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Energy efficiency and renewable energy in the Caribbean

Economic Commission for Latin America and the Caribbean (ECLAC)

Dependence on imported fossil fuels within the Caribbean Community (CARICOM) has created significant macroeconomic challenges for fuel importing countries. The value of energy imports compared to total imports in the importing Member States have progressively increased over the years. This scenario has a deleterious impact on macroeconomic stability. Petroleum derivate imports account for between 40 per cent and 60 per cent of total export earnings for countries such as Jamaica and Guyana which have a larger industrial base than the other countries. For the tourism/service oriented economies such as Belize, Grenada, Saint Vincent and the Grenadines and Barbados, petroleum imports range from 13 per cent to 30 percent of export earnings. 

This dependence has direct costs, as well as indirect economic, social and environmental costs, and impacts that are reflected in issues such as health, global warming, agriculture, property damage and insurance, tourism, poverty, and population displacement. Therefore, globally, the imperative to significantly improve efforts in energy conservation and energy efficiency remains a priority. The global economic crisis, rising debt among nations, energy security, emerging constraints in energy supply and climate change concerns contribute to the pace at which countries continue to promote energy conservation and efficiency programmes and develop associated policies. 

In the last few years, renewable energy technologies have experienced substantial improvements in cost, performance and reliability, making them competitive in a range of applications. Led by wind and photovoltaic technologies, they represent the fastest growing of all energy industries. The momentum for renewable energy worldwide is strong, and the prospects for these technologies virtually untapped. 

In the Caribbean, the drivers for active support for the implementation of renewable energy initiatives have remained fairly constant over time. Initially, it was the fluctuating price of oil which led to a policy priority for alternative energy sources for energy security. Today it also is increasing environmental awareness and concern about sustainability of conventional energy use, as well as climate change. In addition, renewable sources of energy provide benefits that are not reflected in energy policies and market conditions, including increased employment, reduced import dependence, and reduced burdens on foreign exchange.

However, the fact that the renewable energy potential of nations is far from maximised is due in large measure to a number of outstanding barriers which put renewable energy at an economic, regulatory, or institutional disadvantage relative to other forms of energy. Barriers include subsidies for conventional forms of energy, high initial capital costs, imperfect capital markets, lack of skills and information, financing risks and uncertainties, and a variety of regulatory and institutional factors. Some of the barriers and the measures to overcome them are presented in the table below:

 

Barrier to Implementing Energy Conservation and Efficiency Strategies Measures to Remove Barriers
Lack of information Information centres and services; appliance labelling and consumer information
Lack of trained personnel or technical or managerial expertise Development and delivery of training programmes
Below long-run marginal cost pricing and other price distortions Instituting supportive legal, regulatory and policy changes
Regulatory biases or absence of regulations to support energy development Development of relevant policies and standards
High transaction costs Market development and commercialisation; development of demand- side management programmes, support for the introduction of energy service companies
High initial costs of energy efficiency technologies coupled with lack of access to credit Develop innovative financing mechanisms
Higher perceived risks of the more- efficient technology Technology research, adaptation, and demonstration; and/ or performance contracting
High user discount rates Support for the introduction of energy service companies
   

Renewable energy is indigenous, non-depleting, modular and environment-friendly and can meet a broad spectrum of energy demand. It can provide energy access and meet unmet demand; provide captive energy thus conserving fossil fuels and electricity; and augment grid power. With these benefits in mind, countries in the Caribbean subregion have undertaken different measures to overcome the aforementioned barriers. Additionally, the CARICOM energy policy calls for a fundamental transformation of the energy sectors of Member States through the provision of secure and sustainable supplies of energy to minimise energy waste, ensure that all citizens have access to modern, clean and reliable energy supplies at affordable and stable prices, and to facilitate the growth of internationally competitive regional industries towards achieving sustainable development.

 

Source: www.stakeholderforum.org

 



Category/ies:Barbados News, Belize News, Grenada News, Guyana News, Jamaica News, News, Regional News, St Vincent and the Grenadines News.
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