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National Stakeholders Consultation on the drafting of an Energy Policy for Grenada, Carriacou and Petit Martinique – An Aide Memoire

1.0    Introduction

The Government of Grenada intends to develop and implement, as a priority, an energy policy that contributes towards the sustainable development of the country.  The government wishes the energy policy to benefit from a wide range of consultations within civil society.  The following draft paper is meant to act as a stimulus for public discussion and comment and does not purport to represent the Government’s policy at this time.
It may be argued that the way energy is produced and consumed is at the centre of the world’s current economic and environmental crises.  The development and implementation of GREEN ENERGY policies is seen by many, including the new US administration, as the means to both stimulate and retool our economies and address the climate crisis.
In June 2008, the price of oil on the world market peaked at US$147/bbl.  Since then, due to the global slump in economic activity, oil has fallen to less than US$45/bbl., but is this a temporary reprieve?  The International Energy Agency (IEA) predicts that world demand for oil will continue to contract in 2009.  However, mid term predictions (and the wishes of OPEC) envisage oil stabilising at around US$ 60 – 80/bbl.  Long term predictions are that oil will again rise to overUS$100/bbl when economies emerge from the current downturn.
Since the definitive report of the Intergovernmental Panel on Climate Change (IPCC) in 2007, predictions of both the environmental consequences and the speed of climate change have become dire.  Sir Nicholas Stern published the “Economics of Climate Change” in 2007, clearly indicating that it is economically prudent to take action against climate change now rather than wait until the problem gets worse.   On a global scale, Grenada is a miniscule contributor of greenhouse gases (GHGs), both on a per country and a per capita basis.  However, like most, if not all, small island developing states (SIDS) Grenada is on the frontline of this environmental and public health crisis.  Transitioning to a low carbon economy gives Grenada the moral authority to lobby the large emitters to do the same.
Although there is significant potential for offshore oil and gas exploration and exploitation, currently, Grenada remains an importer of nearly all of its energy requirements.  Grenada is a signatory to the regional Petro-Caribe agreement, which allows for the purchase of petroleum products on concessionary terms from Venezuela with deferred payments.


2.0    The Current Situation

The current energy situation in Grenada could be summarised as follows:
o     Almost 100% of electricity is produced by a private utility (GRENLEC), using generators fuelled by imported diesel. Sales for 2008 were 195.9GWh, peak demand is currently around 39.4 MW and demand is expected to increase at 4% per annum in the business as usual (BAU) scenario.  Approximately 184,161 kWhrs of electrical energy were produced from renewable solar sources in 2008.
o    All vehicles currently on the roads in Grenada, Carriacou and Petit Martinique are powered either by diesel or gasoline.  There are no hybrid or flexi vehicles on the island.  Neither are there any natural gas vehicles.
o    In 2004, Grenada emitted approximately 200,000 tonnes of CO2 equivalent to 2.7 tonnes of CO2 per capita.

3.0    Draft Principles for a Sustainable Energy Policy

If the overarching goal of the energy policy is to contribute towards the sustainable development of Grenada, then perhaps it may be prudent to seek to ground the policy within the framework and principles of sustainable development.  There are three green economic principles that are generally applied to resource use:
1.    We should not exploit resources at a rate greater than we can assimilate the waste that is generated.  Globally, in the energy sector, it is precisely because we have ignored this principle (we generate more carbon dioxide by burning hydrocarbons than the world’s sinks can take out of the atmosphere) that we have the current climate crisis.  We may also wish to apply this principle to any environmental regulatory regime developed for offshore drilling for oil and gas or on-shore geothermal explorations.  It is certainly one of the reasons why nuclear energy is not being considered as an alternative for Grenada.
2.    We should not exploit renewable resources at rates greater than they can be replenished.  This principle may apply to the use of biofuels, in particular if the feedstocks are produced locally.
3.    Non-renewable resources should not be developed at rates greater than they can be replaced by renewable resources.  This principle may apply to the use of Grenada’s potential hydrocarbon resources.

Two words often mentioned in the context of sustainable development are efficiency and equity.  Efficiency in the energy sector would apply to all sections of the supply chain, including the costs and the amount of waste produced to find, collect, transport, store and use energy.  Equity may refer to intergenerational equity which would imply leaving some of the non-renewable resources (oil and gas) for the next generation.  Equity in energy may also be intra-generational, implying that access to minimal energy services may be considered a right and not a privilege.  Rural electrification programmes and state-subsidized fuel and electricity costs for the vulnerable and disadvantaged in society may be considered in this context.
What are the key sustainable development principles that should be applied to a Grenadian energy policy?

4.0    Draft Major Objectives of the Energy Policy:

What should be the major goals or objectives of the national energy policy?  The following four (4) draft objectives are suggested:
1.    ENERGY SECURITY – to access abundant, affordable and reliable sources of energy to sustain economic development.
2.    ENERGY INDEPENDENCE – to reduce reliance on imported fuels for vital national security and economic reasons.
3.    ENERGY EFFICIENCY – to promote conservation and reduce wastage.
4.    GREEN ENERGY – to meet any projected future international requirements on Green House Gas (GHG) emissions and to minimise any potential environmental or public health effects associated with energy use.

5.0    Suggested Strategies

The following strategies are suggested as means to obtain the desired objectives of the energy policy and if adopted would become the core of the Government’s energy sector action plan.  Alternative suggestions and comments from stakeholders are welcomed.

a.    Explore alternative hydrocarbon suppliers to Petro-Caribe (e.g. Trinidad, extra-regional suppliers of diesel, gasoline, kerosene, natural gas)
b.    Switch fuels used for electricity generation (from diesel to Heavy Fuel Oil [HFO] or natural gas).  Note that the preferred switch to natural gas will require regional cooperation and the ability to switch is time-sensitive.
c.    Introduce flexi-fuel to the transportation market.  In addition to the environmental benefits, energy security would be improved by providing an opportunity to increase the number of fuel suppliers by bringing an ethanol supplier into the market.

a.    Explore and exploit any potential offshore hydrocarbon resources.  This will require:
i.    Resolution of existing contracts.
ii.    Resolution of maritime boundaries with Trinidad and Tobago and Venezuela.
iii.    Creation of the enabling and regulatory legislation (financial and environmental) (e.g. an Oil for Development Act, Maritime Boundaries Act, Offshore Oil and Gas Exploration Act).
iv.    Generation of commercial interest by potential private sector developers.
b.    Identify and develop indigenous sources of renewable energy (RE).  This key strategy not only helps to achieve the objective of energy independence but also promotes Green Energy and decarbonisation of the economy.  The following steps will be required:
i.    In electricity generation:
•    Review legislation on geothermal resources.  Create new legislation if required (e.g. Geothermal Act).
•    Review share purchase agreement with GRENLEC and the Electricity Supply Act to allow for Renewable Portfolio Standards (RPS) and Feed-In-Tariffs for small Independent Power Producers (IPPs).
•    Expedite development approvals for renewable energy projects (e.g. wind farms)
•    Provide fiscal and other economic incentives for RE developers
•    Seek funding for RE projects from carbon markets (e.g. CDM)
•    Enter into a partnership with GRENLEC to conduct a full-fledged geothermal feasibility study, if preliminary data warrant.

ii.    In transport:
•    Provide the infrastructure to allow for the introduction of flexi-fuel, hybrid and alternative fuel vehicles:
a.    Obtain a source of low-sulphur diesel
b.    Obtain a source of ethanol or already blended ethanol/gasoline (e.g. E10, E30 or E85)
c.    Adapt terminal and storage facilities.
d.    Adapt tanks and pumps at service stations as necessary
e.    If natural gas is obtained for electricity generation, it may make sense to construct a natural gas fuelling station and run a fleet of public vehicles (e.g. buses, refuse trucks) on natural gas.
•    Set annual quotas/targets for the importation of flexi and hybrid vehicles by dealers and by the government.

3.    ENERGY EFFICIENCY: The strategies to achieve the objective of maximising energy efficiency cut across all sectors and will require an integrated and comprehensive approach.  A separate plan of action will be prepared to cover energy conservation and efficiency.  However, the major steps to be taken are as follows:
a.    Develop an Energy Efficiency Unit within the Energy Division
b.    Develop and deploy a sustained  Energy Efficiency public awareness programme
c.    Develop and deploy a Public Sector Energy Conservation Programme
d.    Enact an Energy Efficiency Act, which will, inter alia,
i.    Create energy efficiency standards for mechanical ventilation, air-conditioning, lighting, appliances and hot water systems within institutional, commercial and industrial buildings. These standards will deal with the building envelope as well as the appliances within.  Separate standards are to be developed for domestic buildings.
ii.    Mandate the use of energy efficient appliances and lighting.
iii.    Mandate the labelling of appliances to provide information on the efficiency of that appliance.
iv.    Mandate a certain level of energy efficiency certification for all buildings. An example of such a certification is the Leadership in Energy and Environmental Design (LEED).
v.    Mandate energy audits for to-be-determined large public and private consumers.
vi.    Mandate the publishing of the results and actions taken as a result of the above mentioned audits.
vii.    Require certain standards for energy audits and certification of the auditors themselves.
viii.    Mandate certain vehicle fuel efficiencies for imported vehicles.
ix.    Mandate the Government of Grenada to use a certain number of hybrid vehicles.
x.    Make training in energy efficient driving mandatory for certain organisations.
xi.    Mandate the regular testing of vehicles to maintain a certain level of efficiency.
xii.    Recommend economic incentives and penalties for specific sectors: tourism, industry and agriculture.
xiii.    Develop “tropicalised” standards for all of the standards used in the Bill.

e.    Provide fiscal and other incentives for energy conservation.
f.    Develop and monitor indicators of national energy consumption and efficiency (e.g. energy intensity – amount of energy required to produce a unit of GDP)

4.    GREEN ENERGY: The majority of the strategies listed above (for renewable energy and energy efficiency) will also serve to achieve the objective of limiting the environmental health impacts of energy usage.  In addition to those strategies already listed, the following Green Energy strategies are also recommended:

a.    Promotion of public modes of transport (a review of the national transportation plan)
b.    Development of a national Building Code (with energy efficiency standards)
c.    Promotion of water conservation (results in energy savings) in households, commerce and agriculture.
d.    Promotion of the use of science and technology (including information and communication technology) to reduce the energy required to achieve tasks.

Category/ies:Grenada - Policies, Plans, and Legislations, Policies, Plans, and Legislations.
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