Energizing the Caribbean Hotel Industry

Presented by: Gail Henry

Sustainable Tourism Product Specialist, Caribbean Tourism Organization

World Tourism Day 27 th September, 2012 Barbados

PRESENTATION FOCUS
ENERGY EFFICIENCY AND RENEWABALE ENERGY ENERGY USE IN THE HOTEL SECTOR CARIBBEAN HOTEL ENERGY EFFICIENCY ACTION PROGRAMME MAJOR FINDINGS RECOMMENDATIONS

GLOBAL ENERGY DEMAND

As economies expand and the world population continues to grow, energy demand is increasing worldwide. Currently, 80% of the world energy supply comes from fossil fuels (coal, petrol and natural gas) which emit greenhouse gases causing climate change and other negative environmental impacts. Fossil fuels are finite and non-renewable, and their reserves are decreasing faster than new ones are being formed.
(Source: Hotel Energy Solutions)

HOTEL ENERGY CONSUMPTION

Energy consumption by hotels has a major environmental impact. Hotels are among the top five types of buildings in the service sector for energy consumption.. It is now internationally recognised that the world must dramatically reduce greenhouse gas emissions by decreasing its use of fossil fuels. The hotel sector can contribute by becoming more energy efficient and increasing its use of renewable energy technologies
(Source: Hotel Energy Solutions)

ENERGY USE IN THE HOTEL SECTOR

ENERGY EFFICIENCY
using less energy to perform the same tasks and functions

RENEWABLE ENERGYY
Energy which comes from natural resources such as sunlight, wind, rain, tides, and geothermal heat, which are renewable (naturally replenished). About 16% of global final energy consumption comes from renewables, with 10% coming from traditional biomass, which is mainly used for heating, and 3.4% from hydroelectricity. New renewables (small hydro, modern biomass, wind, solar, geothermal, and biofuels) accounted for another 3% and are growing very rapidly.

Saves energy
Lowers operational costs Reduces carbon emissions/footprint

Increases competitiveness

CARBON EMISSIONS
Anthropogenic carbon dioxide (CO2) emissions (i.e., emissions produced by human activities) come from combustion of carbon based fuels, principally wood, coal, oil, and natural gas.

CHENACT OBJECTIVE
To encourage and coordinate on the regional level the implementation of Energy Efficiency (EE) and Renewable Energy (RE) practices in the Caribbean hotel sector.

DIRECT BENEFICIARIES
PHASE 1
Barbados case study pilot country OECS countries: St. Lucia Grenada Antigua St. Vincent & Grenadines St. Kitts & Nevis Other: Jamaica Dominican Republic Trinidad & Tobago

PHASE 2
Barbados follow-up to case study Jamaica pilot country The Bahamas - pilot country

Others

CHENACT COMPONENTS
Institutional strengthening 5 training workshops and/or conference sessions 20 presentations at tourism and energy conferences Barbados Case Study 36 detailed energy audits, 30 walk through energy assessments (64% of all licensed hotels in Barbados), additional 12 audits (GIZ) Electricity efficiency index for (<50, 51-100, 101-200, >200 room hotels) Estimates of total electricity consumption and carbon footprint of Barbados hotel sector

Assessment of financing sources for hotel energy investment, including input to SMART Energy Fund design, cash flow model, support to 6 hotels financing plans

CHENACT COMPONENTS
Barbados Case Study (continued) Hotel Clean Energy Policy Support to pilot PV hotel demonstration (specifications, selection criteria, procurement document, proposal review) Summary of impact of Barbados hotel EE program

Action Plan to implement CHENACT in Barbados (and region)

Energy Performance Contracting for Caribbean Hotel Sector Analysis of contracting models (shared savings, guaranteed saving, power purchase agreement, leasing/lease-purchasing)

Benefits and pitfalls of performance contracting

Profile of Caribbean energy services industry Caribbean hotel energy performance contracting market Caribbean hotel ESCO development strategy

CHENACT ACCOMPLISHMENTS
Caribbean Regional Hotel CDM Program of Activity (PoA) Analysis of carbon offsets and trading markets Analysis of Clean Development Mechanism (CDM) for building EE projects Analysis of applicable CDM methodologies

Description of sample CDM Program Activity (CPA) and steps to creating a Caribbean regional hotel EE PoA Model Hotel Clean Energy Program for the Caribbean Profile of Caribbean hotel industry and electricity consumption
Extrapolation of EE and carbon reduction potential Analysis of benefits and costs of EE investment program Analysis of the Caribbean EE market Analysis of barriers to investment in hotel EE

CHENACT COMPONNTS
CHENACT Communication Strategy Caribbean hotel EE case studies and technology factsheets Content for CHENACT website Recommendations for communications messages and channels Recommended communications activities for CHENACT counterparts and stakeholders

ENERGY USE IN THE HOTEL SECTOR - A Global Perspective

40% of the energy used by hotels is electricity 60% comes is from natural gas and oil

75% of this energy is used for: Space heating Hot water production Air conditioning and ventilation Lighting

Overall Electricity Consumption by End-Use - Barbados

Electricity Consumption by End-Use for Different Sized Hotels in Barbados

Average Electricity Expenditure for Barbados Hotels

1,600,000 1,400,000 Annual Electricity Cost Per Hotel (US$) 1,200,000 1,000,000 800,000 600,000 $1,514,609

$695,005

$469,984
400,000 200,000 <=50 51-100 101-200 Hotel Size (# of Guestrooms) >200 $175,679

SUMMARY OF CHENACT FINDINGS

CHENACT is a energy and climate change project in the tourism sector that introduced new concepts to its principal counterparts (e.g., EE/RE technologies, performance contracting, CDM) There is considerable variation in the EE index among similar sized hotel properties, particularly for small hotels (<50 rooms) Air-conditioning and lighting together account for approximately two-thirds of total electricity use in Caribbean hotels EE projects would reduce electricity consumption by 20-30%, and would yield net savings of $280,000 to $975,000 over 7 year period for small hotels (<50 rooms) to large hotels (>200 rooms), respectively. IRR depends highly dependent on electricity tariff: 7% for 0.09 $/kWh vs.232% for 0.40 $/kWh

SUMMARY OF CHENACT FINDINGS

Despite high and rising cost of electricity, investments in costeffective EE projects remain a challenge for Barbados hotels. A hotel clean energy policy framework includes initiatives by multiple sectors and entities (e.g., tourism, environment, energy, utility regulation, building and planning authorities, finance, customs). Over 835,000 tons of CO2e could be reduced annually from hotel EE, however a CDM Program of Activities will initially be limited to a few countries with Designated National Authorities. Realizing the potential value of hotel EE investments will require an integrated approach that includes scope of investment, analysis, technologies, financing, installation, and performance related services.

Thank you for your attention.