Latin American and the Caribbean Energy Efficiency Program

PALCEE

THE SUSTAINABILITY OF ENERGY EFFICIENCY:
LATIN AMERICA AND THE CARIBBEAN ENERGY EFFICIENCY PROGRAM PALCEE

JULY, 2013

EL SALVADOR

GRENADA

JAMAICA

NICARAGUA

This document was published in the administration of:: Victorio Oxilia Davalos Executive Secretary of OLADE Nestor Luna Gonzalez Director of Studies and Projects Erika Garcia Energy Efficiency Specialist

The authors of the present document are: Mentor Poveda, MSEE - OLADE Consultant; and, Erika Garcia - OLADE

The utilization of the information contained in this document is authorized to use with the condition of citing the source.

THE SUSTAINABILITY OF ENERGY EFFICIENCY: PALCEE PROJECT

Executive Summary
With the financial support of the Austrian Development Cooperation (ADA, German), OLADE carried out the PALCEE Project (Latin American and The Caribbean Energy Efficiency Program), which has the primary objective of strengthening the institutional framework for the development of energy efficiency, and gathering and organizing the efforts that various institutions make in a specific country. Its goal is to incorporate energy efficiency in national plans and convert the programs into long-term efforts, providing them sustainability that has been absent from the efforts made by the majority of Latin American and The Caribbean countries.

The project has thoroughly and successfully completed all the planned objectives. The four participating countries (El Salvador, Grenada, Jamaica, and Nicaragua) have implemented project recommendations, completing the objective of strengthen the energy efficiency institutional framework in each one of them, thanks in large part to the political commitment of the sector’s national authorities in all countries directly benefiting from the project.

In those cases where the same institutional framework of the energy sector is weak, completion of this project’s objectives contributed to its strengthening in benefit of the entire energy sector. This is made possible by the receptiveness to efficiency from authorities and other important actors of the society.

With that base, the project has confirmed one of the primary hypotheses laid out during its design: international institutions of cooperation must consider that, beyond concrete projects of energy efficiency, it’s necessary to support the strengthening of

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the energy efficiency institutional framework in the beneficiary countries, as a means to achieve indispensable sustainability for the programs being implemented.

Another achievement of the project was allowing the programs of energy efficiency in under implementation, some of them with international financing and cooperation, to obtain the required coordination with coherent guidelines and a long-term vision, through the institution responsible for energy efficiency as the most appropriate to complete this task.

On top of that, implementing the selected recommendations derived from energy audits, through demonstrative projects, permitted to present concrete results, beyond the saving potentials that are results of the audits.

The incorporation of the participants in the theoretical training of energy audits, and in the implementation of recommended measures, permitted achieving a theoretical practical training that produced strong lessons in each one of them.

In summary, the project has contributed to the creation of favorable institutional conditions to generate and implement national programs of energy efficiency, following a criterion of sustainability, with the possibility of promoting an internal process of feedback and continued improvement of the programs.

The institutional oriented proposals have been implemented and have achieved a strong commitment from diverse local actors, placing the national energy authority in the center of that consensus or institutional agreement. It has fortified the capacities of the institutions through the training of officials responsible for national programs. Furthermore, undertaking energy audits and the implementation of their recommendations allowed the training of local professionals, providing also training in the coordination of these demonstrative projects from the responsible institution. The responsibility of the new national institutions and OLADE will be sharing successful experiences with other countries in the region.

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Contenido
Exxecutive Summary 1. Introduction 2. State of Energy Efficiency in Latin Anerica and the Caribbean 3. Commitment and Role of Olade 4. The PALCEE project iii 1 3 6 8

Precursos 8 Objectives 9 Organization 10 Method of Cooperation 11

Participating Countries

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El Salvador Description of the Country Description of the Energy Sector Institutionalism of the Energy Sector

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Grenada 16 Description of the Country 16 Description of the Energy Sector 16 Institutionalism of the Energy Sector 18

Jamaica 20 Description of the Country 20 Description of the Energy Sector 20 Institutionalism of the Energy Sector 22

Nicaragua 23 Description of the Country 23 Description of the Energy Sector 23 Institutionalism of the Energy Sector 25

Proposal of the institutional framework in the participating cuntries.

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El Salvador 27 Grenada 29 Jamaica 32 Nicaragua 34

5. Results achieved 38 Training of personnel from the institutions responsible for energy efficiency 39 Results by Country 41 El Salvador 41 Grenada 46 Jamaica 49 Nicaragua 51

6.

Lessons Learned

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Bibliography 57

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1. Introduction

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he incorporation of energy efficiency means maintaining the same service with better standards of quality and security in the energy supply. This implies reducing the losses produced during the entire transformation or process, through the implementation of better technologies; promoting, at the same time, better energy usage habits, with the goal of supporting and making technological changes possible.

This means the effort consists of going above and beyond, not only maintaining already present energy services, but doubling the benefits with half the consumption, as shown in multiple examples in the publication, “Factor 4” (Weizsäcker, Lovins, & Lovins, 1997).

When dealing with energy efficiency, two large groups of efforts stand out, directed at the supply side (SSM – Supply-Side Management) and at the demand-side (DSM – Demand-Side Management).

Traditionally, the demand side represents an enormous challenge to the energy sector. It requires more detailed work as the answer depends on the decision of hundreds of thousands of users, and not on a few companies, as is the case of supply efficiency.

Energy conservation, which is the primary principal of efficiency policies from the demand-side, has grown in application for various years in Europe, North America, Japan, and various developing countries, with new efficient technologies.

It is necessary to mention that the incorporation of technology implicates the necessity to make investments to achieve greater levels of efficiency; fortunately, those investments are profitable. From there, the importance of energy efficiency as its incorporation, in addition to generating economic benefits, assists in the reduction of global warming, because the less energy used, the less production of contaminants originating from the energy sector.

The profitability of implementing energy efficiency programs will be greater as the prices of energy increase. From there the importance to consider real prices so that clients decide to incorporate efficient equipment in their installations and to maintain programs of energy conservation.

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Energy efficiency’s contribution to the reduction of energy supply makes it considered a resource. This new source, with important advantages regarding the traditional supply methods as it is more economical to introduce, is available in every country as a local resource. It contributes to the reduction of greenhouse gasses and has an additional advantage of influencing equality.

Latin America, at the moment, has a high share of renewable resources, given that 25% of the supply comes from those resources; therefore, the task facing the region is the strengthening of energy efficiency.

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2. State of Energy Efficiency in Latin America and the Caribbean

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o obtain satisfactory results in the application of energy efficiency in a country, sustained and continuous work is necessary so that the achievements obtained increase and allow continue production of results.

The implementation of an energy efficiency program resembles a steps structure, meaning the second step supports itself on the bases established by the first step, successively continuing so. For this reason, it is indispensable to ensure that the results of the first program are permanent, so that its achievements do not disappear when beginning successive programs; whereas, in contrast, the programs that come after produce added benefits to those prior, fortifying the results. In Latin America and the Caribbean, the efforts toward energy efficiency have been, in large part, situational and reactive. They have been stimulated by the supply crisis that periodically used to appear in our countries. This would not be a problem if they would maintain the efforts after the emergency passed; unfortunately, they are not sustained and, on the contrary, they lose importance, being relegated to a secondary priority. What is more, the international organizations of cooperation have propelled innumerable projects with positive results and have not managed to have a follow up after finishing the technical and financial assistance. Furthermore, it produces the effect of different institutions working on various isolated aspects, without coherence or coordination. One of the key aspects not addressed in the proper dimension in the sector is institutional framework as an imperious necessity to provide indispensable sustainability to all of the projects and initiatives of energy efficiency. This occurs because all actors are urged to provide results as a contribution to mitigate climate change; however, in the case of energy efficiency, only the permanent results allow energy efficiency to be considered as a resource. In Latin America and the Caribbean, and in each sub-region, Fig. 2.1, the evolution of energy intensity shows downward tendencies in the twenty years in which the world has worked to improve energy efficiency. Mexico’s results, in the regional context, stick out as having a low value in 1990; nonetheless, it has an even lower value in 2011. That drop, for its relative size, influences the entire region. However, it is clear that the declination of energy intensity, in general, is not from

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specific efforts, but from the importation of higher efficiency equipment as a result of regulations and rules in industrialized countries from where the majority of electrical appliances in the region originate.

Source: Energy Economic Information System (SIEE) of OLADE.

Figure 2.1. Energy intensity by sub-region

The case of Mexico is especially interesting for the presence of a decentralized body, operating since 1989, with the institutional responsibility of developing energy efficiency. The National Commission for the Efficient Use of Energy (CONUEE), created on the basis of the National Commission for Energy Savings (CONAE), has been an important factor in the results observed in Mexico (Limaye, Heffner, & Sarkar, 2008).

What happens in Mexico confirms the importance of energy efficiency agencies in Europe, where the majority of countries maintain a specialized office for the topic, being the region with the greatest commitment and with the best results. This, furthermore, supports the commitment that the European Union has established for year 2020 to have energy efficiency with 20% of the primary energy it needs for its supply.

It is also worth pointing out that the autonomy of energy efficiency agencies is especially interesting in the countries of the region; similar to what the Mexican experience shows, where the CONUEE, despite being a dependent of the Secretariat of Energy, exhibits an image of independence to the public that allows it to

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release recommendations with structured lines, that are admitted because of their technical nature.

The importance of institutionalism in energy efficiency has also been highlighted by the International Energy Agency (IEA), when it published a manual of governance (International Energy Agency, 2010), based on previous studies, among which it highlighted that of the World Bank, published in 2008 (Limaye, Heffner, & Sarkar, 2008).

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3. Commitment and Role of OLADE

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he Lima Agreement, as an international judiciary instrument and constitutive of OLADE, establishes, among the organization’s other objectives, the conservation of natural resources of its Member Countries. In compliance with this objective, it has put emphasis on the development of energy efficiency in all of Latin America and the Caribbean.

Given that OLADE is intergovernmental and, furthermore, its relations with Member Countries is through the Ministries of Energy, exactly where energy efficiency institution should be supported, it places the Organization in a suitable position to contribute to the topic, as its contribution toward greater sustainability of the national energy efficiency programs that are developing in Latin America and the Caribbean.

Before sectorial reforms, the region had incipient energy efficiency development; in this aspect, the opening of electrical energy markets and the vertical disintegration, with the evidence of disaggregated costs in an international framework that seeks greater commitments to the environment on the global, regional, and national scale, have brought negative and positive consequences, as explained later.

The incorporation of private utilities in generation has lead to a natural interest in improving the efficiency of energy production; furthermore, with the reforms, the subsidies to end users were identified in a more precise way and, in some cases, they tended to disappear or were implemented in a direct and enclosed way. Additionally, the increase of capital and operational costs in the entire chain of the energy industry (more efficient equipment but with a greater initial investment, more expensive fossil fuels, production processes that incorporate or internalize environmental costs) press costs and, therefore, the remuneration for the compensation of services. With it, the tariff adjustments, in some cases, have contributed to consumers having correct price indicators to interest and motivate them toward the implementation of energy efficiency, a necessary although insufficient indicator.

At the same time, state owned utilities have a close reference of the needs and prices established by natural profitability that private companies require, for which conditions have also changed in these companies.

On the other hand, the sector’s new structure is characterized by an increase in the number of actors that, as a result, disperses the responsibility of energy efficiency development, if it is not assumed by the state. Furthermore, efficiency shows clear benefits for the vertically integrated companies; while in contrast, benefits are vague for the private producers and transmission companies. In particular, the efficiency

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improvement on the demand side capable of delaying new investments is a benefit for the society and not for the individual producer.

Distribution companies that changed ownership must strengthen their position, facing urgent problems for their share-holders: the improvement of revenue, reduction of technical and non-technical losses, among others, where the energy efficiency on the demand-side had a very low priority for the company’s plans, when there was some interest in the topic.

Once the problems pointed out are overcome, the time has arrived to put greater attention on distribution systems, a sector that, for the magnitude of losses, needs energy efficiency to be included.

In other words, development of energy efficiency in the region was affected and only subsisted in a few countries that had solid institutions responsible of the execution of energy efficiency programs. (OLADE: Poveda, Mentor, 2007).

In the context described and with the motivations explained appears the Latin America and the Caribbean Energy Efficiency Program, PALCEE of OLADE, whose primary objective is to strengthen the energy efficiency institutional framework as a way to bestow sustainability to national programs.

The task of finding the financing for a program of this nature turned out to be difficult, due to the urgency of international cooperation to produce results that justify to their donors the investments that they make and, also, due to the implicit difficulties in facing the development of institutional framework.

Austrian Technical Cooperation understood that OLADE is the institution best prepared to meet this challenge and decided to finance the program in its first phase.

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4. The PALCEE Project
Precursors

The economic development of Latin America and the Caribbean countries requires the contribution of energy as a major factor to promote it. This is how energy demand increases with elevated rates that obligate dedicating a very important portion of national economic resources to the infrastructure projects the sector needs. The dependence on petroleum, in an environment of increasing prices, obligates dedicating steadily higher percentages of the national budget to the importation of fuels. An important contribution that Latin America and the Caribbean can make toward mitigating climate change is through the introduction of clean energy to the energy sector. Among the resources the region possesses, hydroelectricity stands out as a renewable energy, despite that it has been exploited only 22% of the existing potential. The incorporation of energy efficiency must have the same importance; however, until now this has been an occasional resource as they only remember it when there is an emergency, to the extent that it has not had a real influence on energy demand. Additionally, energy efficiency influences equality, reducing the receipt of energy by an important percentage in poor communities more than anywhere. In Latin America and the Caribbean, institutions have worried too much about the urgency of reducing emissions and have incentivized efforts oriented solely at the introduction of energy efficiency measures, with little interest in the necessary sustainability of the programs. Sustainability requires institutionalizing energy efficiency in the counties, as only the long-term efforts can maintain the reduced levels of energy consumption, in order to turn efficiency into a resource, taken into account in energy planning, and utilized in the energy supply. The key objective is achieving sustainability in national programs of energy efficiency through the development of institutional framework specific to each one of the countries where they propose to develop the Latin America and the Caribbean Energy Efficiency Program (PALCEE). It involves introducing an institutional framework that allows converting reactive, conjectural, short-term efforts into long-term activities, as is required by a solid energy efficiency development. None of the institutions of cooperation, or technical or multilateral assistance that work in the region are facing this problem, since it is difficult aspect to handle. However, we believe that OLADE, given its intergovernmental nature and its work environment with the Ministries of Energy, has the elements to face this challenge. The efforts made by institutions give attention to a single final use, or one them in

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particular; none is oriented to coordinate and give coherence to individual programs. The project does not interfere with any of the programs in execution; on the contrary, it seeks to give support to all of the isolated efforts that diverse agencies and institutions undertake, providing the institutional framework that establishes general regulations and national rules, coordinates a comprehensive national program, generates the continuation of savings and increases them, with a foundation of continued efforts over the long term. Only through a sustained program of energy efficiency will it be possible to reduce the energy bills of families that, for the poorest sectors, represent a substantial amount of their income and, at the same time, free part of the financial resources that countries dedicate to energy infrastructure so that they can raise the coverage of service.

Objectives

With the valuable financial support of the Austrian Development Cooperation (ADA), was implemented the PALCEE project (Latin America and the Caribbean Energy Efficiency Program). The project’s primary objective is to reinforce the institutional framework in some countries in the region, in order to develop energy efficiency, grouping and organizing the activities that various institutions undertake, with the goal of incorporating them into national plans and converting them into long-term activities, providing them sustainability that has been absent in the efforts carried out by the majority of Latin America and the Caribbean countries. The strengthening of energy efficiency institutional framework includes the institution in charge of orienting and directing energy efficiency programs at the national level, with its structure and organization; as well as the laws and regulations that permit establishing national plans, from their conception through the evaluation of their results. The program included, in its first stage, two Central American countries, El Salvador and Nicaragua, and two from the Caribbean, Jamaica and Grenada, obtaining the bolstering of the responsible institution in charge of orienting and directing energy efficiency programs at the national level, with the goal of achieving savings from sustainable energy, so that investment needs in the energy sector would be postponed, improving the country’s finances and reducing the emissions of CO2. In addition, they organized activities that motivate the efforts of the institution responsible for energy efficiency in the country and, at the same time training the professionals in charge of administering the institution responsible for energy efficiency, as well as those tasked with implementing the efforts that the programs integrate.

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Organization

The strategy to provide sustainability to energy efficiency efforts in the member countries, through PALCEE, include efforts that would produce results of emissions and energy consumption reductions, but above all, they will serve as an effective means for practical training of professionals in charge of administrating the programs and for implementation of concrete actions in the consumption sector, in each one of the countries. There are three focal groups of activities that, together, will permit the development of sufficiently strong national programs • Strengthening the institutional framework that supports efficiency in the countries, with the goal of achieving sustainability needed to establish the programs, so that the impact of the measures produces significant results. • The training of professionals that will form part of the institution responsible for energy efficiency in the country and of those tasked with carrying out specific, planned efforts in each one of the programs, for which they need the training in program management as well as in the implementation of measures. • Execution of the programs that will form part of the activities of the institution responsible for energy efficiency, in diverse areas, for the practical training of local professionals in program management and in the implementation of measures; furthermore, they allow the actors to verify the benefits of implementation of energy efficiency and serve as an example of how to undertake them, from the technological as well as financial point of views. Organization of the project is illustrated in Fig. 4.1, in order to show the relations between the diverse activities carried out.

Figure 4.1. Relations between project activities

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Method of Cooperation

The project has been spread in the entire region through presentations from OLADE officials, awakening interest on behalf of the countries that lack energy efficiency institutions. By incorporating PALCEE as a national program, it has developed a methodology of implementation. • Commitment from the authorities.- the authorities in charge of the country’s energy sector must commit human resources designated to the implementation of PALCEE and the monitoring of the efforts undertaken. • Diagnostic and proposals.- it will carry out an analysis of the country’s energy sector in order to generate a preliminary proposal of the institutional framework for energy efficiency. • National workshop.- it will generate discussion among all actors of the energy sector in order to present a preliminary proposal; once discussed, it will generate a final proposal that will be agreed upon among the authorities and the stakeholders. • Training.- it will provide knowledge, through internships in member countries of OLADE with necessary experience of these topics, in the administrative management of national programs of energy efficiency for the professional personnel in charge of the project. Additionally, it will provide technical knowledge for the implementation of energy efficiency measures to professionals that work in the consumption sector of the country. • Demonstrative projects.- they will implement tangible projects that show the economic, environmental, and social benefits of expanded efforts of energy efficiency in the country’s consumption sectors, taking advantage of them for the practical training of professionals interested in the implementation. • Evaluations.- they will carry out technical evaluations of the demonstrative projects to corroborate the sustainable benefits generated in the application of energy efficiency, in all the country’s consumption sectors.

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Participating Countries
he first phase of PALCEE developed with the financial support of the Austrian Development Agency (ADA). It includes four member countries of OLADE, two from Central America, El Salvador and Nicaragua, and two from the Caribbean, Grenada and Jamaica. The selection of these took place on the basis of existing information in OLADE, establishing a classification regarding the advancement of energy efficiency in member countries, utilizing the following parameters: existence of a specialized institution, of a specific law, of projects under implementation, of energy service companies (ESCOs), of financing of efficiency efforts, and of a market of efficient appliances and labeling. The information presented for each one of the countries participating in the project came from the Energy Economic Information System of OLADE, corresponding to the year 2012, unless another date is specifically shown.

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EL SALVADOR GRENADA

JAMAICA NICARAGUA

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El Salvador
Description of the country

This Member Country of OLADE is the smallest and most densely populated in Central America, with 20,742 km2 and approximately 6 million 254 thousand inhabitants. It is the only Central American country that does not have coast on the Caribbean Sea; it shares the Fonseca Golf with Nicaragua and Honduras, a country with which it borders to the north and east, while to the west it borders Guatemala. It’s economy is based on agriculture export products (coffee, cotton, corn, sugar cane), where coffee represents 50% of its exports, even though industrial production (food, textiles, clothing, chemicals) has expanded in the previous years. The GDP per capita is 3,040 USD.

Description of the energy sector

El Salvador has primary energy coming from hydrology, geothermal resources, vegetable residues (firewood and sugar-cane bagasse), and petroleum imports. In 2012, the share of energy in the national supply requires a portion of 30% petroleum, as detailed in Fig. 4.2.

Source: Energy Economic Information System, SIEE of OLADE.

Figure 4.2. Share of primary energy, 2012

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In El Salvador, the process of modernization, economic growth, the urbanization, demographic growth, and the steadily increasing access of population groups to public services, increased the consumption of electrical energy and petroleum derivatives. The relation between the use of energy and the Gross Domestic Product (GDP) shows a strong correlation, which indicates the evolution of the economy, measured by GDP, is very similar to that of energy for the period, as shown in Fig. 4.3.

Source: “Energy Policy of El Salvador 2010-2024”, CNE.

Figure 4.3. Relation between energy use (kTOE, and the GDP of current prices (millions of USD)

El Salvador is a country with greatest geothermal energy production of Central America. The total installed capacity, in 2011, was 1,477 MW, in accordance with the distribution shown in Table 4.1.

Source: SIGET 2011

The energy sector structure

In 1996, it completed a deep reform to the electricity sector, defined in the General

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Law of Electricity. The reasons to introduce these new rules that would regulate “the activities of production, transmission, distribution, and commercialization of electrical energy” are described in the provisions of said law. National Energy Council (CNE, Spanish) At the heart of the crisis of petroleum prices in the international market, in July of 2005, was formed the National Emergency Committee to Address High Oil Prices, with the purpose of analyzing and promoting measures to minimize said impact. This committee, which included the participation of public and private sectors, promoted the start-up of punctual efforts, among them, the establishment of staggered work schedules to reduce vehicle traffic, which is still active to date. Less than a year after the creation of this committee, was recognized the necessity of expanding its scope of effort, in order to study the energy theme in all of its dimensions. That is how, in July of 2006, the President of the Republic made the National Energy Council (CNE) a permanent body as ad honorem representation, with the objective of proposing, managing, and collaborate with other institutions to the definition of energy strategies that contribute to the socio-economic development of the country, in harmony with the environment. On August 30, 2007, the El Salvadorian Congress released legislative decree No. 404, concerning the Incorporation Act of the National Energy Council (CNE), sanctioned by the President of the Republic on September 18 of that year. The CNE, presided over by the Director of the Ministry of Economy (MINEC), “will be the highest, governing, and regulatory authority in matters of policy and strategy that promote efficient development of the energy sector”. The goal of the council’s creation is the establishment of strategic policies that promote efficient development of the energy sector, guaranteeing citizens the sale of essential services to the community, as well as incentivizing the good use and rational consumption of energy sources. For that reason, the CNE will work to design the guidelines for integral development of the National Energy Policy. The objective of this effort is to develop a policy that strengthens the energy sector, trade, and investment, respecting free competition and the environment, as well as to implement a policy that facilitates the development of the standard of living of Salvadorians and promoting the rational use of energy, optimization of infrastructure, increased rural electrical coverage, and regional integration. These are the general guidelines to develop in the National Energy Plan:

a. Analysis of the evolution of energy demand and its coverage over the long term. b. To promote development of renewable energy sources. c. To create programs of energy efficiency.

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d. Regional energy standardization. e. Establishment of subsidy policies in the energy sector. In this way, one of the primary objectives of the CNE is “to promote the rational use of energy and all efforts necessary to develop and expand renewable energy resources, taking into account policies of environmental protection, issued by the competent body”.

Grenada

Description of the country

It forms part of the West Indies and is an island country with 344 km2, located in the far south of the Lesser Antilles, 160 km north of the Venezuelan coast. It is one of the OLADE Member Countries that form part of the English-speaking Caribbean. It has a population of 105 thousand inhabitants, with a GDP per capita of 6,483 USD. The primary economic activities are agriculture (nutmeg, banana, cacao, citrus, avocado, corn, and vegetables) and tourism, with a growing share of fishing and agroindustry (food and beverage). Tourism has received strong government support through the improvements of airport facilities and the numerous visits from cruise ships through the Caribbean.

Description of the energy sector

In Grenada, practically all electricity is generated by imported diesel. They use firewo-

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od primarily to cook in residential and rural zones. Solar energy is used for water heaters in hospitals and residences. There is a wind energy installation that began operation in March of 2007, in a hotel complex, in the southeast part of the country.

Source: Energy Economic Information System, SIEE of OLADE.

FigurE 4.4. Total supply of energy

The energy intensity of Grenada in 2012 is 0.81 BOE / 103 USD (2005) GDP, which represents the quantity of energy consumed for each unit of GDP produced. The final energy consumption per inhabitant was 4.62 BOE, a decrease of 2.53% compared to 2011. The electricity consumption per capita in the year 2012, including all sectors, reached 1,699 kWh/inhab. This decreased by 1.35% compared to 2011. Energy intensity has remained without considerable net fluctuations since 1990, as shown in Fig. 4.5.

Source: Energy Economic Information System, SIEE of OLADE.

Figure 4.5. Evolution of energy intensity in Grenada

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The energy sector structure

The Ministry of Finance and Energy is in charge of all activities related to the energy sector. The administrative head of the Ministry is the Permanent Secretary. The ministry is divided into the following departments:

− Administration − Account General’s Department − Inland Revenue Department − Department of Customs and Excise − Department of Economic Management and Planning − Statistics Department − Economic and Technical Cooperation − Department of Energy and Sustainable Development − Department of Cooperatives

The end goal of the National Energy Policy of Grenada (GNEP) is to ensure access and provide affordable, equitable, reliable, clean and sustainable energy sources and services in order to encourage and secure national development and improve the quality of life for all its citizens.

The National Energy Policy is based on six basic objectives.

• Safeguard energy security • Achieve energy independence • Maximize energy efficiency • Promote energy conservation • Achieve environmental sustainability through “green energy” and • Reduce the costs of energy to a minimum

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The government of Grenada put into action an energy conservation program of the public sector at the beginning of 2010 and has accumulated reference data regarding the energy consumption at the ministry level.

The Labor Group for Energy Development establishes, as an objective, the reduction of energy consumption (electricity and transport) by 10% in the last trimester of 2012 (with 2009 as a reference year).

According to the Labor Group for Energy Development, the government must increase its capacity to implement the National Energy Policy (NEP)

One of the recommendations of Grenada’s NEP is to transform the Energy Division into the National Sustainable Energy Office, with a structure shown in Figure 4.6.

Figure 4.6. Desired structure for the Office of Sustainable Development

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Jamaica

Description of the country

It is one of the OLADE Member Countries of the English-speaking Caribbean, whose economy depends on mining and tourism. Exports of bauxite and aluminum compete with revenues from tourism that exploits their beautiful beaches and local hotel facilities. The GDP per capita is 4,049 USD.

Jamaica being one of the primary producers of aluminum and bauxite, mining represents hardly a tenth of the domestic product and accounts for a small fraction of employment. They also produce glass containers, taking advantage of local quartz.

Manufacturing represents only a sixth of domestic product and less than a tenth of national employment, in order to produce processed foods (foods, beverages, and tobaccos), textiles, machinery, and metal products .

Description of the energy sector

Jamaica’s energy matrix is based on the importation of fossil fuels. This country currently consumes some 60,000 barrels of petroleum per day, 95% of which they import. This strong dependence is one of the primary problems Jamaica faces with significant impacts; it is vulnerable to the volatility of prices and other external factors. Due to the lack of national refining capacity, they import more than 50% of petroleum derivatives.

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Source: Energy Economic Information System, SIEE of OLADE.

Figure 4.7. Primary energy in the energy supply

Energy intensity in Jamaica reached 1.48 BOE / 103 USD (2005) GDP, which represents the quantity of energy consumed for each unit of gross domestic product produced. The final energy consumption per inhabitant was 8.35 BOE/inhab., an increase of 2.68% compared to 2011. The electricity consumption per capita in the year 2012, including all sectors, reached 1,646 kWh/inhab. This indicator dropped by 12.11% compared to 2011. The evolution of energy intensity shows a small reduction in the 20 years presented in Fig 4.8.

Source: Energy Economic Information System, SIEE of OLADE.

Figure 4.8. Energy intensity in Jamaica

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The energy sector structure

The Ministry of Science, Technology, Energy, and Mining (MSTEM) has the mission of promoting the creation and application of policies, investigation, and development in energy and mining sectors for a national, sustainable transformation. The MSTEM has recognized that paying for energy imports in the country can be reduced by a combination of energy efficiency practices and renewable energy technologies. The MSTEM has promoted these concepts through public education programs, including: − coordinating program discussions in education and community institutions; − spreading information in the media; − distributing pamphlets with advice on saving energy, and − Distributing a manual of energy savings. Jamaica’s Energy Policy has been developed since 1995 through different documents and strategies, with themes related with energy conservation and energy efficiency. The MSTEM released, in October of 2010, a document titles: “National Energy Conservation and Efficiency Policy 2010-2013. Securing Jamaica’s Energy Future.” The document aligned with the objectives of the National Energy Policy in energy conservation and energy efficiency. The savings and efficiency of energy will play a fundamental role in addressing energy security, and the environmental and economic challenges that Jamaica faces. The National Energy Conservation and Efficiency Policy establishes strategies and efforts that can result in increased efficiency of the energy sector in the production, transmission, and distribution of electrical energy, in the use of energy in the transportation sector, and in the consumption of electricity by industrial, commercial, and residential consumers. The document presents four objectives and includes key efforts and strategies:

• Households and businesses aggressively and continuously adopt energy conservation and efficiency practices towards reducing Jamaica’s carbon footprint. • An enabling environment buttressed by dynamic legislation and regulations

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that facilitates the promotion of energy conservation and efficiency. • The Government of Jamaica is the leader in energy conservation and efficiency and sets the standard for all other sectors. • Jamaica has modern and efficient energy plants

Nicaragua

Description of the country

This Central American country has an area of 130,373 km2, with 6 million inhabitants situated between Honduras to the north, and Costa Rica to the south; meanwhile, to the east is the Caribbean Sea, and to the West is the Pacific Ocean. The capital city, Managua, represents approximately fifty percent of the country’s population. Its economy fundamentally depends on agriculture as its industry is little developed. Agriculture, fishing, and wood are the primary activities that occupy two fifths of the active population and produce a quarter of the gross domestic product. It has a GDP per capita of 1,355 USD.

Description of the energy sector

Nicaragua has primary energy from hydro resources, geothermal resources, vegetable residues (firewood and sugarcane bagasse), and petroleum imports. Figure 4.9 shows the share of these resources in the year 2012.

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Source: Energy Economic Information System, SIEE of OLADE.

Figure 4.9. Share of primary energy in the supply

Energy intensity in Nicaragua reached 1.96 BOE / 103 USD (2005) GDP, which represents the quantity of energy consumed for each unit of gross domestic product produced. The final energy consumption per inhabitant was 2.65 BOE/inhab., suffering a decrease of 3% compared to 2011. The electricity consumption per capita in the year 2012, including all sectors, reached 500 kWh/inhab. This indicator increased by 12.11% compared to 2011

Source: National Energy Balance 2011

Figure 4.10. Evolution of the energy intensity

The energy intensity shows a small reduction in the twenty years presented in Fig 4.10.

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The gross production of the national electricity sub-sector consisted of 65.9% thermal plants, 7.1% geothermal, 11.6% hydroelectricity, 9.9% self-producers, primarily through plant waste (sugarcane husks), and 5.5% wind.

Source: National Energy Balance 2011.

Figure 4.11. Composition of electrical energy production

The Energy Sector Structure

In the year 2007, with Law No. 612, the institutional structure of the Nicaraguan energy sector indicated the existence of institutions in charge of a.) the establishment of policies, strategies and standards; b.) regulations; c.) issuing licenses and concessions; d.) the commercial administration of the wholesale market; e.) operational programming and management of national and international interconnected system operations, through the regional transmission network. Legal regulations require the Ministry of Energy and Mines (MEM) to periodically review, update and evaluate the strategic plan and public policies in the energy sector, especially aspects of energy balance, supply, demand, energy conservation, price and subsidy policies of electricity services, service coverage policies in the country, supplying electricity to rural areas, and the policies, strategies, financing and investments of the energy sector. The Ministry of Energy and Mines has defined their mission as the following: to elaborate, institute, manage and promote energy and mining policy in the country; supporting its development with the environmental criterions of viability and sustainability. It also seeks to oversee and verify its compliance with current legislation, with the legal protection of all financial agents and with establishing

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strategies that allow for the comprehensive use of electricity generation resources for the greater benefit of society.

With the aim of reaching the objective declared in reference to conservation and the efficient use of energy as part of its Direction of Electricity and Renewable Resources, the Ministry of Energy and Mines, works with the Department of Energy Efficiency who states its functions as the following:

− Promote the establishment of standards that provide an incentive to introduce energy efficient electrical equipment into the country, in order to contribute to the nation’s policies on saving energy. − Implement training, educational and informational campaigns to promote the labeling system of electric appliances and of equipment that allow the consumer to know the energy efficiency of the equipment. − Support the creation of private companies that specialize in energy efficiency in order to promote the development of projects that encourage saving energy. − Propose incentives for establishing and creating private companies that specialize in energy efficiency services, including search tools to fund viable projects. − Through financial technical studies, establish an adequate and viable incentive to encourage the importation of energy efficient electrical equipment. − Conduct activities geared around research, development, and on the modernization and distribution of technology that are designed to make energy consumption more effective by selecting the processes, equipment, operative and maintenance methods, and type of energy to be used. − Conduct the development of studies that aim to implement energy saving activities as well as create booklets, pamphlets and manuals with the objective of educating on and promoting energy savings.

Together with the Department of Energy Efficiency, of the Ministry of Energy and Mines, energy coordinators as well as Energy Efficiency Committees in the ministries, decentralized entities, governmental agencies and other executive institutions have also been established.

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Proposal of the institutional framework in the participating countries

Two expert consultants, one for Central America (Romero, 2012) and another for the Caribbean (Arjona, 2012) conducted the institutional framework proposals for energy efficiency. The proposals follow the PALCEE implementation method. The general vision of the institutional framework proposals for each region, Central America and the Caribbean, were developed through an analysis of the institutional structure of each country’s energy sector. For Central America the institutional framework for energy, already established through specific ministries or departments for different branches of energy, has a more inclusive and flexible structure allowing for the cohesion of different sectors and agents involved in energy efficiency efforts. This cohesiveness leads to the establishment of national plans, which contribute to the efforts being made throughout the country. In contrast, the institutional structures of the Caribbean are not well integrated in each sector of energy. This has led to the establishment of smaller structures that unite all agents involved in the energy sector; boards are developed that lead discussions surrounding measures not just for energy efficiency, but also for the entire energy sector, thereby strengthening energy institutions. The following are the institutional framework proposals for energy efficiency suggested by the consultants, taking into consideration the individual traits of each country.

El Salvador

The proposal for El Salvador includes a three-phase plan for the next few years. The fundamental objective of the first phase (short-term) is to generate real “collective ownership” of energy efficiency (EE), associating real meaning for it in the country. In this sense, the “case” of EE cannot simply be “another National Energy Council program.” Instead it should generate simultaneous efforts in employment, in leveraging capital and a collective spirit that uses available resources to the best of their capacity in order to support the development of EE. The short-term objectives for this phase include the following:

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− Achieve the maximum dedication to EE on behalf of key players (opinion leaders, business leaders, key members of congress, the Ministry of Finance, among others) − Educate citizens, marketplaces and companies on the opportunities that EE can provide (with a focus on financial savings) − Obtain concrete results that demonstrate the real benefits of EE − Establish the foundations for more deeper institutional development − Establish the technical foundations for the development of long-term policy

As a result of these objectives, the creation of the “El Salvador Saves Energy Program” (PESAE; Spanish acronym for Programa El Salvador Ahorra Energía) was proposed, which unites public and private efforts with regard to EE. Its mission would be to assess each of the ministries and agencies that form part of its advisory council with a focus on the following: concrete efforts, plans, policies and energy efficiency measures; the design of public policies and regulations that favor the development of EE; and the development of efforts to maximize on the capabilities of EE in different consumer sectors. The “El Salvador Saves Energy Program” should be created as a temporary operational management project of the National Energy Council (CNE, Spanish acronym), lasting two to three years. Its structure should include the active participation of other agents in the decision-making process. In order for this to happen, the development of an advisory group, a coordinating committee and an operational management board should be created consisting of public and private agents that are most relevant to the development of EE in El Salvador. The actions that the PESAE must take will be focused on the following areas: • Residential electricity use, with the purpose of reducing losses and transforming subsidies to invoices, to subsidies for technology exchanges that compensate for an economically and politically sustainable transformation. • Public and commercial electricity use, with the purpose of taking immediate advantage of reduced energy use and financial savings, for proven technological changes (lighting and HVAC systems). • Industrial electricity use, focused on big industry.

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With regard to the second phase (mid-term phase), once the team that is part of the operational management group is technically sound and once the El Salvador Saves Energy Program is evaluated, a more permanent organization should be studied in detail under the National Energy Council in order to maintain the state’s drive and political support on the issue. If the results are deemed to be adequate, this second phase should maintain the structure of the program within the CNE, but with a stronger internal organization of the operational management group connected to the products or services being offered. Likewise, this phase should be focused on developing knowledge in order to suitably approach and maximize the EE capacity in El Salvador. It should also focus on the most cost-effective efforts that are supported by the program’s stakeholders. With regard to the long-term phase, the program should become a legal entity with its own assets and authority. Similarly, it is believed that the focus of this organization should be challenges of competition in El Salvador, which is why climate change and renewable energies should be integrated as a sphere of action. Likewise, given the institutional structure of the Salvadorian government, we consider that the agency that is developed should focus on the design and implementation of plans, programs and efforts, together with the development of information for decision-making, leaving the regulatory and policy development spheres with the National Energy Council. The public, private or public-private character of this agency should be defined according to the experience of the El Salvador Saves Energy Program, as well as the interests and expectations of the government and other interested parties. With regard to actions for this phase, we believe that the agency should work in all consumer sectors and must develop a long-term action plan, establishing the energy conservation curve of El Salvador.

Grenada

The objective of the institutional framework for energy efficiency in Grenada is the creation of conditions to change the habits and actions of society’s energy consumers in industrial, commercial and residential sectors. The transformation of the market is a key element here, as the majority of energy consumers follow patterns that are based on a specific lifestyle. Efficient technology can provide a great amount of energy savings, or even improve energy consumers’ expectations of comfort, security and quality. The institutional framework must increase the implementation of energy efficiency policies and will be based on the interactions between changes in behavior, financing and market transformation strategies. The preliminary proposal for the institutional framework for energy efficiency in the

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country is based on an inter-agency committee model that can be coordinated by the Ministry of Finance and Energy. It will consolidate the efforts of other ministries, governmental agencies, and private entities towards the National Energy Efficiency Plan.

Within this inter-agency committee, each of the participating organizations will have specific functions to be agreed-on by all members and which will report to the committee. These functions will be designated according to the experiences and operations of each organization.

The operational structure will support society and economic operators, as they are organizing themselves in order to contribute to national energy efficiency efforts.

The proposal suggests the establishment of a National Energy Efficiency Office, which must consider the objectives and targets of national energy policy as well as the programs that can be developed to achieve EE. Figure 4.12 shows the organizational structure proposed for the office.

Figure 4.12. Proposed structure for the National Energy Efficiency Office

Objectives include: ensuring energy security, achieve energy independence, maximize

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energy efficiency, promote the energy conservation, achieve environmental sustainability through “green energy” and minimize energy costs all together in the National Energy Policy. This new structure must be supported by a legal framework and will be designed so that it can promote and institutionalize energy efficiency for the different entities in each sector. The proposal for the internal organization of the National Energy Efficiency Office of Grenada is based on three interconnected areas

• Data analysis and planning of energy efficient projects and programs • Technical assessment that improves the quality of efforts and provides details and specifications of projects and programs • Implementation and follow-up of efforts

This organization is shown in Figure 4.13.

Figure 4.13. Organizational structure proposed for the National Energy Efficiency Office

Many different systems can be used to promote participation in energy efficiency.

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− Subcommittees on energy efficiency that report to the Board of Directors. Examples: public buildings or hotel subcommittees.

− A special energy efficiency committee at the University of St. George’s. The National Energy Efficiency Office could generate information so that other committees could form.

− Participation of the energy industry with energy efficient equipment and services.

− Funding programs for energy efficient projects. Example: a small loan issued to an energy user; as savings are made, the income to pay becomes available.

− Associations, investments and agreements with financial institutions could establish a program to substitute equipment.

− Design specific programs for small and medium-sized businesses.

Jamaica

Inspired by the general vision of the proposals for the Caribbean Region, a structure similar to Grenada’s is proposed for the institutional framework for energy efficiency in Jamaica. The preliminary proposal is for an Inter-institutional Committee that unites the efforts of various ministries and governmental organizations towards a National Energy Efficiency Office.

As part of the same structures of the committee, the objectives will be connected to the National Energy Conservation & Efficiency Policy 2010-2030, mentioned earlier and presented in Figure 4.14.

The proposal objective may be the same for all sectors in order for all parties to work together on the same efforts. Nevertheless, the promotion and application of energy efficiency may be different in each sector.

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Figure 4.14. Objectives of the National Energy Efficiency Office proposal

The proposal for the office must consider the objectives and vision of national policy with an internal organization that focuses on three interconnected areas in one basic cycle, as presented in Figure 4.15.

Figure 4.15. Proposed areas of activity

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Nicaragua

Based on a general vision of the proposals for Central America, the following proposal is based on a three-phase plan for the upcoming years, in accordance with the political and institutional context of Nicaragua. Its structure is presented below in Figure 4.16..

Figure 4.16. Phases of the proposed plan

According to the political and social context, the most relevant objectives to promote EE in Nicaragua are:

- To collaborate with the National Human Development Plan.

- To save energy.

- To save money in electricity subsidies.

- To contribute to the protection of the local and global environment.

In addition, the priorities of the first phase should be connected with projects that have a high social focus, that have “efficient results” and pilot projects, that reveal measurable and concrete results, and that build trust and reliability in the benefits of EE implementation in the country.

These efforts are already taking place, as the government of Nicaragua, led by the Ministry of Energy and Mines (MEM), is developing several lines of action in order to encourage the efficient use of energy. The initiative that stands out most is the National Sustainable Electrification and Renewable Energy Program (PNESER, Spanish acron-

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ym) to take place between 2012-2015. The program includes three actions of great importance in order to best use energy (for example, the replacement of two million incandescent light bulbs in homes). Additionally, both in the public and private sector, there are different initiatives taking place with similar objectives such as replacing buses in the public transportation system and an energy audit program from the Cleaner Energy Use Center (Centro de Producción más Limpia, CPML).

One of the key factors that has been identified is to place all of these efforts under one common framework, which has been called “Nicaragua Uses Energy Well” (NUBE, Spanish acronym), an initiative led by the government of Nicaragua, under the Ministry of Energy and Mines.

In order to establish a solid ideological and conceptual foundation, a series of strategic steps that can be taken gradually has been proposed. These steps will allow for progress to be made and will correspond to the degree of improvement taking place in the country with regard to EE and the impact that the adopted measures have generated. This foundation should generate a shared vision as well as establish a stake at public policy that convenes and organizes parties with regard to objectives that allow for energy efficiency to take place as part of stable and longterm policy in the country.

This requires the government of Nicaragua to develop a focus that allows for necessary steps to be taken in order to promote the benefits and awareness of energy efficiency in all sectors; with a special focus on those that are priorities of the government’s social policy, on residential use and the country’s productive structure.

On a short-term basis, the initiatives to be developed should include the following:

- Contribute to the National Human Development Plan.

- Generate efficient, measurable and concrete results. Sufficient strategies to achieve this include pilot projects and the development of projects organized internationally (i.e. replacing incandescent light bulbs).

- With the objective of uniting capacities, avoiding duplicate efforts and improved use of resources; establish the roots to promote EE in the country, based on the credibility, technical expertise and collaboration that are needed from the different parties involved.

In order to strengthen and move short-term actions forward, it is important to

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develop a trademark that incorporates the objectives that strengthen the development of energy efficient policies in the country and that strengthen the construction of successful experiences in creating supportive practices, instruments and tools in priority sectors.

On a long-term basis, the following should be developed: a more permanent institutional structure, the construction of national EE plans, the establishment of inspection systems and formula, monitoring and evaluation processes, and the creation of organizations in charge of implementing initiatives with a focus on the country’s social, energy and economic challenges.

The program seeks to fulfill the aforementioned objectives; the identification of opportunities that generate concrete results and that incorporate with the National Human Development Plan, Nicaragua’s energy policy and environmental objectives, and together with long-term planning.

Three lines of action have been identified for the plan:

• 2013-2017 NATIONAL ENERGY EFFICIENCY PLAN (PNEE, Spanish acronym).- a national EE plan will be developed whose final evaluation will occur at the end of the term of President Daniel Ortega. The plan will have a dynamic development according to the information that the government of Nicaragua has.

• DEVELOPMENT OF PUBLIC POLICIES AND REGULATIONS.- A new decree that will include the presidential mandates necessary for the development of energy efforts, the establishment of a transformation strategy of socially sustainable subsidies, and the applicable evaluation procedures in order to implement 13 Nicaraguan Mandated Technical Regulations (NTON, Spanish acronym) for energy efficiency. It will also have a draft law and regulations, established with the consensus of all energy consumption sectors. Lastly, it will include a Regional Administration and Management of Electronic Equipment Disposal Project (RAE).

• PROJECTS.- Projects with funding for the 2012-2015 period (energy efficient lighting in hospitals, street lighting savings plans, solar energy for refrigeration and air temperature control, trial projects for installing thermal systems, photovoltaic system for implementing production systems in rural areas, exchanging incandescent bulbs for Compact Fluorescent Lamps in residential sectors and exchanging magnetic ballast florescent lamps (40W) for electronic ballast florescent lamps (32W) in the government sector), and the integration of other energy efficiency implementation agents (national capacity building project

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in EE, collaboration with the Ministry of Education to continue the “Efficient Energy Use” educational campaign, and an improved public transportation and PNSER project).

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5. Results achieve

It is essential to highlight the importance of two of the projects undertaken by the PALCEE Project: • The institutional framework for energy efficiency • The implementation of recommendations by energy audits a. The institutional framework for energy efficiency is important for the following reasons: • The first and most important result is the strengthening of institutional framework of the energy sector in general. In countries where it is just recently being created or for those countries where it is not strong enough, the management of energy efficiency must be part of the structure of the entire sector; however where there are weaknesses also contributes to the overall integrity of the management of the sector. • The establishment of the national coordination of multiple and widespread projects that take place in countries. • The centralized follow-up of the results achieved from the different projects and the ongoing support provided by the responsible institution. • The identification of program achievements that will lead to integrating national goals and a solid commitment from national energy authorities on the development of energy efficiency. • The contributions to sustainability by energy efficiency programs, which was lacking in the region. b. The implementation of energy audit recommendations is important for the following reasons: • A large majority of energy audits performed in the region remained as simple documents, taking up the shelf space of companies, ministries and other institutions; however, they never go into the implementation phase. • The verification of energy efficiency benefits that can be demonstrated financially to institution administrators and to company leadership has the positive effect of stimulating other projects and serving as an example for

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other institutions and companies. • The hands-on training getting by the implementation of recommendations is multiplied by the benefit of having trained staff to implement energy efficiency measures.

Training of personnel from the institutions responsible for energy efficiency

Part of strengthening institutions is providing training to those officials in charge of the administration and management of national energy efficiency programs. The objective of strengthening institutions is to be able to execute the necessary projects that improve energy use in the country. In this case, officials were trained with two internships. The first internship was with the Austrian Energy Agency (AEA) with the purpose of learning about the administration of energy efficiency projects in European countries. The second internship took place at the Trust Fund for Electrical Energy Savings (FIDE, Spanish acronym) of Mexico, with the objective of learning about implementation programs and demonstration projects in the region.

Figure 5.1. Internships participants

Strengthening the capacities of the staff from the responsible institutions brought about great interest in replicating some of the projects that have taken place in the visited countries; consulting has been requested in order for that to happen.

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Figure 5.2. Internship photos

One of the lessons that the officials learned was the importance of creating awareness in the population starting with children, which calls for the development of energy efficiency awareness programs in elementary schools. This program should in no case be a single program; on the contrary, it should be implemented along with national programs..

Figure 5.3. Internship activities

Figure 5.4. Internship photographs

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Results by Country

After highlighting the two most significant results mentioned above, it is important to note the results of the PALCEE Project activities on the four participating countries in detail.

El Salvador

As mentioned earlier, the El Salvador Saves Energy Program (PESAE) was the first step in the proposal of the institutional framework progressive development process.

The proposal (Romero, 2012) to establish the PESAE was discussed during a workshop attended by energy sector authorities and the institutions that have energy efficiency projects or programs. With some adjustments, a consensus was reached among the participants and all accepted the leadership of the National Energy Council under the Direction of Energy Efficiency.

Figure 5.5. Session to establish the PESAE

The Minister of Economy and President of the National Energy Council led its official launching. It was attended by the Minister of the Environment, by top executives of PESAE member institutions and companies, and by a large amount of public interested in the development of the country’s energy efficiency.

Figure 5.6. PESAE Launching

It is worth to mention, the PESAE contributes to strengthening the lead institution

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of the energy sector, the National Energy Council (CNE). A new institution, since it began its operation in August 2009 and brought effective leadership to energy efficiency in the country.

As a contribution to the sustainability of energy efficiency, the PALCEE Project organized concrete actions among which included the development of demonstration projects that brought theoretical and practical skills to professionals in the country in order to develop energy audits and to implement its recommendations.

Implementation of audit recommendations are a central issue of sustainability. In the majority of the region’s countries audits are performed that result in good documents, but that do not motivate the implementation of energy efficiency measures. A strong point of the PALCEE Project is to demonstrate the benefits of energy efficiency by implementing the recommended measures with the participation of the professionals that were trained by the project. The training was led by a contracted specialist (Yolanda Salazar; Fundación Centro Nacional de Producción Más Limpia, 2013) and it included a theoretical course, audits and the implementation of recommendations.

The consultant was in charge of training the professionals on the development and implementation of energy audits.

Figure 5.7. Theoretical training on energy audits

Upon the completion of the theoretical training, attended by 10 professionals, the performance of each of the participants was evaluated, and a group of seven was chosen as technical assistants for field work.

The audits were held at the National Citizens Registry (RNPN, Spanish acronym) and at the following companies: PROTECNO, a manufacturer of backpack sprayers for agricultural use; CONDUSAL, an electric cable manufacturer; and PATRONIC, in the

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powdered food and condiment food industry.

As a result of these audits, the management of these institutions were motivated to continue improving their energy efficiency. They established committees in charge of developing projects, generating and maintaining use statistics; and set aside part of their budget in order to implement all the measures recommended by the audit.

These projects were supported with seed capital in order to implement the recommendations that resulted from the audits for each of the institutions. Twelve energy efficiency measures were implemented out of a total of 22 measures identified from the four energy audits. The trial project therefore achieved 54% of the total possibility for implementation.

The Table 5.1 details the economic and energy benefits for each institution audited, as well as the to-date investments made.

Source: (Salazar, Yolanda; Fundación Centro Nacional de Producción Más Limpia, 2013)

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Figure 5.8. Energy efficient appliances - RNPN

Figure 5.9. Energy efficient equipment and company staff - PROTECNO

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Figure 5.10. Energy efficient equipment and company staff - PATRONIC

Figure 5.11. Energy efficient equipment - CONDUSAL

Together with the cooperation’s objectives on social benefits to those in need, the CNE “Efficient Residential Lighting” project was supported in low-income regions of the Santa Ana Municipality with the donation of 3,000 Compact Fluorescent Lamps (CFL). This generated knowledge and awareness to the new technology, supporting families’ financing by saving approximately 25% on their electric bill.

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Figure 5.12. Energy efficient lighting – Santa Ana

Grenada

The interest for improving energy use in the island has been a consistent accomplishment, shedding a positive light on the Division of Energy of the Ministry of Finance and Energy. The Permanent Secretary of the Ministry took on the proposal brought forth by the consultant in the Caribbean (Arjona, 2012). The proposal included the establishment of an office in charge of energy efficiency, giving way to the possible formation of a national office and to increasing the number of officials in the division.

Upon acceptance of the proposal, and familiar with the continued support of the PALCEE Project throughout the development of trial projects, the Deputy Permanent Secretary requested the project be applied in hotels, as the greatest economic activity in the island is tourism. With this in mind, the contracted consultant (Escalante, 2013) provided theoretical training for 15 professionals from Grenada so they could perform energy audits. Once the training was complete, audits were conducted in two hotels representative of the island, Coyaba and Allamanda. Six participants that were trained in the theoretical course assisted in the audit.

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Figure 5.13. Theoretical training on energy audits

Of great interest to the hotel management, the audit results incentivate them to share their positive experiences and results with the association of Caribbean hotels. In carrying out the recommendations made by the audit and in order to benefit fully from them, they will focus on implementing the economic and environmental benefits presented.

The main recommendation for the hotels is to produce general maintenance standards for the buildings. This produces at least two important results: it reduces energy use and energy costs and, additionally can enhance and influence upon the image of the hotel, central to hotel business.

The measures implemented at the Coyaba Hotel included switching from cathode ray tubes screen televisions to LED screen television sets. This reduced power usage on standby from 15 W to 0.5 W, which is a significant savings since they remain in standby mode 24 hours a day. Another recommendation applied was the substitution of old air conditioners for efficient inverter air conditioners.

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Figure 5.14. Hotels in Grenada

The effect of the measures recommended from the audit in this hotel will be easily perceived because the buildings are organized in groups of 10 rooms, allowing them to contrast the consumption of two similar buildings: one where the measures have been implemented and the other where they have not.

In addition, these measures also create greater visibility of the benefits obtained when the consultant shares them with other Caribbean countries that they could be applied to and help to seek financial support in order to implement all the recommendations made in the energy audits in the Caribbean.

The implementation of the recommendations in the Allamanda Hotel was not possible. The hotel’s maintenance conditions are not adequate to replace equipment and their duration would then decrease. The results of the energy efficiency benefits, therefore, would be greatly affected.

A commitment between OLADE and ADA to support low-income communities led to the project, “Energy Efficient Lighting in the Residential Sector of Telescope: Saving Energy, Saves Money.” The project is supported on a previous analysis of the community where the project took place based on the electricity consumption of homes. The project established the monitorization of this use. The final results of the project will be presented at the CARICOM Energy Week, and will demonstrate how the exchange of incandescent light bulbs for 3,000 CFLs that will benefit 425 homes. As a result, this project will strengthen the Energy Division by presenting the project as a contribution from the Ministry of Finance and Energy in support of improving energy use on the island.

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Figure 5.15. Telescope Community

Jamaica

A successful case of the direct adoption of the Caribbean consultant’s proposals took place in Jamaica through the establishment of the Jamaica Energy Council (JEC). The council groups all parties involved in the energy sector in order to discuss and organize projects proposed by the Ministry for the improvement of energy use. The acceptance of this council was so well supported and accepted that the Inter-American Development Bank (IDB) joined the proposal made by the PALCEE Project to reinforce the energy efficiency institutional framework. It made a financial contribution in order to have an official in charge of energy efficiency projects in the country, for which an Energy Efficiency and Conservation Official was contracted.

The importance of strengthening the energy efficiency institutional framework in the country is in the capacity to spread and replicate the projects that take place in the Energy Division to all the institutions that participate in the JEC.

The PALCEE Project took action to benefit the visibility and applicability of energy efficiency in all sectors. These actions included training professionals on energy audits, conducting energy audits, and finally implementing the recommended measures.

The contracted consultant (Noel Brown; University of Technology, Jamaica, 2013) developed the above actions starting with the training of 19 engineering students with different specialties, instilling knowledge and interest among the students for executing energy efficiency projects. The final evaluation of the course brought forth seven

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young students to move forward with the energy audit training, which were held at the Altamont Court and Christar Villas hotels, and at the NWC Primary School (National Water Company).

Figure 5.16. Participants and instructors from the technical course

These efforts inspired the Ministry to provide an option for energy audits as well as to continue with an agreement with the University of Technology to train auditors to work in Jamaica’s public sector. The Ministry will be in charge of obtaining the funding to implement the measures recommended from the audits.

The common finding of the hotel audits in Jamaica was the excessive use of thermal energy due to the lack of efficient hot water heaters. In light of this, the recommendation was to install solar water heaters for both hotels.

With regard to the social aspect of the project in Jamaica, an audit was conducted of the NWC Primary School located near the University of Technology. The audit resulted in the implementation of energy efficient lighting around the perimeter of the school for the safety of the students, the replacement of existing refrigeration equipment and the provision of a source of cold water for student use.

Figure 5.17. Energy efficient lighting at the NWC Primary School.

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Furthering the social participation of the cooperation, a rural community without access to Jamaica’s electrical grid received support through the donation of 2,000 CFLs. This was part of the government’s inter-agency efforts along with collaboration from the Rural Electrification Program (REP).

Nicaragua

Based on the recommendations from the consultant for Latin America (Romero, 2012), strengthening energy efficiency management within the Ministry of Energy and Mines (MEM) took place by establishing an improved organization of the department, which led to the creation of the Direction of Energy Efficiency (DEE), directly connected to the Minister. The Direction of Energy Efficiency was established in order to highlight and provide visibility on energy efficiency with the public participation of all parties involved in responsible energy use in the country, creating cohesiveness amongst the parties. The DEE has created National Energy Efficiency Forums with the objective of connecting all sectors and demonstrating the achieved results of all energy efficiency efforts taking place in the country.

As part of energy efficiency sustainability, which is the PALCEE Project’s main objective, concrete actions were taken through demonstration projects similar to those explained previously by combining theoretical trainings with energy audits. The execution of the audits and resulting implementation of its recommendations were conducted by a consultant contracted by OLADE (Chanto, 2013).

Figure 5.18. Theoretical training on energy audits

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Upon completing theoretical training for 19 professionals, the performance of each of the professionals was evaluated and a group of 11 participants were chose to perform fieldwork.

The audits took place in four institutions: the Penitentiary Systems of Granada and Tipitapa, the Nicaragua-Germany Training Center (CECNA, Spanish acronym) and the El Artesano, S.A. The penitentiary wardens were pleased with the results because of how they contribute to greater security of the institutions with lamps that surrounded the perimeter of the institutions. For CECNA, this was a great support because it created technicians specialized in the area of energy efficiency and their respective committees.

Seed capital supported these efforts in order to implement the audit recommendations in each of the institutions. Thirty-six percent of the total recommended energy efficient measures identified in the four energy audits were implemented. Prior to improving the penitentiaries’ lighting, it was necessary to improve the interior wiring of the buildings.

The following is a detail of the total economic and energy benefits by institution, as well as the amount of total investments made.

Source: Luis Chanto and MEM

By request of the MEM and together with the objectives of the ADA of supporting the community, a project was funded in a section of the San Juan de Dios Hospital, in Estelí. A solar water heading system was installed to the great satisfaction of the patients who could now take their daily showers with hot water.

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Figure 5.19. Energy efficient equipment - CECNA

Figure 5.20. Energy efficient equipment - Tipitapa

Figure 5.21. Energy efficient equipment - Granada

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Figure 5.22. Solar energy system - Estelí

Committed to contributing to the community and to populations living in low-income areas in Nicaragua, support was given to program, “Efficient Residential Lighting - Phase II.” Generating a significant amount of savings for families, 3,000 Compact Fluorescent Lamps for residential use were donated to the Masaya Municipality.

Figure 5.23. Energy efficient lighting - Masaya

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6. Lessons learned

• In cases where the institutional structure of the energy sector needs support, fulfilling objectives of this program contributed to strengthening its structure, benefiting the entire energy sector. This was made possible due to the receptiveness that energy efficiency received among authorities and among other important parties in the sector.

• A fundamental condition of strengthening the institutional framework of energy efficiency requires the political commitment of sector authorities; with their financial contributions and human resources, they make this strengthening possible.

• The success of this program demonstrates that in the project’s participating countries, as with the majority of countries in Latin America and the Caribbean, the political will to strengthen the energy institutional framework existed; nevertheless, more international cooperation and more sharing of experiences is needed in order to make progress.

• It is essential for the international cooperation institutions to consider that beyond specific energy efficiency programs, it is necessary to support strengthening institutional frameworks in order to achieve the fundamental sustainability of the designated programs to be developed.

• In all the participating countries, energy efficiency programs were already in operation; some with international cooperation and funding. Nevertheless, there was a lack of collaboration among them with regard to providing unified guidelines and a long-term vision, in which case the institution responsible for energy efficiency is the most appropriate for fulfilling this role.

• It is noted the need to develop efficient equipment markets, particularly in the Caribbean, in order to facilitate its acquisition when energy efficiency programs promote their use. Imports, without local support from maintenance services and spares, hinder the dissemination of technology.

• Controlling the quality of efficient equipment introduced to the local market, will prevent that poor performance discredits the technology being incorporated.

In the cases in which they were selected as demonstration projects, the imple-

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mentation of the energy audit recommendations produced concrete results, motivating company and institutional administrators to implement all the recommended measures due to the resulting financial benefits.

• The incorporation of participants in the theoretical training for energy audits and in the implementation of the recommended measures, allowed for both hands-on and theoretical practice, providing for solid instruction for each one of the participants.

• The commitment of OLADE to the PALCEE Program is reflected in the visibility its directors and staff members gave in the international forums in which they participated, specifically in the regional seminars on energy efficiency, in which each of the participating countries’ institutions responsible for energy efficiency had notable participation.

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Bibliography

Arjona, D. (2012). Proposal of Energy Efficiency Institutional Framework: Grenada and Jamaica. Quito, Ecuador: OLADE.

Brown, Noel; University of Technology, Jamaica. (2013). PALCEE Demonstrative Projects in Jamaica.

Chanto, L. (2013). PALCEE Demonstrative Projects in Nicaragua.

Escalante, A. (2013). PALCEE Demonstrative Projects in Grenada.

International Energy Agency. (2010). Energy Effiency Gobernance. Handbook.

Limaye, Heffner, & Sarkar. (2008). An Analytical Compendium of Institutional Frameworks for Energy Efficiency Implementation. New Yor: World Bank.

OLADE: Poveda, Mentor. (2007). Energy Efficiency: An Unexploited Resource. Quito, Ecuador: OLADE.

Romero, A. (2012). Proposal of Energy Efficiency Institutional Framework: El Salvador and Nicaragua. Quito, Ecuador: OLADE.

Salazar, Yolanda; Fundación Centro Nacional de Producción Más Limpia. (2013). PALCEE Demonstrative Projects in El Salvador.

Weizsäcker, E., Lovins, A., & Lovins, H. (1997). Factor 4: Duplicate the goodwill with half of the natural resources: Report to Roma’s Club. Galaxia Gutenberg (Spanish Edition).

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