have slashed US$10 per revenue implications for theof supplies; ii) laying the basis for barrel off the two leading benchmark significant petroleum exporters ineconomic competitiveness (through crude prices, WTI and Brent (see CARICOM (Trinidad and Tobago, andstable and lower cost over time); and figure below). It is noted however, that Suriname), it is also generally agreediii) achieving a sustainable energy despite reduced oil demand from the that excessively high world oil pricespathway and attaining low carbon North American market, the tightening will not be beneficial to the globaldevelopment. of supplies from OPEC member economy and their longer term interest. countries may add to upward pressure The International Energy AgencyIt is considered that this decision by the on prices over the coming months. It (IEA) considers prices in the range ofCARICOM Heads of Government should also be noted that any reprieve US$70-US$80 per barrel to be “faircoupled with the earlier mandate to in the upward trend in prices is price” to encourage continueddevelop a Regional Sustainable welcomed by net oil importing investment in the petroleum sector.Roadmap and Strategy, now form the countries within CARICOM. Whilebasis for the galvanizing support toassist Member States with theirnational strategies and related projectstowards building capacity andincreasing investments for RE.2. World Oil Price Trend in the Second Quarter of 2011The market remains quite volatile, butit is significant that after reaching a 33-month high in April 2011 (with Brenttrading at US$127 and West TexasIntermediate (WTI) trading at US$114per barrel), crude oil prices eased on Figure: Trend in World Oil Prices (WTI and Brent)average in May 2011, registering their NOTE: The WTI is the main US Benchmark for crude oil prices while the Brent is the mainfirst monthly decline since July 2010, European benchmark price. The difference between the WTI and Brent is attributed toowing to uncertainties in the global other supply and demand issues.economic recovery, a stronger USdollar and speculative trading during page 4the month. For net energy importingCARICOM Energy Programme Quarterly Newsletter Page 3
  4. 4. Some Positive Developments in the Second Quarter of 2011...from page 3 3. Finalization of the CARICOM Energy PolicyThe process of finalization of the determined that Member States should As mandated by the 35th SpecialCARICOM Energy Policy was be given more time to submit COTED on Energy, an update on theadvanced in May 2011 with the hosting comments and that it would be status of the Policy was submitted toof a Meeting of Senior Energy necessary for another Meeting of the 32nd Regular Meeting of theOfficials via video conference to Senior Officials to be convened, to Conference of Heads of Governmentconsider the updated version of the further review the updates and finalise of CARICOM in July 2011. It isDraft Policy reflecting inputs from the the draft to be submitted to CARICOM intended that the finalized CARICOM35th Special COTED (Energy), March Energy Ministers. Another Meeting of Energy Policy will be ready for2011, as well as subsequent feedback Senior Energy Officials is being presentation to the Inter-Sessionalfrom Member States. The process also targeted for September 2011, while the Heads of Government Meeting duringbenefitted from feedback from Meeting of Energy Ministers via video the first quarter of 2012.International Consultants, Detlef Loy conference is targeted for the lastand Dr. Trevor Byer. The Meeting quarter of this year. 4. Plans for CARICOM Energy Week AdvancedA virtual dialogue of Energy Week June 27 to discuss plans and OLADE through the utilisation of itsFocal Points, representatives of preparations for CARICOM Energy Online Training Platform. See updateCARICOM Member States and Week scheduled for 6-12 November on page 8.Implementing Partners was held on 2011. This dialogue was supported by 5. Strong Global Performance in Growth of RE in 2010 - Renewables 2011 Global Status ReportThe Renewable Energy Policy global electricity supply last year, and Government policies and incentivesNetwork for the 21st century (REN-21) by early 2011 this increased to one programmes, as well as a reduction inreported that despite continued quarter of the global power capacity the price of PV modules.economic recession and incentive cuts, from all sources. Global investmentsin 2010, global renewable energy in renewables increased over 30% to a The Renewables 2011 Global Statusperformed well, showing strong record $211 billion. The strong Report can be accessed atgrowth in all end-use sectors (viz, performance was driven by increased http://www.ren21.netpower, heat and transport) andsupplied an estimated 16% of globalfinal energy consumption. Renewableenergy accounted for approximatelyhalf of the estimated 194 gigawatts(GW) of new electric capacity addedglobally during the year. Renewablesalso delivered close to 20% of thePage 4 CARICOM Energy Programme Quarterly Newsletter
  5. 5. Minister with Responsibility for Energy - Part 6 access to electricity by 1999. In 2002, and how could these be surmounted? rural electrification continued under the Unserved Areas Electrification Prime Minister: Indeed, the Programme which was intended to hydropower potential of Guyana has target 40,000 households. In fact, by long warranted attention with 2008, networks were completed to considerations and preparations for allow 47,000 households access to exploiting some sites in the 1960s and electricity service. Over the past two 1970s. A study over the 1970s to early decades, the customer base for the 1980s listed over 70 sites with fully state owned electricity company potential of more than 7000 MW, (except for during the period 1997 to about two thirds of this potential at 2003) has more than doubled from about a dozen sites in two adjacent Honourable Samuel Hinds 70,000 to 152, 000 consumers. river basins arising in the Pakaraima Prime Minister and Minister mountains – the Mazaruni and the Responsible for Energy, Republic of Guyana The opportunity is being taken to Potaro. The challenges facing Energy : Prime Minister, what would consolidate and upgrade the sugar development so far have been: factories to better integrate their i) Geography – the sites are far fromyou say are some of the most electricity production into the grid,significant changes in Guyanas the coast where the local population and to install new bagasse fired boilers and demand sector over the past two of higher pressure so that they candecades? export power to the grid. The Guyana Sugar Corporation commissioned 10 ii) Development costs – hitherto, thePrime Minister: The most significant MW of HFO fired capacity in 2007 alternating rainy and dry seasons andchange in the energy sector in Guyana and 30 MW of Bagasse fired co- the topography of the land have led toover the past two decades has been in generation capacity in 2008 at its new projected prices of power for a purposeelectricity generation and increased Skeldon Sugar Factory. In 2009, theaccess to this service. At the built large consumer, such as an Guyana Power and Light (GPL) aluminium smelter, beingcommencement of the period under completed a 20 km, 69 kVconsideration, power generation uncompetitive with electricity from transmission interconnection to thecapacity was inadequate to meet factory that allows for the dispatch of cheap gas and other fuels.demand, with up to 50% load shedding more than 10 MW of power from thatbeing effected on a daily basis. The facility. This generation capacity is The potential for hydropowerlimited available generating capacity currently providing base-load service development in Guyana is now brightconsisted mostly of diesel fired units to the Berbice Interconnected System as:supplemented by three old, unreliable which has approximately 35,00010 MW steam turbines. fossil fuel prices have increased consumers. dramatically over the last decades.An incremental transformation of the In 2009, a new 20.7 MW HFO firedsector commenced in 1993 and by power plant consisting of three 6.9 awareness of the additions to1997, 54 MW of new power MW units was commissioned with Climate Change from thegeneration equipment was installed in work currently in progress to expand combustion of fossil fuels havesix power plants (48 MW of which was this plant by 15.6 MW (2x7.8 MW sparked a worldwide effort to pursueHFO fired), a new 28 km, 69 kV units). Today, over 98% of thetransmission line was constructed renewables with concomitant potential consumers on Guyanas interest in Guyanas potential.while two 69 kV substations were Coast, where 90% of the populationexpanded and electricity was reside, have access to electricity.introduced to an island in the less costly hydropower sites aroundEssequibo River to serve over 1,000 Energy :Guyana has significant the world are used up and developersconsumers. hydropower potential, more than any now see Guyana as having the other CARICOM country, what in potential to meet regional powerIn 1997 also, a rural electrification your opinion are the main challenges needs.programme was implemented which faced by the country in fullyallowed more than 5,000 consumers page 6 exploiting its hydropower resourcesCARICOM Energy Programme Quarterly Newsletter Page 5
  6. 6. Minister with Responsibility for Energy - Part 6from page 5 and bagasse based. Transportation Prime Minister: There should be there is greater readiness to conceive fuels would be switched to blends of maximum sharing of information, arrangements which can accept large biofuels and petroleum. Studies are experiences and practices. This should swings in generation linked to the ongoing to produce sufficient ethanol foster the realization of good solutions from available molasses to initiate an in each country, and create and large seasonal variation in river flow. E-10 blend in about three years time. maintain alertness and willingness toIt is well known that Guyana hopes that undertake joint actions for mutualarrangements for the construction of a Energy : In your view, how important benefit.165 MW hydropower plant at the is the regional approach to energyAmaila Falls on the Kuribrong River sector development?would be concluded by the end of theyear. This plant will be able to meet thepeak demand of the national grid inGuyana. Also, it has been announced Editors Notealso that the Guyana-Brazil Highlighting Pioneers of CREDP Project: The CaribbeanCooperation includes reviews of the Renewable Energy Development Programme (CREDP) is ahydropower potential at other sites in landmark renewable energy Project in the Caribbean. TheGuyana and possible electricity Project is considered to have laid an important foundationsupplies to Brazil. upon which many of the emerging sustainable energy developments are based and upon which future scaling-up Energy : At the 35th Special Meeting could take place. Energy hails the pioneers of the CREDPof the Council for Trade and Economic Project who were instrumental in its design and seek toDevelopment (Energy), CARICOMEnergy Ministers called for urgent highlight their contributions. Mrs. Mona Whyte is one of theresponse at the national and regional architects of CREDP.levels to surges in oil prices on theworld market, given its generally Energy congratulates Mrs. Mona Whyte for her contributionnegative impact on food prices as well to the development of the CREDP Project, as well as heras macro-economic indicators. In contribution to the development of Caribbean Energywhat ways can Guyana respond to such Information System (CEIS) over the years. (Owing to achallenges in the immediate future? number of constraints information for this usual feature was not secured).Prime Minister: Guyana will increasethe call to its people to conserve on theuse of petroleum based fuels, improveefficiencies and to consider renewableenergy where it might now beeconomic. Recall also, Guyanas thrusttowards switching electricitygeneration for its connected electricitygrid from petroleum based fuels tohydropower and Guyanas call to itspeople to grow more food for local andnational food security, and for export. Energy : If you were to paint a pictureof the energy use situation in Guyanaspower generation and transportationsectors in the next twenty-years, say by2030, what would that picture looklike?Prime Minister: Power generationshould have been switched from 90%petroleum based to 90% hydropowerPage 6 CARICOM Energy Programme Quarterly Newsletter
  7. 7. Implications for CARICOM Countries Although there are many challenges to overcome before widespread carbon labeling (including the need for harmonization of standards and simplifying the process), the implications of the current trends for energy production and energy efficiency in countries like those of CARICOM are apparent. Simply put, having national energy systems thatCarbon Footprint Labels indicate a France to set the Pace for European are based on clean and renewableproducts environmental impact or the Countries energy sources, as well as, energyquantity (in grams) of carbon dioxide France is considered to be making an efficient productive sectors willemissions associated with making and aggressive push where, in addition to become increasingly important totransporting them. The practice which the Government-backed initiatives, achieve and sustain relativebegan in 2007 in Britain was aimed at there is the planned introduction of competitiveness of the Regionsletting shoppers identify products with compulsory carbon labeling rules export products and services.the smallest footprints, thereby possibly as early as 2012, based on acausing producers to compete to law that was passed in 2010. This will Further, it is considered that given thereduce the carbon footprint of their be preceded by a yearlong experiment international nature of many supplyproducts and also provide information slated to begin this July 2011, that will chains, the process of calculatingas to whether locally made goods involve 168 firms in a range of products carbon footprints has startedreally were greener than imported industries applying carbon labels to a focus on cross-border carbon flowsones. products including furniture and rather than traditional national totals. cleaning products. The accompanying This latter may provide importingAlthough the practice is not yet campaign will raise awareness of firms in rich countries with anwidespread globally, it is quickly carbon labels among consumers. incentive to support the reduction ofcatching on, with labels now attached Product category rules have already emissions in developing countriesto a wide range of products. For been drawn up by the French through investment in efficiencyexample, in Britain, nine out of ten Standards Agency and the French improvements and cleanhouseholds reported buying products Environment Ministry for shoes, technologies.with carbon labels last year. In Japan, wood, furniture, shampoo and fabricthe Ministry of Economy, Trade and chairs. “Other European countriesIndustry launched a calculation and will be watching the Frenchlabeling programme in 2008 for which experiment closely, not the leastmore than 300 retailers and because their own exporters may have Energymanufacturers have signed up. South to adhere to the French rules.Korea has introduced a “Cool Label” Inevitably this has led to calls for a wishes to extend an invitationwhich is now carried on over 220 European standard for carbon to readers to submit news or relevant articles of interest inproducts including furniture, rice and labeling.” The Economist, June 4, relation energy sectorconsumer electronics. Labels have 2010 developments and in particular,been launched in Thailand (for 65 sustainable energyproducts), USA, Canada, Switzerland, development in their territories.Sweden and France.CARICOM Energy Programme Quarterly Newsletter Page 7
  8. 8. Preparations are Underway for Staging of the FirstCARICOM ENERGY WEEK in November 2011 – by Maxine Nestor, Regional Energy Policy Advisor – among Member States and States is available under several Development Partners through an R e g i o n a l S u s t a i n a b l e E n e rg y online meeting arrangement facilitated Initiatives that include an Energy by the Latin American Energy Awareness Component. However, Organization (OLADE). During this Member States were encouraged at the Meeting, Member States benefited First Virtual Dialogue (held in June from: a presentation on the Energy 2011) to consider options for the Awareness Week Guide developed sustainability of CARICOM Energy under the CREDP/GIZ; guidance on Week activities in subsequent years, how to organize Energy Week including sponsorship from the activities; and lessons learnt from corporate community. Maxine Nestor Guyanas and Saint Lucias previous Regional Energy Policy Advisor experience in staging Energy Visual Identity and Themes for Awareness Week. National Energy Week Events CARICOM Member States to National Energy Week activitiesStage Energy Week with National Guyana emphasized the need for within Member States will be stagedEvents thorough planning, stakeholders under a common CARICOM EnergyCARICOM Member States are consultation, team work, Week visual identity. It is proposed thatpreparing to stage CARICOM EnergyWeek from 6 – 12 November 2011,with the implementation of a series of The staging of CARICOM Energy Week as an annual event is aactivities at a national level that target decision taken at the 35th Special Meeting of the Council forthe general public, schools, and Trade and Economic Development (COTED) on Energy held intechnical and skilled persons. The Georgetown on 22-24 March 2011. CARICOM Energy Ministersprogramme for CARICOM Energy also agreed that CARICOM Energy Week would be staged fromWeek will vary in the different 6-12 November 2011, and in subsequent years, during theMember States but will cover second week of November each year.activities such as Sustainable EnergyExhibition, Symposium, Televised The broad objective of the CARICOM Energy Week is to raisePanel Discussion, distribution of awareness in relation to energy in general. This event will alsobrochures, flyers and posters,televised documentary on sustainable serve to convey the critical importance of energy to economicenergy, seminar, workshop, essay development, as well as, the important role that renewablecompetition, debating competition, energy, energy efficiency and conservation must play.quiz, science and technology fair, andtours among others. innovativeness and proactive several prototypes for a logo will be approaches. Meanwhile, some of the developed by mid-August and that the Planning and Preparation challenges highlighted by Saint Lucia process for selection of a suitable logoCARICOM Energy Week planning were prioritizing energy awareness will be one that involves theand preparation activities are being week among the other competing participation of the wider public in allcoordinated among Member States activities, fitting activities into the Member States, possibility throughand development partners under the school curriculum, sourcing funding online voting.CARICOM Energy Programme. and sponsorship for activities,Member States are currently ensuring that Energy Week remains Member States will develop theirestablishing Organizing Committees relevant through creative approaches individual theme for Energy Weekin their respective countries and and being prepared for the unexpected. 2011 that fits with the issues that aredeveloping their proposals for Energy most important to them. NationalWeek together with the budget. In Funding to Support National events will be built around theirJune 2011, the CARICOM Energy Events distinctive theme and concept.Unit hosted the First CARICOM Funding to support 2011 Energy WeekEnergy Week Coordination Dialogue Activities in the various MemberPage 8 CARICOM Energy Programme Quarterly Newsletter
  9. 9. Update on the Caribbean Renewable Energy Capacity Support (CRECS) Project – by Project Manager, Dr. Robert Stoddard – supply legislation; (ii) develop or primarily to assess the energy situation amend national energy supply laws; and to establish a framework for and (iii) develop regulations under the support. On the other hand, the visit to Nevis Geothermal Resources the DR was to identify opportunities Development Ordinance 2008. It is for South-South Cooperation in the now recognised that energy awareness field of energy. is a critical activity for sensitizing the Region to a number of important issues Under the CRECS, two major and developments with respect to presentations were made to key renewable energy sources and options, stakeholders with respect to conservation and efficiency, etc. “Renewable Energy Financing” and Hence, a tender was also launched to “Sustainable Energy and Risk Dr. Robert Stoddard Sustainable Energy Specialist, engage the services of a Consultant to Financing” in Jamaica, May 2011, and CARICOM Secretariat develop a Model Energy Awareness Trinidad and Tobago, July 2011, Programme. Most of these tenders respectively. failed on budgetary and technicalIntroduction grounds. Permission to relaunch the The University of the West Indies wasThe CARICOM Energy Programme tenders has been sought from the engaged in initial planning and scopinghas been implementing the Caribbean European Union. towards the provision of support for theRenewable Energy Capacity Support development of a MSc. Programme in(CRECS) Project funded by the In March 2011, a fact finding mission Renewable Energy and finalization ofEuropean Union, since signing of the from the CARICOM Secretariat’s the development of a MSc. in REContribution Agreement by the Energy Unit visited Haiti following a Management for the University.European Union and the CARICOM visit to the Dominican Republic (DR)Secretariat in late November 2011. late last year. The visit to Haiti wasThe Project seeks to build on workdone under the landmark CaribbeanRenewable Energy DevelopmentProgramme (CREDP) aimed atremoving barriers to renewable energydevelopment, viz, financing, Energyinformation and awareness, capacity CARICOM Energy Programme Quarterly Newsletterbuilding and policy in the energysector. The Energy Newsletter is a quarterly electronic publication which aims to increase awareness about issues and developments in theThe Key Elements of the CRECSProject are: energy sector of CARICOM Member States. It also seeks to(i) Addressing capacity barriers to provide information on activities under the CARICOM Energyincrease renewable energy penetration Programme in support of Member States energy sectorin Member States; and development.(ii) Increased investment in variousrenewable energy enterprises among There is a heavy emphasis on sustainable energy developmentCARIFORUM countries. issues, given the importance of these for enhancing the diversification of energy supply towards increased energy securityUpdate on Activities To date, five tenders have been in all Member States, as well as for increasing their climatelaunched. These tenders included the compatibility.procurement of Consultants servicesto: (i) develop model electricity andCARICOM Energy Programme Quarterly Newsletter Page 9
  10. 10. Organisation of Eastern Caribbean States to Benefit from Sustainable Energy Technical Assistance from the Caribbean Development Bank – by Leonard Deane – National Energy Efficiency increasing the economic Strategies and Action Plans as part competitiveness of the member of an overall cost reduction countries of the OECS. programme; model legislation including Importance of Energy to the regulations and rules for energy Economic Competitiveness of the management in the OECS within the OECS context of the OECS Economic Union At present, member countries of the that foster the implementation of OECS are highly reliant on fossil fuels initiatives for the efficient and to supply almost all of their energy sustainable production, and utilization needs, albeit that over the past years Leonard Deane of energy; and there has been a slow but steady SETA Project Coordinator, OECS Secretariat a public education and awareness increase in the utilization of renewable programme that will address the energy technologies to supply energyMember countries of the Organization knowledge, attitudes and practices of needs for power generation. Rising oilof the Eastern Caribbean States the general public within the OECS as prices have resulted in the drain of(OECS) 1 will soon benefit from it pertains to renewable energy and foreign exchange reserves for fuel-additional technical support to energy efficiency. related imports, consumer pricecomplement their on-going initiatives inflation, as well as increasedtoward establishing a clearer path to a Background to SETA production costs for industries withmore sustainable energy future. The Sustainable energy has been identified high energy use. This translates toCaribbean Development Bank (CDB) as a priority thematic area by the consequential negative impact onhas made grant funding in excess of US OECS Ministers of Environment. competitiveness. Additionally,$1.5 million available to the Secretariat Following the 12th Meeting of the concerns about climate change andto the OECS for the Sustainable Energy Ministerial Environmental Policy energy security have resulted inTechnical Assistance (SETA) Project. Committee in June 2000, a mandate intensified efforts to identify was given to the then OECS Natural alternatives to fossil fuels and ways toObjectives and Outputs of SETA Resources Management Unit to efficiently produce and use energy.The general objective of the SETA develop approaches for improving theproject is to “provide the guiding performance of the energy sector of The general consensus is that the pathframework and create an enabling the OECS. In particular, the Ministers towards economic competitiveness,environment to support the efficient requested that the OECS Secretariat poverty alleviation, and economicand sustainable production and use of prepare a recommended policy and resilience for the member countries ofenergy in the member countries of the public awareness strategy on energy the OECS must be informed by anOECS”. In addition, the Project aims to management for their consideration energy programme that improvesdevelop the capability of the member and adoption. Subsequently, at a sector efficiency, reduces the burden ofcountries to employ holistic Special Meeting on the Economy held energy costs on economies, diversifiesapproaches to energy management in in St. Kitts on October 10, 2002, the fuel sources, leverages private capitalsupport of the OECS objective of Heads of Government of the OECS and safeguards the environment. Thisintegration of economies, and member countries charged the OECS will require the establishment of ancoordination and harmonisation of Secretariat to consider, among other enabling environment in the OECSpolicies of its member countries. things, “a clear and strategic energy Sub-Region to encourage investment policy” as part of a stabilization, in these alternatives, coupled with aSpecifically, SETA activities will stimulation and transformation change in the mindset of energydeliver: package for the economies of the consumers. an OECS Sub-Regional Energy member countries of the OECS. The instructions were specifically aimed at page 12Efficiency Strategy complemented by1 OECS comprises the six independent states of Antigua and Barbuda, Commonwealth of Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent andthe Grenadines, and the British Overseas Territories of Anguilla, British Virgin Islands and MontserratPage 10 CARICOM Energy Programme Quarterly Newsletter
  11. 11. Energy News New Ministers with Responsibility for Energy in Jamaica and Trinidad and TobagoIn June 2011, both Jamaica andTrinidad and Tobago appointed newMinisters with responsibility forEnergy following Cabinet re-organization in these countries. Thenew Minister of Energy and Mining inJamaica is the Honourable CliveMullings, who previously occupiedthis post up to April 2009. He hasindicated that, inter alia, one of his keyobjectives is the implementation of aLNG fuel supply option as efficientlyand quickly as possible, inline withGovernments policy.The new Minister of Energy andEnergy Affairs in Trinidad and Tobago Hon. Clive Mullings Senator the Hon.Kevin C. Ramnarineis Senator the Honourable Kevin Minister of Energy and Mining, Jamaica Minister of Energy and Energy Affairs,Ramnarine. Minister Ramnarine, a Trinidad and Tobagoformer Parliamentary Secretary in the Trinidad and Tobago has fallen from CC Ene congratulates Ministers EnergyMinistry of Energy, has indicated that approximately 140,000 barrels per day Mullings and Ramnarine on theirhis first priority is to increase the level (bpd) to current levels of respective appointments and wishesof oil production, while the second is approximately 95,000 bdp. Further, them success in the discharge of theirto attract foreign direct investment: oil and natural gas remain critical to mandates.“We need to get the downstream the countrys economy contributing 45industries moving”. percent to its GDP and 60 percent of its foreign exchange earnings.Over the last decade, oil production inOLADE AND CARICOM SECRETARIAT ENGAGEIN MEETING ON COOPERATIONOn Friday, 10 June 2011, the Alicia Vallejo, Training Coordinator, CARICOM Member States; ii) theCARICOM Secretariat and the Latin Mr. Gabriel Hernandez, Information decision to explore the OLADEAmerican Energy Organization Coordinator, and Mr. Jorge Asturias, Energy Balance and other tools for use(OLADE) hosted a virtual (online) Coordinator Sub- regional Office. as standard tools within themeeting to further advance general Community; and iii) the CARICOMcooperation and collaboration on a The objectives of the Meeting were to Secretariats indicative willingness torange of activities. The Meeting was share and exchange information on support the promotion of OLADEsattended by the team from the each organizations energy upcoming Energy Balance and EnergyCARICOM Energy Unit lead by programmes and to identify specific Information Systems Workshops in itsProgramme Manager, Energy, Joseph areas for collaboration and support. Member States. Training Sessions areWilliams. Attending the Meeting Key outcomes of the meeting include: scheduled for 11-15 July in Guyana,from OLADE were Mr. Fernando i) OLADEs offer to facilitate training 25-29 July in Belize and 1-5 August inFerreira, Director of Integration, Ms. to energy sector officials of Suriname.CARICOM Energy Programme Quarterly Newsletter Page 11
  12. 12. Energy Unit’s Mission to Haiti under CRECSAn important component of theCaribbean Renewable Energy L-R: Dr. Robert Stoddard (CARICOM Secretariat),Capacity Support (CRECS) Project Dr. Rene Jean-Jumeaufunded by the European Union (EU) (Advisor on Energy), Herveand being executed by the CARICOM Pierre-Louis (TechnicalSecretariat is the provision of technical Director of EDH), Isidoreassistance for energy policy and Priso Kotta (Consultant,strategy development, as well as Delegate Director forcapacity building in Haiti. This has Planning), Garry Jeantaken on significant importance in (Inspector General oflight of the current re-construction EDH), Myk Mannonefforts in the aftermath of the (Consultant, Delegateearthquake in 2010. Technical Director).A fact-finding mission was conductedby Programme Manager Energy,Joseph Williams and SustainableEnergy Specialist, Dr. Robert Dr. Rene Jean-Jumeau makes point to the Hon.Stoddard of CARICOM Secretariat, at Jacques Gabriel, Ministere n d o f M a r c h 2 0 11 , w h e r e responsible for Energyengagements were made with all key andJoseph Williams,players in the energy sector. The Programme Manager,CARICOM Energy Unit Mission also Energy, CARICOMengaged with the Inter-American SecretariatDevelopment Bank (IDB) during thevisit to Haiti and with the Office ofCARICOM Special Envoy to Haiti inMay 2011 during a separate visit toJamaica. Organisation of Eastern CaribbeanIn addition to the broader support forstrategy development, some areas for States to Benefit ...short term technical assistance and from page 10 Secretariat will supervisecapacity building in Haiti were also Implementation Mechanism implementation of the SETAsidentified. Capacity building and and Funding for SETA activities through a Projectadvisory support in resource SETA will be executed through the Coordinator who, among otherassessment and project development engagement of a number of things, will have responsibility forwere identified as urgent matters for consultancy services over a 35- facilitating the requiredsupport. month period until 2014. The consultations and participation in process of procuring consultants each member country.In general, the objectives of theMission were achieved. has commenced. It is expected that the engagement of consultants for The project is funded by a some components of the SETA technical assistance grant from project will take place in the third the CDB and a contribution from quarter of 2011. the OECS Secretariat. Energy The Environment and Sustainable Development Unit of the OECSPage 12 CARICOM Energy Programme Quarterly Newsletter
  13. 13. Meeting with CROSQ:Sustainable Energy & StandardsA meeting to facilitate the exchange of Caribbean on Energy Efficiency Sustainable Roadmap and Strategy (C-information on the role of standards Standards and Labeling Schemes, SERMS) being pursued by CARICOMbodies in the Region in area of energy especially as it relates to existing Secretariat, especially in the buildingefficiency was convened among key activities under the CSEP Project sector. An overview of the institutionalpartners and the CARICOM Regional being executed by OAS Secretariat, as capacities within the NSOs wasOrganisation for Standards andQuality (CROSQ) in Christ Church,Barbados on 27 May 2011.In attendance were representatives ofthe Bureaus of Standards fromAntigua and Barbuda, Barbados,Dominica, Guyana, Grenada, Haiti,St. Kitts and Nevis, St. Vincent and theGrenadines, as well as, executives ofCROSQ. Mrs. Diane Lalla-Rodrigues, Chairman of CROSQ & Section of Audience: Directors & Senior Officials ofMs. Carolina Pena, Manager, OAS Regional Coordinating Unit Bureaus of Standards in CARICOMThe lead coordinating role was carried well as, nascent energy efficiency provided, as well as their involvementout by CSEP/OAS Project in standards and appliance labeling in sustainable energy activities. A keyconjunction with the Energy projects to be pursued by the gap identified was that in general (withProgramme of the CARICOM CARICOM and OECS Secretariats, few exceptions) there was little or noSecretariat. Other key partners were and the SETA Project. link between the work of NSOs and thatthe CREDP/GIZ Project and the of the energy units in the variousSETA/OECS Project. The meeting The forum provided an opportunity for Member States, especially as it relateswas convened to take advantage of the articulation of the relevant elements of to sustainable energy development. Itpresence of senior officials of the CARICOM Energy Programme. It was recommended that the CARICOMRegional and National Standards was identified that CROSQ and NSOs Secretariat should seek to facilitate theOrganizations (NSOs) who were in have a key role to play in the development of stronger linkagesBarbados for their Council Meeting. development and implementation of between the programmes of NSOs and the Regional Energy Efficiency the work programme of EnergyThe meeting facilitated dialogue on Strategy under the Caribbean Units/Energy Ministries in MemberRegional Cooperation in theCARICOM Energy Programme Quarterly Newsletter Page 13
  14. 14. Drilling of Three Exploratory Geothermal Wells in the Roseau Valley to Commence Late July 2011 Project Coordinator, Jason Timothy, explained that the long term objective is to confirm the nature and extent of the potential geothermal resource at various sites within the Wotten Waven area and to determine the capacity of wells for sustainable commercial exploitation in generating electric power. VISIT for Information on Renewable Energy developments and Signing Ceremony happenings in theThe drilling of exploratory geothermal ceremony at the Public Service Caribbeanwells in the Roseau Valley is expected Training Centre in Roseau, Dominica. including a listingto commence at the end of July this The contract was awarded to theyear. Iceland Drilling Company and is being of upcoming funded by the Agence Francaise deThe contract for the over 4.5 million Development, the European Union and SustainableEuros Project was signed on the Government of Dominica. Energy eventsWednesday, 6 April 2011, during a World Bank Loan for the Establishment of Eastern Caribbean Energy Regulatory Authority (ECERA) Approved The World Bank has approved two implement regional arrangements for regulatory tasks, such as, tariff and zero-interest loans totaling US$5.6 electricity supply. investment plan reviews, and the million to facilitate establishment of definition of a regional licensing the Eastern Caribbean Energy The loan will fund activities to set up framework for electricity market Regulatory Authority (ECERA). and operationalise ECERA. These participants. The loans are repayable in 35 years, activities include carrying out the legal including a 10-year grace period. and consultative process leading to the The first phase of the ECERA formulation and ratification of the program will be launched with As a regional electricity sector ECERA treaty, defining options for the Grenada and Saint Lucia as regulator, ECERA aims to improve ECERA self-financing mechanism, participating countries. At the 35th electricity service delivery and reviewing tariffs and examining Special COTED on Energy held diversify sources of energy incentive mechanisms to promote during the first quarter of this year, generation, including renewables, renewable energy. The loan will also Antigua and Barbuda had signaled across the Organization of Eastern fund ECERAs initial three years of its intent to join ECERA. Other Caribbean States (OECS) countries. operation including its day-to-day OECS members have expressed Importantly, ECERA will increase operations and execution of core interest in joining ECERA at a later the capacity of OECS countries toPage 14 CARICOM Energy Programme Quarterly Newsletter
  15. 15. NATURAL GAS BRIEFChanging Natural Gas Landscape spell good and bad respectively for five power plants.and the Caribbean some Caribbean countries. Firstly,The global landscape for natural gas Trinidad and Tobago has been the Jamaica is pursuing the introductionhas rapidly changed over the last few largest supplier of LNG to the USA for of LNG for electricity production andyears and the change continues. Just a many years. Countries pursuing or therefore welcomes the increasingfew years ago, the US was a modest contemplating natural gas options do abundance in natural gas on the globalLiquified Natural Gas (LNG) importer, so to lower their energy costs, but market at generally depressed least in relation to its overallconsumption, and it was widely Many proponents ofexpected that American LNG imports the coal option havewould grow tremendously as a result of always pointed to thethe countrys declining domestic gas oil-gas priceproduction. However, the current indexation as a basisunconventional gas revolution is for concern that naturalliterally turning the situation on the gas prices would rise insupply side on its head. Moreover, the the future, compared torecession has led to lower demand for coal which has a longLNG. The US is now expected to be history of flat andlargely self-sufficient in terms of its stable prices.natural gas supply for the coming However, with thedecades. abundance of gas on the global market, andThe revolution had its genesis in the natural gas is also a cleaner fossil fuel with LNG becoming the main tradabledevelopment of new drilling with significantly lower global form, there seems to be de-coupling oftechnologies, viz, hydraulic fracturing warming potential than petroleum. the price trend in gas and oil as more(fracking) and horizontal drilling and more the market seems to bewhich have allowed the recovery of The Dominican Republic, (a member increasingly flexible, so much so, thatgas from sand shales. The economic of CARIFORUM and market for LNG gas prices have remained relativelysuccess of shale gas (unconventional from Trinidad and Tobago) earlier this low despite surges in oil prices.gas) in the United States since 2000 has year, saw its largest independentled to a rapid development of shale gas power producer, Empresa Generadora Other CARICOM Countries:in Canada, and more recently, has de Electricidad Haina (EGE Haina), Electric utilities in many OECSspurred interest in shale gas and largest generator, Compañía de countries, urged by leading gen-setpossibilities in Europe, Asia and Electricidad de San Pedro de Macorís manufacturers, are consideringAustralia. (CESPM), sign Memoranda of supplying the electricity sector from Understanding (MOUs) with Cheniere LNG. The big challenges have beenThe boom in American shale gas Energy to supply up to 0.6 million the small size of demand in the various(which now represents 23% of that tonnes per annum of liquefied natural islands and the logistics associatedcountrys gas production, up from 4% gas to that market beginning in 2015. with delivering small shipments offive years ago) has kept the price low in 15,000-20,000 cubic meters comparedAmerica, inspired exploration for Similarly, Puerto Rico (US territory) to traditional cargoes of above 160,000similar fields elsewhere and allowed which is another regional market for cubic meters.many LNG cargoes that were supposed LNG from Trinidad and Tobago, hasto be regasified at American terminals signed a contract with a US-based In Trinidad and Tobago, the lowerto seek other markets. LNG specialist, Excelerate Energy, to priced gas especially on the North provide Puerto Ricos electricity firm American market may be providing aOver the past five years, global with a floating regasification and challenge, as gas suppliers want higherproduction capacity for LNG storage unit (FSRU). This is an initial prices for their gas, while theincreased by 58% and its share of the step in the island states widespread downstream petrochemicalinternational gas trade has risen from transformation to natural gas which manufacturers need low-priced gas if23% to 31%, helping the world to shift includes ambitious LNG plans, they are to compete in North Americatowards more integrated and flexible including a proposed 92-mile (148km) and the Region. Some analysts are ofmarkets. This increased supply pipeline project that will underpin the(especially in USA) and lower prices shift from fuel oil to natural gas at its page 16CARICOM Energy Programme Quarterly Newsletter Page 15
  16. 16. UPCOMING EVENTS 1. CARILEC Engineers Support Renewable Energy Barbados Hotel, Barbados, Conference, World Trade Development in the 12-14 October 2011 Center, Curacao, 25-27 Caribbean, Suriname, 28-29 July 2011 September 2011 8. RE Investors Forum – Margins of CREF, Hilton 2. Meeting of Senior Energy 5. 11th Annual Energy Barbados Hotel, Barbados, Officials via Video Caribbean 2011 Conference, 12-14 October 2011 Conference to Review the Hilton Hotel, Trinidad & Draft CARICOM Energy Tobago, 4-5 October 2011 9. 9th OOCUR Annual Policy, 7 September 2011 Conference, Accra Beach 6. International 100% Hotel, Barbados, 2-4 3. CARILEC Renewable Renewable Energy November 2011 Energy Forum 2011, St. Conference and Exhibition, Thomas, 20-21 IRENEC 2011, Maltepe 10. SATIS 2011, Barbados, 8- September 2011 Türkan Saylan Cultural 11 November 2011 Center, Turkey, 6-8 October 4. Regional Workshop 2011. 11. CARICOM Energy Week, on Research, Development 6-12 November 2011 and Capacity Building at 7. Caribbean Renewable the University Level to Energy Forum 2011, Hilton NATURAL GAS BRIEF The Energy Unit can befrom page 15 petroleum production and significant contacted for furtherthe opinion that lower gas prices in expansion in natural gas production information on:North America may be attracting over the years) coupled with relatively lower prices for gas in global market, Telephone: 592-222-0139 (direct)investors to re-establish petrochemical 592-222-0001/75plants there, thereby providing a new means that Trinidad and Tobago may extensions 3521 and 3522source of competition for Trinidad and not be deriving maximum benefitsTobago. This, they opine, has from prevailing higher world oil Fax: 592-222-0224implications for the LNG market, as prices. Some commentators opine thatseen from the signalled export from this has given urgency for increased E-mail:the USA to the DR and Puerto Rico, petroleum production, with some;which are markets for LNG from players arguing strongly that the jwilliams@caricom.orgTrinidad and Tobago. Government should encourage exploration of heavy oils and tar sands.The fact that natural gas production in Exploration of heavy oils is consideredTrinidad and Tobago exceededpetroleum production since 1996 to have additional potential negative environmental impacts. Energy(there has been significant decline in DisclaimerThis Newsletter is distributed for the purpose of keeping stakeholders informed on energy sector developments and issues in the Region. The information contained here is notintended to be relied on for complete and authoritative source. Notwithstanding our efforts to provide up-to-date and accurate information, the CARICOM Secretariat cannotaccept any responsibility for the consequences of errors or omissions in the content of this newsletter.Nothing in the Newsletter should be construed as the intention of the CARICOM Secretariat to infringe upon any trademarks or brand names or other intellectual propertyrights. This Publication was sponsored by CREDP - GIZPage 16 CARICOM Energy Programme Quarterly Newsletter