St.

Kitts and Nevis Sustainable Energy Plan

Initial Stakeholders Meeting June 13, 2006

St. Kitts and Nevis A Clean Energy Nation

The Federation Government has expressed its commitment to increasing the sustainability of the energy sector. Sustainability may be achieved through the diversification of electricity generation, increased use of renewable natural resources, increased energy efficiency and conservation, and improved transportation systems.

Who Is GSEII?

Global Sustainable Energy Islands Initiative Formed as an informal partnership in 2001 in response to St. Lucias commitment to become a sustainable energy demonstration country

Partners: OAS ESG The Climate Institute UNIDO UNF Partner countries

What is the history of SEP development in the Eastern Caribbean?

St. Lucia Prime Minister Kenny Anthony made first formal commitment at the Hague in 2000 St. Lucia SEP developed via a consultative process

St. Lucia SEP adopted by Cabinet in 2005

Dominica and Grenada SEPs prepared in 2003

Adopted as operational plans by Public Works (Energy) Ministries

SEP implementation in each of three countries

Why Should St. Kitts and Nevis Care about the Energy Sector?

High price of electricity Caused by:

total dependence on imported petroleum for electricity generationhigh price of petroleum (US$70+/barrel) Inefficiency of small diesel gen-sets

High maintenance requirements/poor reliability of small diesel gen-sets results in electricity outages Negative Environmental impacts associated with diesel powered generation

Goals for a Sustainable Energy Plan

Increased economic development

Reduce fossil fuel imports Increase development and use of domestic natural resources Increase local employment and energy sector opportunities Lower energy costs Attract technology transfer/foreign investment Local environment (improved tourism appeal) Global environment (mitigate climate change emissions)

Improved environmental protection

Defining a Course of Action

The Government of St. Kitts and Nevis, in collaboration with GSEII may prepare the way for Clean Energy Development through the development of a Sustainable Energy Plan

Articulate national goals and priorities for the energy sector Establish specific energy sector targets
Renewable energy utilization Energy efficiency/conservation

Articulate actions required to achieve the stated goals

Elements of a SEP

I.

Outline Current Energy Conditions

A. Legal Structure - Electricity

State run utilities control generation, transmission and distribution St. Kitts Electricity Department NEVLEC Limited or no opportunities for private power generation Regulated pricing (Current Prices?) Subsidies required to maintain affordable electricity? (Level of subsidies?)

I. Outline Current Energy Conditions, Cont.

B. Electricity Generation portfolio
Installed capacity Demand characteristics Key consumers (tourism, medical school, light industry, government, etc.) Projections for expansion

Summary of Generation Characteristics (July 2005)

St. Kitts Parameter Diesel units Installed capacity Electric efficiency Average load factor Fuel type Fuel cost Electricity price Nevis Unit

St. Kitts Electricity Department

7 33.5 40

Nevis Electricity Company (NEVLEC)

7 13.7 35 # MW %

0.73 Gasoil (diesel fuel) 0.42 0.169

0.74 Diesel fuel #2 0.49 0.19 US$/L US$/kWh

Projections for Demand Growth St. Kitts

Annual peak demand (MW)
50.0 40.0 30.0 20.0 10.0 0.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Year Base Min Max

[1] Source: Generation Expansion Plan (2005-2015), St. Kitts Electricity Department (2005)

Projections for Demand Growth Nevis

Annual Peak Demand (kW)

20000 15000 10000 5000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 year Base Min (-20%) Max (+20%)

I. Outline Current Energy Conditions, Cont.

Transportation Sector
Government purchase and sale of gasoline Cost of gasoline at the pump? Subsidies to maintain affordable gas prices? Transportation infrastructure plan? Average age of vehicle fleet? Organization of public transportation?

II. Establish SEP Energy Sector Targets

A. Electricity Sector Demand reductions (DSM; EE)
2011: Reduce demand by X%; X MW installed; X GWh generated 2016: Reduce demand by X%: X MW installed; X GWh generated

Renewable Energy Installations

2011: X MW (X% of projected demand) 2016: X MW (X% of projected demand)

GHG Emissions Reductions: X% reduction in diesel consumption/X% reduction in GHG (TOC)

II. Establish SEP Energy Sector Targets, Cont.

B. Transportation Sector Improve mileage efficiency of vehicle fleet by X% Improve/increase use of public sector transportation Produce locally, for transportation use, X gallons of ethanol Import hybrid vehicles, E85 vehicles and other alternative fueled vehicles as appropriate

III. Outline Potential Mix of Sustainable Energy Technologies

Grid-tied renewable energy alternatives Household and off-grid renewable energy alternatives Energy efficiency measures Transportation sector measures

Likely Near-Term Grid-tied Renewable Energy Alternatives

Geothermal power generation on Nevis

St. Kitts and Nevis participates in the GEF/UNEP sponsored Geo-Carabes Project Pre-Feasibility study (geology, geochemistry and prelim geophysics) suggests 10MW+ potential in the Bath/Farms Estate area

Likely Near-Term Grid-tied Renewable Energy Alternatives

Biomass to Energy on St. Kitts

Utilize sugar cane and municipal solid waste to produced ethanol and electricity Need to assess optimal utilization biomass
Sufficient feedstock for commercial production? Economical to revitalize sugarcane crop? Long term reliability of feedstocks? Potential for ethanol exports?

GSEII embarking on commercialstyle feasibility study to determine biomass to energy potential

Likely Near-Term Grid-tied Renewable Energy Alternatives

Wind, OTEC and others

Need site specific resource assessments to determine potential Wind broad analysis
Average wind speed = 6.18 m/s (10 m height) (St. Kitts) Average wind speed = 7.89 m/s (10 m height) (Nevis)

Likely Near-Term Distributed Renewable Energy Alternatives

The most obvious opportunity for households, hotels, other buildings is solar hot water heaters

Key opportunity to reduce energy consumption

Solar PV and distributed wind show promise for buildings

Possible interconnection to the grid (net metering)

Likely Energy Efficiency Alternatives

Improvements to electric utility system (example Dominica) Commercial and Household energy conservation/DSM Commercial and Household use of energy efficient appliances and lighting Implement EE standards and regulations Solar H20

Likely Transportation Sector Alternatives

Increase mileage efficiency Incorporate hybrid vehicles Use of ethanol as a 10% blend (standard vehicles) or high percentage (E85) blend in flex fuel vehicles Improvements in public transport system Increase alternatives for pedestrian and bicycle traffic (bike lanes)

IV. Potential Actions to Achieve Targets

Promotion of Grid-Tied Renewables

Liberalize electric utilities (including public private partnerships) Mandate Renewable Energy Technology Use
Renewable energy portfolio standard (require 1030% of installed capacity from renewables)

Attract private power developers for alterative energy solutions

Offer long-term PPAs Offer tax and other fiscal incentives

IV. Potential Actions to Achieve Targets

Promotion of Grid-Tied Renewables, Cont. Make firm commitments to key project opportunities (geothermal, biomass, etc.) Deliver on government responsibilities related to project developments (ie. Development of the sugarcane/feedstock supply, commit to long term PPAs, execute permits and licensing, etc.) Increase human capacity/awareness
Establish utility training programs Launch national education/awareness program

Seek international financing/resources for renewable energy feasibility and development (GEF, CDM, EU, World Bank)

IV. Potential Actions to Achieve Targets

Promotion of Distributed Renewables

National Solar Water Heating Initiative

National awareness initiative Tax relief for solar water heating system purchases Solar hot water heating loan program

Encourage solar PV system deployment Attract solar manufacturer/assembly plant investment

IV. Potential Actions to Achieve Targets

Promotion of Energy Efficiency Improvements

Compact fluorescent lightbulb program (Cuba or GSEII/Climate Care) Public buildings energy efficiency assessments and retrofits Initiate comprehensive capacity building initiative Catalyze the establishment of ESCOs Launch national DSM program Establish appliance and building norms and standards Create/promote hotel Green Globe Program

IV. Potential Actions to Achieve Targets

Cross-Cutting Electricity Sector Issues

Electricity system improvements Promote Climate Change/CDM strategy

IV. Potential Actions to Achieve Targets

Transportation Sector Reforms

Establish alternative fuel vehicle demo fleet Impose regulations for higher efficiency among vehicles Improvements in public transportation systems Modifications to roads/traffic patterns

V. Next Steps in the Development of a SEP

Complete assessment of current conditions by 23 June Stakeholder dialogue and individual consultations on priorities by 30 June Draft 1 of SEP by GSEII distributed to Stakeholders for review by 15 July Revisions thru to Final Draft by 1 Sept Submission to Cabinet for Consideration by 15 Sept

Contact Information

Mark Lambrides
mlambrides@oas.org +1-202-458-6261

Kevin de Cuba
kdecuba@oas.org +1-202-458-

Maria Rivera
maria@energyandssecurity.com +1-703-

Thank You!