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1
2010
Draft National Energy Policy
and Action Plan
St. Kitts and Nevis
St. Kitts and Nevis
2/2/2010
NEP-SKN DRAFT PAGE 1 OF 45
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20 Acknowledgements
21 This draft National Energy Policy was prepared by the Ministry of Public Works, Utilities, Energy
22 and Housing of the Federal Government of St. Kitts and Nevis with the support of the
23 Organization of American States, Department of Sustainable Development and German ProfEC
24 GmbH under the scope of the Caribbean Sustainable Energy Program (CSEP) funded by the
25 European Commission under the 1st funding cycle of the EU Energy Initiative (2006-2011).
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30 Table of Contents
31 Foreword ......................................................................................................................................... 5
32 Vision........................................................................................................................................... 5
33 National Energy Policy Rationale ................................................................................................ 5
34 Guiding Principle ......................................................................................................................... 5
35 Policy Document Structure ......................................................................................................... 6
36 A. Energy Sector Digest .................................................................................................................. 7
37 St. Kitts and Nevis Energy Situation and Challenges ...................................................................... 8
38 1.1 Energy Sector Structure ........................................................................................................ 8
39 1.2 Energy Supply........................................................................................................................ 8
40 1.3 Energy Conversion and Distribution ................................................................................... 12
41 1.4 Energy consumption and demand ...................................................................................... 15
42 1.5 Response to the Energy Sector Challenges......................................................................... 21
43 1.6 Renewable Energy Potential ............................................................................................... 23
44 B. National Energy Policy ............................................................................................................. 26
45 1. Vision and Strategy ................................................................................................................... 27
46 1.1 Vision ................................................................................................................................... 27
47 1.2 Principles and Strategy ....................................................................................................... 27
48 2. Policy Objectives and Statements ............................................................................................. 28
49 2.1 Energy Sector Management ............................................................................................... 28
50 2.2 Diversification of Energy Supply ......................................................................................... 29
51 2.3 Electricity Generation ......................................................................................................... 31
52 2.4 Transportation .................................................................................................................... 31
53 2.5 Energy Use .......................................................................................................................... 32
54 C. National Energy Action Plan .................................................................................................... 34
55 1. Introduction .............................................................................................................................. 35
56 2. Implementing the National Energy Policy – Tools and Actions ................................................ 36
57 2.1 Energy Sector Management ............................................................................................... 36
58 2.2 Diversification of Energy Supply ......................................................................................... 45
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59 2.3 Electricity Generation ......................................................................................................... 46
60 2.4 Transportation .................................................................................................................... 48
61 2.5 Energy Use .......................................................................................................................... 51
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64 Foreword
65 Dear reader,
66 This National Energy Policy is intended to clarify the position of the Government of St. Kitts and
67 Nevis regarding the nation’s energy development. It is also intended to foster the development
68 of an appropriate legal, institutional and economic framework as well as management
69 mechanisms for enabling sustainable and sound economic energy activities and services. The
70 overarching goals are strengthening the competitiveness of the economy of St. Kitts and Nevis,
71 establishing/transitioning to a strong position as a leading nation regarding sustainable energy
72 development, and addressing international climate change mitigation and adaptation issues.
73 Vision
74 The Federation of St. Kitts and Nevis wants “to become an island nation with a sustainable
75 energy sector where reliable, renewable, clean and affordable energy services are provided to
76 all its citizens”.
77 This will require a comprehensive transition towards a more sustainable energy balance, where
78 everybody – government, utilities, businesses, NGOs, and citizens – should take part and will
79 benefit.
80 National Energy Policy Rationale
81 The energy challenges in St. Kitts and Nevis are both national and international in nature, and
82 therefore require a holistic and coordinated approach to address the changes needed in the
83 types of fuel used, the types of energy carriers, the consumption patterns, and the infrastructure
84 and management needed to enable the transition to a more sustainable energy sector.
85 This transition is currently driven by the incrementally higher electricity rates, high transportation
86 fuel prices, and global climate change awareness and concerns in St. Kitts and Nevis. The
87 aforementioned factors impact businesses and citizens alike, and they should be made aware of
88 the need for energy efficiency and conservation, as well as socio-environmental responsibility
89 and increased investments in renewable energy technologies (RETs).
90 Guiding Principle
91 The principle pillar of the St. Kitts and Nevis Government’s National Energy Policy is
92 considering energy as a tool to achieve Sustainable Development, or in other words, “Energy
93 for Sustainable Development”.
94 This encompasses a holistic and integrated approach that reflects the best interests of the
95 country’s economy, social well-being and environment with regards to energy sources, supply,
96 conversion, use and export. This requires the provision of adequate and reliable energy
97 services at affordable costs, in a secure and environmentally benign manner and in conformity
98 with social and economic development needs1.
1
Indicators for sustainable energy development. International Atomic Energy Agency (IAEA), Vera I,
Langlois L, Rogner H.
5
99 Policy Document Structure
100 This Policy document is comprised of three main sections, the St. Kitts and Nevis Energy Sector
101 Digest (Section A), where the Energy sector statistics, conditions and development projections
102 are summarized. This is followed by the National Energy Policy (Section B), in which the
103 Government of St. Kitts and Nevis showcases its vision for energy development in the
104 Federation and highlights its policy goals and objectives.
105 The potential pathways, solutions and tools for short-, medium- and long- term actions are
106 stipulated in the National Energy Action Plan (Section C), which forms an integral part of this
107 Policy document as a means to implement and enforce the Policy.
108 The Energy Sector Digest and the National Energy Action Plan need to be seen as dynamic
109 documents that should be reviewed and adopted every three years, in order to account for
110 changes and to steadily guarantee the appropriate enforcement of the overall Energy Policy.
111
112 Honourable Dr. Earl Asim Martin
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141 A. Energy Sector Digest
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154 St. Kitts and Nevis Energy Situation and Challenges
155 As a starting point it is important to translate the global energy challenges and developments as
156 they pertain to St. Kitts and Nevis. In so doing, this section will briefly explain (1) why it is
157 important to develop a national energy policy and (2) why one cannot do this in isolation from
158 global developments.
159 In other words, it should be clear why and what kind of effects or impact the status-quo or
160 business-as-usual has on the economy and other sectors of society. The importance of reliable,
161 clean and affordable energy as a tool to achieve sustainable development in St. Kitts and Nevis
162 should also be acknowledged. This sustainable development will improve economic, social and
163 environmental conditions for all citizens.
164 1.1 Energy Sector Structure
165 1. The St. Kitts and Nevis Energy Sector is represented in principle by two government
166 owned utilities operating in the twin-island nation. In Nevis the energy department
167 underwent a corporatization process in 2003 and a private utility company, NEVLEC,
168 was formed with the state as the only shareholder. In St. Kitts, the St. Kitts Electricity
169 Department (SKED) is undergoing a similar process, which is on track to be finalized by
170 the end of 2010.
171 1.2 Energy Supply
172 2. Given the vulnerability of the economy of the small island developing state of St. Kitts
173 and Nevis, which is heavily dependent upon imported petroleum, and, given the sharp
174 and continuous rise in petroleum prices, it is imperative that the federation does all that
175 is within its power to help ensure a secure and reliable energy supply.
176 3. The primary energy supply in the federation is fossil fuels including Diesel, Gasoline,
177 Kerosene (jet fuel) and LPG.
178 4. 68,161 tons of fuel oils were shipped in 2008 to St. Kitts Sea Port and 15,780 tons to
179 Nevis Air and Sea Ports. There is no production of primary and/or secondary fossil fuels
180 in St. Kitts and Nevis2
181 5. The global demand for energy is rapidly growing and creates greater competition in
182 securing energy supply. It is projected that the global energy demand will increase by
183 50% in the next 25 years.3 This will eventually lead to disruptions in supply and
184 increased geo-political tensions, having a direct impact on the energy supply services
185 and costs for St. Kitts and Nevis.
186 6. Another factor that has the potential of impacting the energy supply is peak oil, that is,
187 the time when oil production reaches its global maximum output, after which it will
188 decline.4 As the production of oil peaks, it is expected that the price of oil will increase. A
189 peak in oil production would mean the end of low cost oil, and a spike in the price which
2 St. ChristopherChristpoher and Nevis Port Authority respectively The Ports division of the Nevis Air & Sea Ports Authority via the Central
Statistical Office, SKN, March 20102010
3 IEA, World Energy Outlook, China and India Insights, Paris 2007. In this energy report the statistics for the international energy development
reference scenarios are used unless referred differently.
4
Mayo, S., and Robinson, B., 2006, “Peak Oil: Can We Rely on Our Oil Supply?” Geodate 19(1), pp. 5-8
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190 would make it untenable for any economy. Under these circumstances, diversifying the
191 energy portfolio of St. Kitts and Nevis will become even more important.
192 7. Due to increasingly expensive and volatile international fossil fuels prices and the high
193 dependency of St. Kitts and Nevis on imported fossil fuels, increasing pressure is
194 building on securing energy supply for power generation and transport at affordable
195 price levels, critical for maintaining and increasing national economic activities.
196 8. The economy of St. Kitts and Nevis is quite vulnerable to shocks in the price of oil. In the
197 past, these shocks have had far reaching effects including an increase in the cost of
198 living and an escalation in interest rates. The shocks could produce great increases in
199 petroleum import bills, which the federation may have trouble meeting with earnings from
200 current industries, i.e. tourism, light manufacturing, and other commodity exports.
201 9. Analysis of historical data as well as projections, have shown that under business as
202 usual and optimistic scenarios, the energy demand in the federation continues to grow,
203 indicating continued economic growth. However, under pessimistic and stress
204 conditions, the demand for energy declines, indicating a slowdown in the economy.5 It is
205 therefore important to diversify the energy portfolio of the federation.
206 10. Given the volatility of crude oil prices on the world oil market, St. Kitts and Nevis has a
207 natural interest in diversifying its energy portfolio by using substitute energy sources.
208 These substitute sources can be other conventional energy sources such as natural gas,
209 or they can be renewable energy sources.
210 11. On the global level the energy consumption related CO2 emissions are projected to
211 increase by 60% during the next 25 years, leading to an estimated average increase in
212 temperature of 2.0 to 4.5 degrees Celsius.6 This will lead to among other sea level rise,
213 and increased frequency and intensity of extreme weather conditions as droughts,
214 hurricanes and rain fall related flooding of which St. Kitts and Nevis is subject to.
215 12. The gradual warming of the earth’s surface temperature will have far reaching effects
216 including changes in the sea level, climate changes (including changes in the intensity of
217 extreme weather conditions such as droughts, hurricanes and rain related flooding), and
218 the destruction of coastal areas, coral reefs, ecosystems, and marine life which will
219 adversely impact the economy in areas like the fishing industry and eco-tourism.
220 13. Small island states such as St. Kitts and Nevis are particularly vulnerable, as coastal
221 land loss can have dire economic and social effects. The land mass of St. Kitts and
222 Nevis is small as is, therefore the loss of any of this land could lead to emigration of the
223 populations (as retreat may not be an option), thus dealing a severe blow to the
224 economies. The destruction or disappearance of beaches could also have a profound
225 impact on tourism, which is a main source of income in the federation.
226 14. St. Kitts and Nevis contributed only 0.196 of the 30,377.313 million metric tons of CO 2
227 produced from the burning of fossil fuels during 2008, that is 0.0006 percent of the total
228 amount produced globally (EIA/DOE). Although St. Kitts and Nevis contributed only a
5
Lawrence, V., 2007, An Empirical Analysis of Energy Demand and its Implications for the Caribbean
Community and Common Market (CARICOM).
6 IPCC, Climate Change 2007: The Physical Science Basis. Contribution of Working Group I to the Fourth Assessment Report of the
Intergovernmental Panel on Climate Change, New York 2007.
9
229 minute amount of GHGs to the global output, the impact of global warming on these
230 small island states is arguably greater than the impact on industrialized countries.
231 15. Figure 1 illustrates the relationship between per capita petroleum demand and per capita
232 CO2 emissions. The charts show a strong association between the intensity of energy
233 use, as measured by petroleum demand per capita and CO2 emissions per capita.7
234 Figure 1: St.Kitts-Nevis: Petroleum Demand Versus CO2 Emissions
Petroleum Demand-CO2 Emissions Relationship: St.Kitts-Nevis
Per Capita Petrol Demand Per Capita CO2 Emissions
7.00 3.00
6.00 2.50
5.00
2.00
Tons of CO2
4.00
Barrels
1.50
3.00
1.00
2.00
1.00 0.50
0.00 0.00
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CO2 = -0.08 + 0.45 (Petroleum Demand)
R2 = 0.98
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236 Source: US DOE Energy Information Administration [2005]
237 16. Due to increasingly expensive and volatile international fossil fuels prices and the high
238 dependency of St. Kitts and Nevis on imported fossil fuels, increasing pressure is
239 building on securing energy supply for power generation and transport at affordable
240 price levels, critical for maintaining and increasing national economic activities.
241 17. Globally the increased deployment and use of renewable energy technologies and more
242 efficient use of existing energy infrastructure and applications are considered critical
243 tools to combat global climate change and reduce dependence on imported fossil fuels
244 while guaranteeing sustained socio-economic wellbeing and growth.
245 18. In the move towards the economic development and independence of St. Kitts and
246 Nevis, the federation has sought to diversify their national economy by moving away
247 from agriculture as the main source of income and towards tourism.
248 19. The Federation of St. Kitts and Nevis, as a Small Island State with limited developed
249 natural, financial and technical resources and a small open and foreign investment
7
Lawrence, V., 2007, An Empirical Analysis of Energy Demand and its Implications for the Caribbean
Community and Common Market (CARICOM).
10
250 oriented economy, is highly interrelated and dependent on global market developments.
251 In recent years, the global food, financial and energy crises challenged the resilience of
252 this twin-island nation, where reliable energy supply plays an important role in sustaining
253 socio-economic activities.
254 20. All Governmental utilized diesel and petroleum derivates (mainly for power generation
255 and governmental transport) in St. Kitts are accessed under the Petro-Caribe contract
256 with Venezuela. The petroleum derivates are purchased at market prices, but the
257 Government receives a credit from Petro-Caribe of up to 60% of the value per barrel
258 under an interest rate of 1% over a period of 25 years. The Ministry of Finance is in
259 charge of the financial exchanges and monitoring of the Petro-Caribe. Tankers from
260 Venezuela ship with a frequency of about 10-15 days to St. Kitts and store the fuel in the
261 storage tanks located at Sol (where the government rents the storage tanks).
262 21. The private sector and general consumers on St. Kitts however are served by other
263 importers and distributers of Texaco and Sol (former Shell) for St. Kitts and Delta and
264 Texaco for the case in Nevis. Sol imports next to fuel from Venezuela also petroleum
265 derivates as diesel, gasoline, jet fuel, and maritime heavy fuel from the international
266 market, including Trinidad & Tobago.
267 22. Nevis does not participate in the Petro-Caribe deal. The NIA recently NIA decided to
268 start importing asphalt products for road construction from Venezuela but no fuels are
269 considered under this agreement. A requirement and problem has been the fact that
270 storage capacities and logistics must be in place so that the fuels can be brought in and
271 stored. The NIA does not own and does not have the possibility to rent such facilities at
272 the moment. NEVLEC buys fuel oil at international market prices from DELTA which is a
273 private entity with its own storage capacity located on Nevis.
274 23. As of 2010, the national debt of the Federation is 494 million EC$ (i.e. 32% of the
275 nation’s GDP in 2008). St. Kitts earned approximately EC$ 116 million from exports,
276 EC$ 23 million from re-exports but spent 877 million EC$ on imports, out of which EC$
277 61 million were used for the import of petroleum and petroleum products.8
278 24. The money that is spent on petroleum constitutes a large percentage of the budget,
279 hence rises in petroleum prices may adversely affect the development plans of the
280 federation by leaving less money available for development and social programs, such
281 as education and community development..
282 25. The role of incentives in encouraging the population of St. Kitts and Nevis to invest in
283 and use more renewable energy resources than are currently being used is a vital one.
284 Incentives seek to increase the generation and use of renewable energy sources by
285 giving help to the utility companies, investors, and consumers who may wish to use
286 renewable energy, but are mindful of the costs associated with their use. Encouraging
287 these groups to eschew or substitute a proven and reliable energy resource for an
288 alternative might prove difficult at first, but will be worth the effort.
289 26. There are different types of incentives that can be used within the federation to
290 encourage companies, investors, and citizens to generate, use, and invest in renewable
291 energy resources in addition to, or instead of fossil fuels. These incentives are largely
292 financial, while some are government mandates. Financial incentives such as tax
8
Central Statistical Office Saint Kitts and Nevis, March 2010
11
293 credits, grants, net metering can be employed to encourage renewable energy use and
294 investment.
295 27. Mandates include laws that may be passed to ensure that more renewable energy
296 resources are used. These mandates may include that electric companies must
297 generate a certain percentage of their electricity from renewable sources of energy.
298 Unlike financial incentives, mandates do not cost the government money.
299 28. Disincentives can also be employed to increase the use of renewable energy, whilst
300 decreasing the use of fossil fuels. These disincentives include plans such as increasing
301 the taxes that must be paid for gasoline that contains no alcohol content. If the gas
302 companies import regular gasoline when alcohol gasoline is available for them to import,
303 then they should be taxed more for importing regular fossil fuels.
304 29. The relative share of energy expenditures in the household budget can have a direct
305 impact on the willingness of the population to embrace the use of renewable energy, and
306 energy conservation and efficiency measures. In 2003, at US$60.00 per barrel, the
307 relative share was 4.2% (as compared with 2.1% in the UK).9
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309
310 1.3 Energy Conversion and Distribution
311 Electrical Power Generation and Distribution
312 30. There are two operating power plants in St. Kitts and Nevis, one run by the St. Kitts
313 Electricity Department (SKED) in St. Kitts Island and the other by Nevis Electricity
314 Company Limited (NEVLEC) in Nevis Island. The power plants work independently and
315 are not interconnected.
316 31. Electricity is produced entirely by diesel-fueled engines. This places St. Kitts and Nevis
317 in a vulnerable position as the islands are fully dependent on imported fossil fuel for their
318 electricity generation and transportation. Both utilities, SKED and NEVLEC, manage the
319 production, transmission, and distribution of electricity.
320 32. The installed capacity at SKED (St. Kitts Electricity Department within the Ministry of
321 Public Works, Utilities, Energy and Housing) amounts to 28.5 MW, using diesel gen-
322 sets, with a peak demand of 25.3 MW and a base load of about 16MW.10 The utility is
323 since late 2009 dealing with a shortage of capacity and relies on rented diesel generator
324 sets with an accumulated capacity of 7.5 MWe. Overall system losses are in the range of
325 about 17%.
326 33. As of mid 2009 SKED experienced problems with two newly purchased diesel generator
327 sets, where 8.8 MW (2x4.4MW) was lost due to a fire. This is during the past months
328 and currently compensated by renting 7.5 MW from Aggrekko. This results in the current
329 (2010) installed capacity of 28.0 MW (20.5 MW + 7.5MW), where the base load demand
330 is at 16.0 MW and the peak demand 25.2 MW. The annual increase of electricity
331 demand is assumed to be about 5% on a steady base, but taking into account the latest
9
Lawrence, V., 2007, An Empirical Analysis of Energy Demand and its Implications for the Caribbean
Community and Common Market (CARICOM).
10
Interview with SKED, March, 2010.
12
332 proposed development projects (tourism related) the demand may increase substantially
333 in the short-to-medium term.
334 34. As a short term solution, the Cabinet has decided to purchase 2x new generators of 3.9
335 MW each, which are being shipped to St. Kitts and Nevis. Recently Cabinet decided to
336 purchase another 2x 3.9 MW generators which means that a total of about 16MW will be
337 added to the power plant. The Government will pay for the investment. Any potential
338 renewable energy project is considered too far away and hence was not considered
339 when ordering the diesel generator sets. This also means that control equipment or
340 interface possibilities were not considered for future synchronization with renewable
341 energy technologies.
342 35. The corporatized NEVLEC produces and distributes electricity on Nevis. The diesel-
343 fuelled generation units sum to an installed capacity of 13.2 MW. However, as of August
344 2008, the largest unit with a capacity of 2.7 MW was not online and another 2.5 MW unit
345 was found unreliable.11 As of March 2010 the peak load capacity in the Nevis system is
346 9MW whereas the base load is 5 MW. This is because the Four Seasons Hotel has not
347 been operational (for about 1.5 years), as a result of Hurricane Omar, which hit the
348 Island in October of 2008. Four Seasons represents about 1.1-1.2 MW of power
349 demand. Unlike St. Kitts, the NIA pays for the electricity consumed since NEVLEC is a
350 corporatized publicly owned utility. Technical and economical / business overall losses
351 are about 17 % (most is economic i.e. non-technical).
352 36. Therefore, the estimated overall electrical installed capacity for both islands is 41.7 MW.
353 Meanwhile, peak electricity demands for electricity are 25.3 MW for Saint Kitts and 9
354 MW for Nevis. For Nevis, the lack of reliability of the 2.5 MW unit is a critical supply
355 issue. In the event that the unit does not work during peak hours, NEVLEC’s effective
356 capacity is diminished to 8.0 MW and thus, is not able to meet the peak demand (9MW).
357 37. Furthermore 24-hour self-generation is currently done only at the Marriott Hotel due to
358 the increasing frequency of black and brown-outs experienced in recent months. The
359 Marriott has an installed diesel generator capacity of 4 MW. They consume about 100-
360 120 imperial gallons per month which is purchased from Sol, that imports diesel fuel #6
361 (50% propane/50% butane) from Trinidad & Tobago. The Marriot uses economizers
362 (heat recovery system) for heating water. They have experienced considerable budget
363 restraints in the recent years/months due to the world crude price increases, now
364 oscillating around the 60-70 US$/Barrel and therefore prefer to purchase power from the
365 grid with increased introduction of renewable energy technologies to achieve cheaper
366 electricity costs.
367 38. Solar hot water systems for water heating, air conditioning or cooling have not been
368 considered or assessed in depth by the Marriott. The Marriot has some lands available,
369 for which they considered the possibilities of establishing a mini- or isolated grid with
370 supply from some wind turbines. This however was never pursued as the Marriott
371 prefers to buy power from the grid rather than operating or maintaining a power system.
372 Nevertheless, they did not exclude the possibility of participating in a grid connected
373 wind farm project (in order to generate cheaper electricity) and buying the generated
374 power via the national grid. The chief engineer of the Marriott highlighted the possibility
375 of looking into Waste-to-Energy alternatives, as it is thought that about 50 tons/day of
376 waste is generated in St. Kitts. It is also felt by said engineer that a feasibility study for
11 Interview with. NEVLEC, March, 2010.
13
377 this type of project should be performed. The Marriot would also welcome liberalization
378 on the market that enables co-generation in the hotel sector, as well as the use of solar
379 hot water and solar PV applications at a decentralized level.
380 39. Solar Home Systems with battery backup or net-metering are in principal not allowed, as
381 SKED has the monopoly for generation and distribution. In order to facilitate this, the
382 Minister would need to issue a specific license, which is currently not common practice.
383 The Taiwanese IT centre is the only facility has solar self-generation for part of its needs,
384 and this is “tolerated”, as they do not have a license.
385 40. There are no remarkable renewable energy sources being utilized at this juncture, and
386 all energy needs to be imported. Nonetheless, efforts have been made in the past few
387 years to develop and support several RET projects regarding wind and geo-thermal
388 energy, resulting in concrete project developments in the pipeline. Please see section
389 1.6 for more detail.
390
391 Transport Fuel Storage and Distribution
392 41. The GHG Inventory performed in 2004 establishes that the transportation sector is one
393 of the largest sources of GHG emissions in St. Kitts and Nevis. Given the high oil prices,
394 small amounts of consumption and geographic isolation, prices for any imported fossil
395 fuel are high.
396 42. The supply and demand for gasoline varied over the period from 2000 to 2005, with
397 imports that ranged between 3.27 and 4.86 million gallons.12 In relation to the gasoline,
398 the gradual decline is attributed primarily to the attempts by households and businesses
399 to reduce their transportation costs in light of rising oil prices, and the general increase in
400 the cost of living. Gasoline, LPG and Diesel imports over time.
401
402 43. In the Federation there are about 320 km (199 miles) of roads on the islands, of which
403 136 km (85 miles) are paved; the main roads circle each island. There are no formally
404 regulated transportation systems and most data is fairly limited. Basseterre and
405 Charlestown are the principal ports, where state-run and privately operated motorboat
406 services are maintained between St. Kitts and Nevis. There is no transport policy
407 containing RET or energy efficiency targets to make the transport sector more energy
408 efficient and to promote the use of alternative fuels or alternative transport means as
409 bicycles and cleaner public transport.
410
411 44. 99% of Liquefied Petroleum Gas (LPG) is used for cooking purposes at both residential
412 and commercial level. A small fraction is used in the dryers of the hotels. LPG is
413 imported by Sol and is distributed and sold in 20 pound and 100 pound cylinders where
414 the price is regulated to 30EC$ for the former and 140 EC$ for the latter. Large
415 commercial clients (hotels and restaurants) receive LPG at a cost of 2EC$/pound.
416
12
De Cuba, K and Rivera-Ramirez, M.H., Background discussion paper on bio-energy potential for St. Kitts and Nevis. The
General Secretariat of the Organization of American States and Energy Security Group; August 2007
14
417 1.4 Energy consumption and demand
418 Electricity consumption and costs
419 45. Examining energy use by end-use sector is key to understanding the demand for
420 petroleum products. Sectors for which petroleum use is essential include the
421 residential/domestic, industrial, transportation, commercial, and agriculture sectors.
422 Table 1 illustrates the proportions of consumption of electricity in several sectors in
423 2004.13
424
Sector St. Kitts Nevis
Domestic / residential use 41% 32%
Commercial 58% 65%
General suppliers 1% -
Street lighting - 3%
Total 100% 100%
425 Table 1 Electricity consumption categories in St. Kitts and Nevis for the year 2004
426 46. Two of the main factors affecting energy demand are the price of petroleum, and per
427 capita GDP. Demand is substantially driven by the needs of trade and commercial
428 activity and the strength of the economies of St. Kitts and Nevis.14
429 47. There are some significant non-governmental energy intensive activities in the economy
430 of the Federation. Hotels and a small industrial sector, including the St. Kitts Bottling
431 Company and the Carib Brewery are somewhat energy intensive.
432 48. St. Kitts and Nevis dependency on fossil fuels results in unreliable and currently high
433 energy prices. The electricity prices historically have been kept artificially low through a
434 subsidy scheme of the Government in the case of St. Kitts, where, since 2005 the fuel
435 surcharge was removed for residential electricity clients. In contrast in Nevis a fuel
436 surcharge is applied on top of the baseline electricity rates.
437
438
439 Electricity demand
440 49. The economy of St. Kitts and Nevis has shifted from an agricultural commodity based
441 economy to a tourism-oriented one. Due to changes in the global sugar market, activities
442 in the national sugar manufacturing industry were phased out in 2005. Since then,
443 tourism has become an increasingly important sector to the national economy. In 2009 it
13 Towards a Sustainable Energy Plan. K. De Cuba; 2006
14
Lawrence, V., 2007, An Empirical Analysis of Energy Demand and its Implications for the Caribbean
Community and Common Market (CARICOM).
15
444 contributed to 31.7% of the GDP and as such, it represents an important source of
445 employment (32.2%)15. This development and shift in national macro-economic priorities
446 has considerable implications to the national accounts and the overall energy supply,
447 demand and use patterns.
448 50. Notwithstanding the global crises and shift in macro-economic orientation, St. Kitts and
449 Nevis’ GDP growth rate at current and market prices as been positive since 1995 (in all
450 years, see Figure 2, were increased economic activities puts growing pressure on the
451 energy needs, capacity expansion planning and security of supply.
Growth rate at market prices Growth rate at current prices
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12
GDP - Growth Rate [%]
10
8
6
4
2
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Year
452
453 Figure 2. GDP yearly growth rate at current and market prices (Source: Statistics Office, 2010)
454 51. The annual increase in the Consumer Price Index (CPI) reflects steady growth
455 throughout all sectors, as shown in Figure 3. Only the increase for fuel and lighting is
456 smoothened due to the avoided fuel surcharge for electricity in the residential sector.16
15
Tourism Economic Research 2009. The World Travel & Tourism Council. URL:
http://www.wttc.org/eng/Tourism_Research/Tourism_Economic_Research/Country_Reports/Saint_Kitts_and_Nevis/
16
Central Statistical Office, SKN, March 2010
16
Fuel and Lighting All Items Transportation
20
18
16
Comsumer Price Index [%]
14
12
10
8
6
4
2
0
-2
2001 2002 2003 2004 2005 2006 2007 2008
Year
457
458 Figure 3. Consumer price index (CPI) yearly variation for selected commodities (Source: Statistics
459 Department, 2009)
460 52. Statistics indicate incremental variations in electric generation in both islands over the
461 last years. In the case of St. Kitts Island, an increase in electricity generation of about
462 45.6% was recorded between the years 2000 and 2009. In Nevis Island, this increase
463 was in the order of 64% between the years 2000 and 2009.17
464 53. Studies on electricity demand indicate that demand will increase two-fold over the next
465 decade, even in the most moderate scenarios. The following figures show the power
466 demand projections for St. Kitts and Nevis respectively up to the year 2020.
467 54. The increasing demand puts extra stress on the national economy, if not considering
468 alternative and more price stable energy sources, such as local renewable energy
469 sources as wind, solar, geothermal and/or biomass. In addition, energy efficiency
470 systems and technologies offer opportunities to reduce financial pressure and costs for
471 energy now and more importantly, for the future.
17
St.St. Kitts Electricity Department (SKED) and Nevis Electricity Department via Central Statistical Office, March 2010
17
472
18 19
473 Figure 4 Forecasted annual electricity demand for St. Kitts and Nevis Islands
474 55. Increased domestic energy demand and new developments in the rising tourism sector
475 place severe pressure on future St. Kitts and Nevis generation expansion planning and
476 production capacity. In order for the tourism industry and other economic sectors to be
477 competitive, it is required that the country relies on reliable and cleaner energy supplies
478 and increased energy efficiency levels as well as on a diversified energy matrix that
479 provides more price stability and lower energy generation cost potentials. The historical
480 evolution of the electricity generation on both Islands and the number of consumers and
481 fuel price development were:
Generated Electricity and Number of Consumers St. Kitts
200,000 20,000
Electricity [MWh]
150,000 15,000
Consumers
Number of
Generated
100,000 10,000
UNITS GENERATED MWh
50,000 NUMBER OF CONSUMERS 5,000
0 0
1994 1996 1998 2000 2002 2004 2006 2008
Year
20
482
18
Generation Expansion Plan 2005-2015. Stanley Consultants. April 2005
19
Report NWS-S-2008-33. Justification and pre-feasibility study of an electrical interconnection for St. Kitts and Nevis. E.
Brederode; September 2008.
20
St. Kitts Electricity Department (SKED) via Central Statistical Office, SKN, March 2010
18
Total Electricity Generated [MWh] - Nevis Island
60,000
50,000
Electricity Generated
40,000
[MWh]
30,000
20,000
10,000 Total Generated MWh
0
1994 1996 1998 2000 2002 2004 2006 2008
Year 21
483
Fuel Costs and Capacity (installed and peak) - St Kitts
70,000,000 42
60,000,000 36
Fuel Costs [EC$]
Capacity [MW]
50,000,000 30
40,000,000 24
30,000,000 18
20,000,000 12
10,000,000 FUEL Cost [EC$] 6
PEAK DEMAND [MW] DEMAND MW
INSTALLED CAPACITY [MW] CAPACITY MW
0 0
1994 1996 1998 2000 2002 2004 2006 2008
Year 22
484
485
Fuel Costs and Capacity (installed and peak) - St Kitts
70,000,000 42
60,000,000 36
Fuel Costs [EC$]
50,000,000 30 Capacity [MW]
40,000,000 24
30,000,000 18
20,000,000 12
10,000,000 FUEL Cost [EC$] 6
PEAK DEMAND [MW] DEMAND MW
INSTALLED CAPACITY [MW] CAPACITY MW
0 0
1994 1996 1998 2000 2002 2004 2006 2008
Year 23
486
21
Nevis Electricity Department via Central Statistical Office, SKN, March 2010
22
Nevis Electricity Department via Central Statistical Office, SKN, March 2010
23
Nevis Electricity Department via Central Statistical Office, SKN, March 2010
19
487 56. Power supply and reliability is critical for the success of this project. The management
488 team of Christophe Harbour is interested in purchasing geothermal power from Nevis.
489 They envision this power to be reliable, cheaper and to comply with their policy of
490 prioritizing green energy. They are very aware of the fact that the scale of this project
491 puts considerable pressure on SKED to secure future power capacity and the need to
492 have proper demand projections based on the different phases of the project
493 development. In the next 7 years 2 hotels with each 250 rooms, a harbour, golf course, 3
494 restaurants, 1400-1500 villas/houses etc. shall be constructed, utilizing about 20-22MW
495 within the next 5-7 years. On long-term if all villas are build they anticipate in about 15
496 years (by 2025) a need of 27MW of capacity; the occupancy will be of a seasonal
497 nature, where in high season periods it is important that sufficient power is available.
498 57. Currently the electricity demand is covered by using SKED power. On short term, for the
499 phase 1 of the project (2010-2012) the management team is considering purchasing and
500 installing about 10 MW capacity (3x 3 MWe units) and install Reverse Osmosis units to
501 desalinate water with an initial output of 300,000 gallons per day (this system depends
502 on electric pumps). For the longer term they are considering investing in a 20MUS$
503 waste water treatment plant mainly to supply water to the golf course and for secondary
504 water use. The medium/long term objective is to purchase geothermal power from Nevis
505 and they are aware of the conditions that they will have to purchase from SKED.
506
507 Transportation fuel consumption and costs
508 58. Gasoline and diesel fuel costs at the gas station on the recent years have been
509 increasing as market values have increased.
510 59. Well known is the exhaustion of natural resources and the damage to health and
511 environment caused by the use of conventional transport vehicles and technologies for
512 energy generation. Conventional methods of electricity production and transport through
513 fossil fuels are the most significant contributors to air (greenhouse gases – GHG), land
514 and water pollution in the region and in the Federation.
515 60. Other significant amounts derive from gas/diesel oil (10.72%), used in the energy
516 industries sub-sector for the production of electricity, and from jet kerosene, a memo
517 item. Smaller amounts of CO2 emissions also result from other kerosene use (0.62 % in
518 1994) and lubricants (0.86 % in 1994). 24The key sources of carbon dioxide emissions
519 only available for the year 1994 were: The Residential Sector – (41%), Road Transport
520 (37%), Commercial and Institutional Uses (10%) and Energy Industries (9%).25
521 61. The principal direct and indirect environmental challenges posed to St. Kitts and Nevis
522 are either climate change driven, such as hurricanes, flooding, sea level rise and soil
523 erosion (on the medium and long term) or man-made challenges as waste generation
524 and oil spills risks, which directly are triggered by un-sustainable energy consumption
525 and resource utilization patterns at national level.
526 62. A secure, affordable and sustainable energy supply is critical to social well-being.
527 Energy services are required for electricity generation, water supply, transportation,
24
Saint Kitts and Nevis Initial National Communication on Climate Change (2001)
25
Saint Kitts and Nevis Initial National Communication on Climate Change (2001)
20
528 healthcare, education, agricultural production and telecommunications. All of these
529 services are integral to the development of Saint Kitts and Nevis.
Importation of Petroleum Producs and Fuel Gases
45,000
MOTOR SPIRIT (GASOLINE)
40,000 DIESEL (GAS OILS)
Imported Liquid Petroleum [m3] and Gas
PROPANE
BUTANE
35,000
30,000
Fuels [t]
25,000
20,000
15,000
10,000
5,000
0
2000 2001 2002 2003 2004 2005
Year 26
530
Importation of Petroleum Producs and Fuel Gases
45,000
MOTOR SPIRIT (GASOLINE)
40,000 DIESEL (GAS OILS)
Imported Liquid Petroleum [m3] and Gas
PROPANE
BUTANE
35,000
30,000
Fuels [t]
25,000
20,000
15,000
10,000
5,000
0
2000 2001 2002 2003 2004 2005
Year 27
531
532
533 1.5 Response to the Energy Sector Challenges
534 63. The demand for petroleum is indicative of economic growth. Petroleum demand is
535 substantially driven by the strength of the economy as shown by the relationship
536 between energy demand and GDP per capita.28
26 Central Statistical Office, SKN, March 2010
27 Central Statistical Office, SKN, March 2010
21
537 64. Petroleum demand and CO2 emissions have been shown to have a strong association.
538 As per capita GDP increases, so too does the demand for petroleum. Economic growth
539 is vital to the federation in order to reduce poverty and raise the standard of living for all
540 65. A cheap/low-cost source of energy must be readily available in order for economic
541 growth to take place. At present, this energy source is petroleum. It is necessary for
542 petroleum to be used to grow and strengthen the economy, yet using petroleum to grow
543 the economy will lead to increased global warming, the effects of which will be felt
544 disproportionately by the federation. Increasing the use of petroleum increases the
545 carbon intensity of the energy supply.
546 66. This introduces a conundrum for St. Kitts and Nevis: How does the federation balance
547 its need for economic growth with its desire to reduce global warming. There are several
548 ways in which this conundrum may be addressed. These include the use of cleaner
549 alternative energy sources especially renewables.
550 67. St. Kitts and Nevis contributed a minute 0.0006 percent of the total CO2 output globally
551 in 2008. It is therefore important to note that even if the federation were to make many
552 changes even to the point of reducing its CO2 emissions output altogether, it would not
553 make much of a difference in the global warming issues facing the federation, as its
554 contribution is so minute. Global warming is by its very nature a global problem, and as
555 such, is a problem that must be addressed globally. Despite the fact that the
556 federation’s contribution to global warming is miniscule, it will still be affected
557 disproportionately by the effects of global warming.
558 68. St. Kitts and Nevis must lead by example. The heavy reliance of the federation on
559 petroleum is not the appropriate stance from an environmental perspective. Therefore,
560 the federation may adopt measures in order to show other countries, that although it
561 produces very little CO2, it is taking steps to reduce its own CO2 output, and thus the
562 harmful effect on the global climate. St. Kitts and Nevis is urged to champion the global
563 use of a low carbon intense energy supply
564 69. St. Kitts and Nevis will then be in a stronger position to lobby international organizations
565 to urge countries which contribute far greater amounts of CO2 emissions to the total
566 global CO2 output to enact some or all of the same measures, so that they too would
567 reduce their CO2 output.
568 70. St. Kitts and Nevis has been addressing these energy challenges by participating in
569 international, regional and sub-regional processes to develop an energy agenda and
570 tackle climate change by focusing on increased regional integration, diversification and
571 aiming for increased energy supply security and diversification. The following is a
572 summary of actions the Government of St. Kitts and Nevis (GoSKN) has taken in
573 responding to the energy and climate change challenges.
574 71. St. Kitts and Nevis is involved at the level of CARICOM and the OECS in the
575 development of a regional and a sub-regional energy policy where overall renewable
576 energy development targets will form a central role as response to regional
577 commitments made to the Barbados Plan of Action (BPoA) and other U.N. processes in
578 response to global climate change mitigation and adaptation.
28
Lawrence, V., 2007, An Empirical Analysis of Energy Demand and its Implications for the Caribbean
Community and Common Market (CARICOM).
22
579 72. Although St. Kitts and Nevis is a small contributor to the effects of global Climate
580 Change and therefore limited in its capacity to mitigate its effects, the GoSKN has
581 signed and ratified the Kyoto Protocol and is determined to continue the commitment to
582 the United Nations Framework Convention on Climate Change (UNFCCC) and its
583 objectives of reducing global GHG emissions, inter alia offering participation possibilities
584 in Clean Development Mechanism (CDM) and by that co-financing cleaner energy
585 measures.
586 73. The GoSKN included a series of initiatives in its First National Communication on
587 Climate Change (1994) aimed to regularize and minimize traffic flow, and consequently
588 reduce GHG emissions in the transport sector. However, a transportation Master Plan
589 integrating concepts for energy efficiency and conservation, and with wider concerns for
590 improving traffic systems and reducing traffic congestion still is required.
591 74. Notwithstanding the ratification of the Kyoto Protocol, as of 2010 no National Designated
592 Authority (NDA) under the UNFCCC hosted Clean Development Mechanism (CDM) is in
593 place as the Department does not have the capacities to participate in CDM with an own
594 NDA. For a small island state as the Federation of St. Kitts and Nevis it is difficult to
595 come up with the necessary resources to capacitate such an entity to function properly.
596 Therefore it was expressed that staff salary and resources will be needed in order to
597 make CDM participation possible. The Initial Dialogue on Climate Change under
598 UNFCCC was issued in 2001 and the 2nd Dialogue Document on Climate Change is just
599 issued and under development. The participation at the Clean Development Mechanism
600 was expressed as a clear demand taking in mind the ongoing wind and geothermal
601 projects coming online that could benefit from such support mechanism. A National
602 Focal Point, Ms Hillary Hazel (Permanent Secretary for Sustainable Development)
603 however is appointed for UNFCCC related matters and should be contacted for further
604 issues regarding this topic.
605 75. A National Energy Task Force was established in 2007 during the assessments of
606 Biomass-to-Energy Alternatives for the former sugarcane lands after the closure of the
607 St. Kitts Sugar Manufacturing Company (SSMC) and developed a draft National Energy
608 Strategy that contained most of the aspects that ought to be incorporated in a National
609 Energy Policy. Unfortunately this Task Force has been dissolved and no further actions
610 were taken to formally adopt the Energy Strategy.
611
612 1.6 Renewable Energy and Energy Efficiency Potential
613 76. St. Kitts and Nevis’s endowment of abundant indigenous renewable energy resources
614 like among other, wind, geothermal, solar and biomass (including waste) provides a key
615 advantage to explore centralized and decentralized usage of clean renewable
616 technologies.
617 77. Several renewable energy resource assessments have led to the identification of
618 renewable energy alternatives including solar, wind, waste-to-energy and geothermal as
619 potential sources. Wind and Geothermal energy development have been identified as
620 the renewable energy sources with the greatest short to medium term development
621 potential. As per 2010-12, 2x wind projects (a 5.4 MW on St. Kitts and a 2.2 MW on
622 Nevis) and a 10MW geothermal plant are in the pipeline summing up to a total of
623 19.2MW of potential renewable energy installed capacity to satisfy the projected
624 demands within 1-3 years.
23
625 78. A power purchase agreement (PPA) is being negotiated for a 5.4 MW wind farm (Phase
626 I) including access to 150 acres near the White Gate Development area on the northern
627 part of St. Kitts. The project might be commissioned in Dec 2011. With regards to this
628 project the SKED has expressed its need for a technical due diligence and assistance in
629 the planning in order to see how this could fit into the network and what the effects might
630 be on the electricity grid and management. Also for the signature of the PPA more
631 technical support as well as legal support is desired.
632 79. On Nevis a new location, the Maddens located on the south-eastern part of Nevis, is
633 being rented from a private land owner for a wind farm development. The turbines (8 x
634 275kW Vergnet Turbines) are delivered and wind farm construction is ongoing. It is
635 anticipated that by end of May the first 4x Turbines (1.1 MW) will be commissioned. The
636 plan is to erect 8x 275kW (2.2 MW) wind turbines for this wind farm, from which 1.6 MW
637 are contracted by a PPA with NEVLEC. The developer envisions the energy policy to be
638 a transparent and sustainable mean in order to create a competitive environment and to
639 fulfill tomorrow’s energy needs in a sustainable way.
640 80. The geothermal development on Nevis is ongoing. A PPA was signed between NEVLEC
641 and West Indies Power (WIP) on the 20th of April, 2009 for a 10 MW geothermal power
642 plant. As per March 22nd, 2010, the geothermal developer WIP signed a financing
643 mandate agreement for 30MUS$ with Scotia Bank with guarantee from the Export and
644 Import Bank of the U.S. (EXIM) for the financing of a 10MW geothermal plant on Nevis.
645 Minister Powell informed that NEVLEC is negotiating with SKED a PPA and are
646 discussing the organization and financing of a submarine interconnection cable between
647 the islands as pre-required documents to allow Scotia Bank to arrange financing for an
648 additional 30MW geo-thermal project to be developed by WIP in Nevis, this in order to
649 also supply the power demands of St. Kitts. Initial estimated for investment in this
650 interconnection is about 13MUS$ for a sub-marine cable of about 4 miles long. The
651 configuration of power generation, transmission and distribution is such that WIP is
652 allowed to generate power and has to transmit to NEVLEC; NEVLEC on its turn is the
653 sole distributor of power on Nevis and to St. Kitts. This with other words means, that WIP
654 cannot sell power directly to any party/entity in the Federation.
655 81. Nevis has interest in using electric cars that are charged based on geo-thermal
656 generated electricity in future. Tax incentives and duties for the introduction of such
657 alternative fuel vehicles are desirable. The priority should be to start with authorities and
658 agencies as good examples.
659
St. Kitts Nevis Regional
Fossil
Wind Solar Wind Geothermal RETs
fuel
Installed Capacity (MW) 5.4 2.2 10
Short term (1-3 years) Average capacity (MW) 2.7 0.9 9
Sum additional average
12.6
capacity (MW)
Timing 2012 2010 2011
Medium term (3-10 Installed Capacity (MW) 5 35
24
years) Average capacity (MW) 2 33
Sum additional average
35
capacity (MW)
Timing 2013 2015
Installed Capacity (MW) 20 30
Long term (10-20 Average capacity (MW) 18 28
years)
Sum additional average
46
capacity (MW)
Timing 2020 2020
660 Possible future power generation capacity and timing (including possible interconnection)
661
662
663
25
664
665
666
667
668
669
670
671
672
673 B. National Energy Policy
674
675
676
677
678
679
680
681
682
683
684
685
686
687
26
688 1. Vision and Strategy
689 1.1 Vision
690 The Federation of St. Kitts and Nevis wants “to become an island nation with a sustainable
691 energy sector where reliable, renewable, clean and affordable energy services are provided to
692 all its citizens”.
693 This will require a comprehensive transition towards a more sustainable energy balance where
694 everybody – government, utilities, businesses, NGOs, and citizens – should take part and will
695 extract benefit. This flexible and enabling policy environment or framework allows the nation to
696 transition from the status-quo or business-as-usual to “an island nation with a sustainable
697 energy sector”, and to adapt to the rapidly changing international and local energy market
698 conditions.
699 1.2 Principles and Strategy
700 The policy strategy is based on the principle that energy services must become cleaner, more
701 reliable and affordable by:
702 A) Increased diversification: increased utilization of renewable energy technologies and
703 added value generation by indigenous or regional renewable energy sources as part of
704 the energy matrix need to be considered as well as alternative energy supply routes,
705 cleaner energy sources and the power interconnection between the Islands St. Kitts and
706 Nevis or with neighboring countries. Furthermore the impacts of energy import,
707 generation, transmission, distribution and consumption on the environment, economy
708 and society have to be reduced, in particular in costs.
709 B) Promoting smarter, efficient and innovative approaches: the energy demand and
710 supply should be better synchronized and managed by building adequate knowledge
711 capacity and awareness, introducing systems and technologies that reduce energy loss,
712 change and improve energy generation and consumption patterns, and facilitate both,
713 larger scale centralized and smaller scale decentralized energy generation,
714 interconnection and supply options.
715 These strategy principles are used to delineate the policy framework or used as the energy
716 policy pillars since it is hard to predict energy demand and prioritize specific energy
717 technologies, due to changing market conditions, and technology development. Therefore it is
718 important, not to exclude any (alternative or futuristic) energy technology, and stimulate
719 continuous exploration and development of new energy technologies, supply systems, and
720 promote behavioral changes, within a continuous changing and dynamic environment. Lower
721 costs and socio-environmentally responsible energy services will stimulate business
722 opportunities for increased macro-economic competition and resilience; incentivize job creation;
723 and address national security and socio-economic challenges.
27
724 2. Policy Objectives and Statements
725 2.1 Energy Sector Management
726 The growing importance being accorded to energy issues require the need to ensure that there
727 is the ability to effectively plan and manage the national energy sector so as to assist in
728 reducing the uncertainty in decision making for the public and private sector. Through this policy
729 Government will strengthen its capacity to formulate, implement and monitor energy policies
730 and programs in a coordinated manner.
731 For this task to be fulfilled effectively it is essential that the database on all relevant aspects of
732 the energy sector is complete and consistent and continuously kept up-to-date. In addition, the
733 implementation of the National Energy Policy and the coordination of individual actions require
734 an appropriately staffed designated authority within the Government and it may be necessary to
735 create and develop new sections and add new staff positions within the public sector and
736 increase the involvement of specialized entities from the private and civil society sector.
737 The policy objective for the management of the energy sector is:
738 “Efficient and well-coordinated planning and management activities to achieve
739 sustainable supply, generation, distribution and use of energy”
740 Policy statements
741
742 1. Ensure that energy planning and management addresses the efficient, cost-effective and
743 sustainable use and management of imported and indigenous natural energy sources.
744 2. Ensure a transparent and inclusive decision-making process regarding energy sector
745 challenges and opportunities and encourage more effective co-ordination of energy
746 sector planning and management.
747 3. Improve, expand, maintain and disseminate all energy statistics and energy-relevant
748 aspects.
749 4. Promote the delivery of efficient and cost-effective energy services under a fair, coherent
750 and clear regulatory regime.
751 5. Create or designate an authority with appropriate staff and adequate resources within
752 the Government or Ministry in charge of Energy that is responsible for all national energy
753 related issues, including the design, implementation, monitoring and follow-up of the
754 National Energy Policy and coordinates its implementation with the various Government
755 Departments and national stakeholders.
756 6. Increase the know-how and awareness among stakeholders and the general public
757 relating to energy sector issues, including and in particular, conservation, efficiency and
758 use of renewable energy sources.
28
759 7. Elaborate (and regularly update) an Action and Implementation Plan detailing potential
760 energy sources and technologies, responsibilities, timescales and investments required
761 to service SKN’s growing energy demand in a sustainable manner.
762 8. Ensure that international funding and technical assistance is made available and the
763 energy policy is developed within the context of regional approaches and objectives.
764 9. Ensure the research and development and/or exploitation of new and renewable energy
765 resources and energy conservation measures leading to increasingly efficient and
766 sustainable energy services and a more competitive economy.
767
768 2.2 Diversification of Energy Supply
769 Importation of petroleum products, including diesel and gasoline as transport fuels, jet fuel and
770 kerosene as aviation and maritime fuels, and LPG for household cooking purposes, accounts
771 for a significant and steeply increasing proportion of total national imports of SKN. Moreover,
772 they are fundamental to SKN’s socio-economic development and will continue to be so for the
773 foreseeable future. Therefore maintenance of a reliable and cost-effective supply of petroleum
774 products is essential.
775 The cost of fuel imports per unit should be minimized through good supply contract negotiations
776 and management. The overall volume of petroleum derivate imports should increase at a lower
777 rate than economic growth through appropriate conservation and efficiency measures to
778 achieve decoupling and by substituting the use of petroleum with renewable energies.
779 As a clean environment and increased energy independence is crucial to the economic and
780 social well-being of the people of SKN indigenous Renewable Energy Sources (RES) in the
781 form of solar, wind, hydro and geothermal are deemed the most appropriate mid to long-term
782 alternative sources to replace imported petroleum products for electricity generation and heat
783 production in SKN. Key issues regarding renewable energy development in SKN include a lack
784 of technical expertise and relatively weak institutional structures that would allow public or
785 private investors to tap such resources in a timely manner and secure environment. The current
786 situation is further defined by insufficient knowledge about the RES potentials, lack of financial
787 commitment and support to renewable energies as well as insufficient public-private-
788 partnerships and private sector investment.
789 Furthermore irresponsible use and handling of petroleum products can cause significant
790 damage, particularly in fragile island coastal and marine environments that are heavily
791 dependant on tourism. For this reason, the proper importation, handling, storage and use of
792 petroleum products and management of waste petroleum derivates (mainly lubricants) is also
793 an important issue.
794 The goal for the energy supply and use is:
29
795 “Safe, reliable and affordable supplies of petroleum products and their efficient and
796 clean handling while in parallel significantly increasing the deployment and utilization of
797 renewable energy technologies in the Federation of St. Kitts and Nevis”
798 Policy statements
799
800 10. Ensure a secure and reliable supply of petroleum products at lowest import costs
801 available, and conforming to agreed licensing, product quality standards and
802 environmental specifications.
803 11. Encourage fuel conservation and efficient end-use, thereby achieving improved
804 decoupling of primary energy use and economic growth and reducing dependence on
805 imported petroleum products.
806 12. Ensure that adequate new and existing petroleum storage and handling facilities are
807 available throughout SKN at strategic locations and conform to standards approved for
808 SKN.
809 13. Promote the collection, transportation, environmentally responsible re-use, disposal, or
810 removal of waste oil and other petroleum by-products to minimize adverse impacts on
811 soil, ground-water, and near-shore fisheries.
812 14. Analyze the potentials of renewable energy sources on and around both islands of the
813 federation taking in account both commercially proven and future innovative
814 technologies, make site-specific assessments and elaborate project proposals.
815 15. Promote the increased use of centralized and decentralized renewable energy
816 technologies where appropriate, which are technically and commercially cost-effective
817 and environmentally friendly.
818 16. Develop local expertise in the production, installation, operation, management and
819 maintenance of both technically and economically proven and futuristic innovative
820 renewable energy systems.
821 17. Encourage private sector participation and establishment of public-private-partnerships
822 in the development, financing and management of renewable energy projects.
823 18. Provide financial and fiscal incentives that allow new Renewable Energy Technologies to
824 become market competitive, taking into account economical benefits from the use of
825 such technologies.
826 19. Investigate alternative energy supply routes and configurations and their potential cost
827 and benefits, including electrical interconnection between Nevis and St. Kitts and
828 between the Federation and neighboring nations.
829 20. Investigate the mandatory installation of solar thermal collectors for all major users of hot
830 water.
30
831
832 2.3 Electricity Generation
833 Reliable and affordable electricity is essential for the economic and social development of St.
834 Kitts and Nevis. Key issues include increasingly high costs for imported fuel for power
835 production and the option to use cost-efficient centralized and decentralized approaches to
836 electricity generation from natural or indigenous resources, such as wind, solar, waste and
837 geothermal energy.
838 Further problems arise from the nation-wide inexperience of using such resources, the partially
839 inefficient generation of electricity with older or existing diesel powered systems and the
840 inefficient consumption of electricity.
841 The goal for the electricity generation is:
842 “Safe, efficient, reliable, affordable and environmentally friendly electricity generation
843 and supply for all parts of St. Kitts and Nevis”
844 Policy statements
845
846 21. Improve the efficiency of power production, transmission and distribution to optimize
847 costs and fuel consumption
848 22. Promote sound energy efficiency and conservation practices for all consumers
849 23. Explore the existing potentials of renewable energy sources for electricity generation
850 24. Support the introduction of new commercially proven generation technologies that are
851 environmentally, economically, financially and socially proper and viable
852 25. Access imported fossil fuels at lowest costs, respecting environmental concerns and
853 supply security
854 26. Establish mechanisms that allow for a fair access to the transmission/distribution grid
855 and provide the basis for a stronger involvement of the private sector in electricity
856 generation
857 27. Establish mechanism that in tandem allow for small scale decentralized electricity
858 generation and fair access to the transmission/distribution and provide the basis for
859 household power generation.
860
861 2.4 Transportation
862 Road, air and marine transport provide an essential service that enables economic and social
863 development. The transportation sector in SKN consumes a large proportion of the imported
864 petroleum products in the form of gasoline, diesel and aviation kerosene. Clearly the
31
865 introduction of measures that conserve transport fuels and increase the efficiency of their use
866 will have long-term economic and environmental benefits for the Federation.
867 The goal for transportation is:
868 “Efficient, environmentally clean and cost-effective transportation”
869 Policy statements
870
871 28. Improve fuel conservation and efficiency for the land and marine transport sectors
872 29. Minimize the impact of petroleum product consumption in the transport sector on land,
873 atmosphere and marine environment.
874 30. Provide the basis and sufficient incentives for improvements of the public transport
875 system, traffic management and infrastructure as alternative to individual vehicle use to
876 avoid congestions and prioritize public transport alternatives.
877 31. Introduce a taxation system that gives incentives for the use of fuel-efficient passenger
878 cars and other vehicles.
879 32. Investigate consequences and benefits of substituting the use of gasoline and diesel by
880 alternative powered vehicles and imported or indigenous produced fuels.
881 33. Take adequate measures to minimize the import of outdated and/or high-consuming
882 cars.
883 34. Take adequate measures to adequately collect, monitor, analyze and report on
884 greenhouse gas emissions by the transport sector.
885 35. Introduce mechanisms for monitoring regular motor check-ups to avoid unnecessary
886 emissions and limit the fuel consumption to the lowest possible level.
887
888 2.5 Energy Use
889 Energy efficiency is a cross-cutting issue that touches the generation, distribution and
890 consumption of electricity as well as the use of fuel in the transport sector. From society’s
891 perspective, achieving greater energy efficiency generally requires less investment than does
892 new generation, and also means less energy-related environmental impact. From an individual’s
893 perspective, it can mean significant savings over the mid to long term. However, despite the
894 obvious benefits, there has historically been a lack of energy-efficiency initiatives in the
895 Federation.
896 The goal for energy use is:
897 “Minimized energy input and lowest possible energy intensity of economic services in all
898 sectors of the society”
32
899 Policy statements
900
901 36. Promote energy audits for key energy consuming sectors, such as industries, hotels,
902 restaurants and public buildings.
903 37. Provide fiscal incentives or take adequate measures to import of energy-efficient
904 appliances and minimize the import of outdated and high-consuming machinery,
905 equipments and second hand appliances.
906 38. Strengthen civil society and consumer information and awareness on purchase and
907 behavioral and technical use of energy-efficient appliances, e.g. by organizing regular
908 energy weeks.
909 39. Carry out studies on consumption patterns in different sectors of the economy to be
910 used in the design of appropriate energy-efficiency measures.
911 40. Establish or adapt building codes and standards for the improved energy efficiency and
912 use, e.g. the insulation of new buildings that will be equipped with air-conditioning
913 systems.
914 41. Consider further fiscal measures in respect of incandescent light bulbs and the grant of
915 fiscal incentives for the use of energy-saving light bulbs.
916
917
918
919
920
921
922
923
924
925
926
927
928
33
929
930
931
932 C. National Energy Action Plan
933
34
934 1. Introduction
935 To become a twin-island nation with a sustainable energy sector where reliable, clean and
936 affordable energy services are provided to all its citizens, particular actions will have to take
937 place addressing the required changes in the energy supply, consumption and management in
938 St. Kitts and Nevis.
939 This National Energy Action Plan addresses the National Energy Policy goals and the following
940 challenges:
941 How the Federation will harness or secure new energy sources to satisfy projected
942 energy demands in a cost-effective, economical, affordable and sustainable manner?
943 What configuration of the energy supply mix is most sustainable, appropriate and how to
944 materialize the transit, respecting socio-economic and environmental impacts?
945 What type of energy infrastructure is needed to increase the efficiency of energy supply,
946 generation, transmission and distribution of electricity as well as transport related fuels?
947 What investigations, audits and capacity building activities are needed in order to
948 increase the awareness on energy saving, energy efficiency and sustainable
949 consumption among the public entities, private and residential sector?
950 How to capitalize and implement the needed actions by allocating national budget or aid
951 of international and national donor programs, soft-loans, incentives and collaboration?
952
953
954
955
956
957
958
959
960
961
962
963
35
964 2. Implementing the National Energy Policy – Tools and Actions
965 The purpose of this National Energy Action Plan is proposing the next series of actions to
966 materialize the vision and strategy for SKN’s energy future for the period 2010 until 2030. It
967 contains short (1-5 years), medium (5-10 years), and long (10-20 years) term actions designed
968 to enhance the implementation of the policy objectives of St. Kitts and Nevis’ National Energy
969 Policy (NEP).
970 2.1 Energy Sector Management
971 The policy objective for the management of the energy sector is:
972 “Efficient and well-coordinated planning and management activities to achieve
973 sustainable supply, generation, distribution and use of energy”
974 To achieve an efficient and well-coordinated planning and management of the energy sector the
975 principal stakeholders and market players are to be identified and a clear energy sector
976 management structure be delineated where their rights and responsibilities are described.
977 2.1.1 Institutional requirements
978 National Energy Committee - A high-level advisory National Energy Commission will provide
979 advice on energy-related issues and activities by, inter alia, creating a discussion forum among
980 state institutions, the private sector and NGOs/Civil Society representatives. It will further advise
981 on, and make proposals for, adequate instruments and strategies, so that the overall objectives
982 of the energy sector reform are achieved in the shortest possible time.
983 It will moreover function as an observer and regulatory body at the national level in order to
984 assist the Ministry responsible for Energy and other national authorities in the reasonable
985 implementation and enforcement of energy related policies and laws.
986 The National Energy Commission will propose standards for service quality and pricing
987 systems; assist the Ministry in charge for Energy in formulating policies and relevant laws, as
988 well as to act as arbitration platform for disputes between private sector, public sector and civil
989 society. The commission shall execute due diligences for proposed energy and/or transport
990 sector projects in order to assist the government of SKN and especially the licensing bodies to
991 take appropriate decisions.
992 The high-level advisory board will be constituted by representatives of the Ministries in charge of
993 Energy, Public Utilities, Finance, Transport, Tourism, and Chamber of Commerce, among
994 others. The Energy Commission will be mandated to advice the Ministry in charge of Energy.
995 Action 1: The Government of SKN (Cabinet) will establish a National Energy
996 Commission by mid-2010 composed of senior representatives of the Ministry in charge
997 of Energy, Public Utilities, Environment, Finance, Transport, Tourism, the Chamber of
998 Commerce, the Civil Society and others from both the Federal Government and Nevis
999 Island Administration to function as a high-level advisory board to the Ministry in charge
1000 of Energy on the overall objectives of the energy sector reform and strategy.
1001 Time scale: Short Term
36
1002 The overall energy sector structure layout is important to understand the decision-making tree,
1003 responsibilities and authority allocation of government Ministries, Departments, the Electric
1004 Power Utilities, Independent Power Producers and other players in the sector.
1005
1006 Action X: The National Energy Committee in collaboration with the Ministry of Public
1007 Works, Utilities, Energy and Housing (PWUEH) will facilitate a multi-dialogue process
1008 among government ministries and departments to determine by mid-2010 the final layout
1009 of the decision making tree (hierarchy) and the responsibilities and authority allocation to
1010 the several ministries and government departments relevant to the national energy
1011 sector.
1012 Time Scale: Short Term
1013 Further list of proposed responsibilities and actions:
1014 1. The terms and conditions for the issuance of licenses to generate, transmit and distribute
1015 electricity from conventional, renewable energy sources as well as for self-consumption;
1016 2. The terms and conditions for the issuance of licenses to Independent Power Producers
1017 (IPPs) for the installation and operation of renewable energy power generation facilities;
1018 3. Assist the Ministries in charge for Energy in the formulation of a reasonable quota system
1019 for renewable energy participation and monitor the enforcement and functionality of such
1020 system;
1021 4. Elaborate a multi-annual National Energy Plan to be reviewed every 3 years in order to
1022 anticipate on changes and trends in the national market, socio-economic conditions, etc.
1023 5. Undertake the economic regulation of the sector;
1024 6. Approve tariff structures and rates for all customers, as well as for back-up and reserve
1025 power in the case of self-generators;
1026 7. Determine the particular instances for net-metering in cases of small-scale self-
1027 generation, and the tariffs for delivery of excess electricity to the grid;
1028 8. Establish and monitor tendering procedures for any major investments in the power
1029 generation sector where this is necessary;
1030 9. Set and monitor quality of service standards and reliability criteria for all licensees;
1031 10. Elaborate a sustainability weighting matrix to be applied to new projects considering
1032 lowest energy generation costs, best environmental practices and highest social
1033 soundness, also respecting security of supply issues.
1034 11. Act as arbitrator in all cases of disputes between electric utilities and end-consumers or
1035 between any other parties engaged in the electricity sector; and
1036 12. Integration of electrical distribution networks in the entire Federation.
37
1037 13. Guarantee the adequate administration and streamlining between St. Kitts and Nevis
1038 electricity sectors. Examples for that are: concessions and licensing for e.g. solar water
1039 heater, Solar PV home systems, self- / co-generation etc. to create a fair business
1040 environment. Also mortgage loans should include beneficial interest rates for residents
1041 wanting to incorporate sustainable building codes or RE/EE systems.
1042
1043 Energy Unit or Department - Within the Government of St. Kitts and Nevis, since January of
1044 2010 the principal Ministry in charge of Energy is the Ministry of Public Works, Utilities, Energy
1045 and Housing (PWUEH). The Ministry has the executive responsibility for formulating and
1046 monitoring the implementation of the national energy policy. And will consolidate this
1047 responsibility by establishing a Unit or Department dedicated to Energy by taking the following
1048 action.
1049 Action 2: The Ministry of PWUEH will establish an Energy Unit or Department by mid-
1050 2010 with appropriate staff and mandates to coordinate and supervise the
1051 implementation of the national energy policy and execute, monitor and evaluate the
1052 resulting actions.
1053 Time scale: Short Term
1054 The St. Kitts Electricity Department (SKED) has currently exclusive rights to generate, transmit
1055 and distribute electricity on the island of St. Kitts. Since 2008, the transition of the SKED as
1056 Department within the Ministry in charge of Energy into a state-owned company under corporate
1057 laws is being pursued with the premise of creating management and financial independence to
1058 increase the production efficiency and improve generation expansion planning and finance.
1059 Action X: The Ministry of PWUEH via its Energy Unit or Department in close
1060 collaboration with SKED will guide and finalize the corporatization process of SKED by
1061 the final quarter of 2010.
1062 Time scale: Short Term
1063 Further list of proposed responsibilities and actions:
1064 1. Identify the current types of energy being used in St. Kitts and Nevis and the capacity of
1065 this energy. Gather information on the capacity, efficiency, price performance, and
1066 investment costs of renewable energy technologies.
1067 2. Carry out a comprehensive and detailed examination of the factors (such as GDP, price
1068 of energy) that influence the demand for energy in St. Kitts and Nevis. Further examine
1069 and analyse the impact of each of these factors, and their significance to and
1070 implications for St. Kitts and Nevis.
1071 3. Examine the current regulatory framework for energy policy in St. Kitts and Nevis and
1072 the work needed to be done to complete this framework.
1073 4. Research which countries and companies are the leaders in the different types of
1074 renewable energy technologies. Determine how St. Kitts and Nevis can form meaningful
38
1075 relationships with these companies and countries. Look at how this can be done within
1076 the energy policy framework.
1077 5. Firmly establish and examine the status quo of energy use by type. Carry out analysis
1078 to determine what the mix of (conventional) fossil fuels and renewable energy will be,
1079 that is, what St. Kitts and Nevis’ energy portfolio will look like. It is important to examine
1080 realistic ways of decreasing the reliance of St. Kitts and Nevis on petroleum. Determine
1081 how to get greater cooperation between energy producers (e.g. Trinidad and Tobago)
1082 and St. Kitts and Nevis.
1083 6. Examine St. Kitts and Nevis’ current heavy reliance on petroleum, and the costs and
1084 policy implications of this reliance, and what this means for energy security in St. Kitts
1085 and Nevis.
1086 7. Examine the possibilities for energy substitution, and the impact on the environment,
1087 economy and society. As SIDS, we are and will continue to be disproportionately
1088 affected by global warming, although we produce very little of the global CO 2 output.
1089 Examine the potential to create policy (such as adopting the use of a low carbon intense
1090 energy supply, and lobbying international organisations and high CO2 producing
1091 countries to do the same) to help to deal with these issues on an international scale.
1092 Examine the important environmental components to be included in an energy policy.
1093 8. Look at the role of financial incentives and disincentives, as well as government
1094 mandates in increasing the generation, use, and investment in renewable energy in St.
1095 Kitts and Nevis.
1096 9. Overseeing and coordinating activities relating to energy and the environment;
1097 10. Acting as principal body to issue licenses for all public and private electricity generation
1098 services;
1099 11. Acting as principal body to issue licenses for fossil fuel imports;
1100 12. Address all factors that influence the quality of energy services delivered;
1101 13. Act as first contact point in all cases of complaints by energy consumers, helping to
1102 resolve such disputes between the parties involved and involving the Energy
1103 Commission in cases where arbitration is needed;
1104 14. Issue licenses for electricity generation based on renewable energy;
1105 15. Energy policy formulation, national energy planning and energy sector coordination with
1106 increasing emphasis on cleaner energy generation;
1107 16. Mandating and coordination of studies on energy resources, generation, transformation
1108 and marketing in close cooperation with the responsible operating agencies;
1109 17. The compilation of basic energy information useful for sectoral planning and evaluating
1110 the impact of selected policy initiatives;
1111 18. Fostering the development of appropriate legislation for the sectors electricity,
1112 transportation, petroleum and gas through a participatory and consultative process with
1113 focus on cheaper and more sustainable services;
1114 19. Fostering the development and adoption of appropriate energy efficiency standards and
1115 programs including safety standards and best practices;
1116 20. Promoting and monitoring power sector demand-side management programs and other
1117 programs designed to encourage the purchase and adoption of energy-efficient
1118 appliances by final energy users;
39
1119 21. Encouraging private sector participation in renewable energy and energy efficiency
1120 technologies relevant to St. Kitts and Nevis;
1121 22. Organizing energy awareness campaigns and capacity building events and
1122 disseminating appropriate information to private and public sector;
1123 23. Advising the Cabinet on matters related to the regulation of the whole energy sector;
1124 24. Defining reasonable quotas for renewable energy participation in the Federation’s
1125 energy matrix;
1126 25. In cases where intervention is needed it shall take corrective actions like private-sector
1127 project tendering for renewable energy and enforcing SKED as well as NEVLEC to
1128 purchase electricity from such tendered IPPs at reasonable tariffs;
1129 26. Enforcing all governmental Institutions to improve the payment morality and to behave in
1130 the same way as other electricity clients in front of SKED and NEVLEC;
1131 27. Cooperating with national and regional NGOs or institutions active in the energy and
1132 environmental sector to increase the dialogue and organize dissemination of relevant
1133 information or capacity building programs.
1134
1135 National Statistics Department - The National Statistics Department under the Ministry of
1136 Finance, Sustainable Development and Human Resource Development (FSDHRD) currently
1137 has data as most recent as up to 2008, which can be accessed. The department collects
1138 relevant data from the entities in charge of specific themes. With respect to energy that means
1139 that most data is collected from St. Kitts Electricity Department (SKED) and NEVLEC. In general
1140 only basic data is collected for which any more detailed data request should be made directly to
1141 SKED and NEVLEC or data must be requested for defined purposes. The Statistics Department
1142 is willing to collect more data with regards to energy and climate change themes, and develop
1143 specific indices or databases, if that is demanded by the Minister. However, they need to build
1144 up capacity regarding the relevance, interpretation, need and methods to collect specific data
1145 for specific purposes. Also they would need additional software and IT equipment for doing so.
1146 The Statistics Department will be responsible to support the Energy Unit or Department in the
1147 collection of relevant energy data on a regular basis in order to support the planning and
1148 evaluation activities. It will be in charge of compiling and disseminating quarterly national energy
1149 statistics digest and annual energy status reports in close collaboration with the Energy Unit or
1150 Department of the Ministry of PWUEH.
1151 Moreover the National Statistics Department will establish a database of Measurable and
1152 Transparent Sustainable Energy and Sustainable Development Indicators to be recorded and
1153 assessed on a periodic interval, in order to prove the success and effectiveness of the NEP
1154 establishment and any subsequent action plans.
1155 Action 3: The Ministry of FSDHRD in collaboration with the Energy Unit or Department
1156 of the Ministry of PWUEH will appropriately staff and strengthen it by providing training
1157 and supplying adequate tools to the National Statistics Department by mid-2010 and
1158 modify its mandates to collect, compile and disseminate relevant energy data on a
1159 regular basis in order to support the planning and evaluation of national energy sector
1160 activities.
1161 Time scale: Short Term
40
1162
1163 Department of Planning and Environment - The Department of Planning and Environment
1164 under the Ministry of Finance, Sustainable Development and Human Resource Development
1165 identified some key issues to be addressed in the National Energy Policy which are the
1166 resources available for a proper management and planning of wind, geothermal or other
1167 renewable energy projects. More efforts and resources need to be available especially for the
1168 elaboration of special and legal planning tools to find the appropriate land to be licensed for any
1169 proposed renewable energy project. Global Information System (GIS) tools and mapping should
1170 be used as steering and planning instruments for land use allocation, including agricultural
1171 activities, settlements, tourism, etc. There is in-house capacity in the Planning Unit to use the
1172 GIS tools, but software licenses have expired (and are expensive to renew) and have been
1173 limiting the staff to elaborate further mapping exercises.
1174 The Department is of the view that an Environmental Impact Assessment (EIA) should become
1175 a standard license requirement for any future energy related planning development. An EIA has
1176 been requested and is submitted for review regarding the Wind Farm which is being proposed
1177 on St. Kitts which may lead to additional months of delay in finalizing the wind project, but taking
1178 in account aesthetical and environmental issues is important for the public acceptance and
1179 sustainability of the project which is well understood by the developer.
1180 The Department of Planning and Environment shall monitor and enforce the existing
1181 environmental regulations to planning, development and operation of centralized and
1182 decentralized electricity generation and distribution facilities and the import, use and disposal of
1183 transport vehicles.
1184 In close collaboration with the Ministry of PWUEH shall promote the cleaner generation and
1185 usage of energy for reduced socio-environmental impacts. Moreover it shall act as primary
1186 government body to address climate change mitigation and adaptation measures that may
1187 relate to the energy sector.
1188 Action X: The Department of Planning and Environment of the Ministry of FSDHRD will in
1189 close collaboration with the Energy Unit or Department identify cleaner energy production
1190 projects potential in the Federation and facilitate the participation in the Clean
1191 Development Mechanism to generate valuable Emission Certificates that help to
1192 overcome financial and other barriers of new and modern technology to be installed.
1193 Time scale: Short term
1194 Further list of proposed responsibilities and actions:
1195 a. Assist the Energy Unit or Department in organizing and leading awareness rising
1196 programs and capacity building events related to the efficient utilization of energy, building
1197 codes, waste minimization and the impacts of climate change;
41
1198 b. Reinforcing commitments to, participation in and compliance to relevant International
1199 Environmental Treaties and Conventions, in order to derive advantages of international
1200 collaborations; e.g. the Clean Development Mechanism and other Carbon Trading
1201 Schemes under the Kyoto Protocol.
1202 c. Elaborating environmental standards for the sectors of building and construction planning,
1203 natural energy resource development planning, solid and liquid waste management of
1204 energy related activities in order to reduce the impact on natural endangered habitats and
1205 the sustainable development of the national society;
1206 d. Increasing the Federations efforts and activities on climate change mitigation and
1207 adoption measures;
1208 e. Establishing environmental standards and practices to be respected within the energy
1209 sector related to for example oil storage and logistics, any energy transmission and
1210 distribution losses, generation sites, end-of-pipe emission reductions by catalysts and
1211 waste heat recovery;
1212 f. Performing environmental benchmarks and sustainability analyses of renewable and
1213 alternative fuel technologies to be used during decision making processes of for example
1214 tender and licensing procedures;
1215 g. Evaluation, planning and implementation of waste recycling, reuse and energetic
1216 utilization systems.
1217 h. When regarding RETs planning, buffer zones should be introduced to prevent
1218 noise/aesthetic nuisance.
1219 i. Environmental Impacts Assessment for Wind Development should take in account routes
1220 of migratory birds and other specific international agreements for the protection of
1221 biodiversity and the environment.
1222
1223 2.1.2 Financing requirements
1224 a. The relevant Institutions as the Ministry in charge of Energy, of Public Utilities, of
1225 Environment, the Chamber of Commerce and others will strengthen their role in the
1226 contribution to a sustainable and efficient planning of the energy sector by:
1227 b. Taking efforts to gain access to international and national funds and grant schemes;
1228 c. Taking efforts to gain access to international foreign investments;
1229 d. Taking efforts to increase jointly performed international research activities;
1230 e. Setting in motion capacity building programs in fields related to energy generation and
1231 distribution;
1232 f. Revisiting St. Kitts and Nevis Initial National Communication on Climate Change (2001)
1233 and establishment of the National Designated Authority within the Ministry for
42
1234 Environment, in order to participate in the Clean Development Mechanism under Kyoto
1235 and its following protocols.
1236 g. The Ministry of Energy, of Commerce and the Chamber of Commerce will elaborate an
1237 incentive scheme to attract local and foreign investments in renewable energies. This
1238 could include, inter alia, tax exemption for investments in renewable energy projects,
1239 removing import duties, soft-loan programs for households applications as solar hot water
1240 systems and solar PV home systems reinsured by the National Government or by
1241 International Organizations and Development Banks.
1242 h. Furthermore there should be a better streamlining of international assistance and
1243 cooperation, where an example was given of the EU-NAO (National Authorizing Officer)
1244 that both helps in identifying needs and prevents overlap of initiatives funded by the EU.
1245 In the case of SKN, PS Hillary Hazel is currently the NAO.
1246
1247 2.1.3 Future energy structure, market and integration
1248 It is hard to predict what the configuration of the energy market may be for St. Kitts and Nevis
1249 20 years from now. In 2030 the Federation may form part of a Caribbean wide electrical grid
1250 network where further integration both in physical as regulatory sense is unavoidable and where
1251 market players are of a mix of national and international nature with large strategically located
1252 centralized power plant capacity supplying power within and beyond the region.
1253 The role of the government may shift from a centralized planning role in determining the national
1254 energy mix to one having private sector taking the central role where the energy mix is
1255 determined by market conditions and developments. This will demand considerable involvement
1256 and commitment of the national government in the regional planning and regulatory process to
1257 guarantee that the energy services provided to the nations’ citizens are clean, reliable and
1258 affordable.
1259 a. Implement a legal framework necessary to explore renewable energy sources as well as
1260 to develop renewable energy projects and where necessary to attract foreign investment
1261 and know-how regarding this sector;
1262 b. Develop a pillowed position on climate change issues at the regional and international
1263 levels and hence increase the base for integration to regional and international agencies,
1264 treaties and conventions.
1265 c. Maintain a separate entity for managing of the energy-distribution grid, not being in the
1266 energy generation business itself.
1267 d. Institute an independent and permanent Energy Regulatory Board (ERB) for controlling
1268 energy market specifics like energy pricing for consumers, producers and distributor. It
1269 will create an environment for reliable energy availability (spinning reserve).
1270 e. Liberalization of the local energy generation market.
43
1271 f. Set up an independently operated fund (financed by local and/or foreign financial
1272 institutions) to create incentive programs, in order to motivate installation of sustainable
1273 energy generation equipment using locally available natural energy resources.
1274 g. Have the managing entity of the energy-distribution grid; migrate to state-of-the-art energy
1275 registration meters, able to register energy in both directions, allowing citizens to sell their
1276 surplus ´green energy´ through the existing distribution-grid.
1277 h. Institute ongoing educational programs to educate the community for better ways to
1278 manage its energy-usage, bringing about a mentality change towards responsible energy
1279 use.
1280 i. Include awareness programs on energy usage to the curricula for all levels of schools.
1281 This could be done by placing alternative energy generating equipment on roofs at
1282 schools and community centers.
1283 j. Make available technical know-how on sustainable energy generating equipment for all
1284 interested citizens.
1285 k. Allow for considerable import-duty cuts, especially for, but not limited to, vehicles running
1286 totally green. Increase import-duty levels for vehicles running on fossil fuels and
1287 derivatives.
1288 l. Create fiscal incentives for implementation of equipment using natural sustainable energy
1289 resources.
1290 m. Construct bicycles paths, in order to diminish the need to drive motorized vehicles.
1291 Instead of more roads.
1292 n. Embrace sustainable energy powered vehicles for both private and public transportation
1293 instead of more or wider roads.
1294 o. The Government will establish a system based on incremental periodic quotas for the
1295 contribution of electricity from alternative energy sources to the overall electricity matrix,
1296 on- and off-grid.
1297 p. Where the renewable energy quota set for a specific year is not achieved, the Regulatory
1298 Entity for both, the St. Kitts Island and the Nevis Island, will be mandated to prepare a
1299 public tender in order to invite IPPs for the installation and operation of renewable
1300 electricity generation facilities that are designed and sized to fulfill the specific obligation
1301 of that year.
1302 q. The Authority in charge of Public Utilities is obliged to provide the framework for a wider
1303 access to the electricity network for Independent Renewable Energy Power Producers,
1304 especially to substitute electricity generated by SKED and NEVLEC or the historically
1305 contracted IPPs.
44
1306 r. The Government will take a lead in the application of small solar PV systems by equipping
1307 its most suitable public buildings with such technology.
1308 s. The Government will direct efforts to minimize the risk of ecological damage derived from
1309 possible spills related to the transport of liquid petroleum fuels. Therefore sustainability
1310 criteria are to be defined, enabling to address most effective and sustainable measures
1311 and actions. Also, in the development of renewable energy projects (e.g. impact on birds
1312 and bats from wind turbines, diminish impact of geothermal development on ecosystem,
1313 etc).
1314 t. A specific section of the NEP should be dedicated to disaster management, in the sense
1315 what kind of provision should be in place to protect or supply power after hurricanes or
1316 other natural disasters. The National Emergency Management Agency (NEMA) should be
1317 part of the discussion around this topic. Focus can be dedicated to the type of materials
1318 used for RETs and their related infrastructure and what kind of back-up systems should
1319 be in place. Decentralization of power generation is a good tool to increase back-up
1320 capacity at the national level.
1321 u. One should consider and investigate the possibility for underground electric grid to
1322 prevent public hazards after bad weather events.
1323 v. Proper public awareness should be guaranteed both in the development of the NEP as for
1324 the implementation of the NEP. This can be guaranteed by involving the local TV and
1325 Radio to provide on a regular basis updates on the developments in the Energy Sector.
1326 Also education in basic ways on how to save energy is useful.
1327
1328 2.2 Diversification of Energy Supply
1329 A critical factor to materialize the geothermal power plans is the implementation of an
1330 interconnection power cable between St. Kitts and Nevis.
1331 Once inter-federal island interconnection is in place, the indigenous renewable energy
1332 resources can be rationally and cost-effectively be explored and clean, more reliable and better
1333 affordable electricity be generated and distributed within the Federation and to all its citizens
1334 and sectors.
1335 a. In the light of promoting sustainable energy generation, the Energy Unit or Department
1336 will foster the elaboration of resource assessments and pre-feasibility studies on the
1337 potentials of technologies to generate energy from alternative energy sources. These
1338 efforts will focus on, but not be limited to:
1339 o Wind power;
1340 o Geothermal power;
1341 o Solar power;
1342 o Biomass and Waste-to-Energy;
45
1343 o Hydro and Tidal Energy;
1344 o etc.
1345 b. The Government will direct efforts to diversify the sources of petroleum products supply
1346 for electricity generation in order to make the country less vulnerable in case of political
1347 interventions or any other factors which could disrupt the flow of oil derivates to the
1348 islands.
1349 c. The Government’s foreign trade policy will seek to strengthen bilateral relationships with
1350 energy supplying countries within and external to the region and establish medium- and
1351 long-term energy import obligations.
1352 d. The Energy Unit or Department of the Ministry of PWUEH and the Ministry of Finance will
1353 review the current method of adjusting the fossil fuels surcharge or taxes and will evaluate
1354 the appropriateness of such calculation methods. In addition taxation will be revised to
1355 ensure a domestic fuel price that reflects international price movements and some
1356 subsidies may be removed.
1357 e. The Energy Unit or Department will establish standards and licensing requirements for the
1358 operation of oil-related operations taking in account recommendations by the National
1359 Energy Commission. These standards will address environmental and safety concerns as
1360 well as consumer protection and affordable pricing.
1361
1362 2.3 Electricity Generation
1363 The goal for the electricity generation is:
1364 “Safe, efficient, reliable, affordable and environmentally friendly electricity generation
1365 and supply for all parts of St. Kitts and Nevis”
1366 a. The Government will in cooperation with development banks and/or international
1367 institutions strive to launch a soft-loan program for the establishment of small distributed
1368 solar PV systems and solar water heating systems that are affordable to low and
1369 average income households.
1370 b. SKED and NEVLEC will investigate the efficiency of their generation, transmission and
1371 distribution system in order to provide means to lower the present losses.
1372 c. The Government will take a lead in the application of solar water heating systems by
1373 equipping its public buildings with such technology. The generated heat shall be used for
1374 as much as possible purposes as heating water or driving air conditioning installations.
1375 d. The Government will seek to participate in regional efforts to explore the viability of
1376 alternative fuels (ethanol, bio-diesel, synthetic diesel, etc.) for power generation or
1377 transport fuel in order to ensure the nation’s energy diversification, cheaper and cleaner
1378 utilization targets.
1379 e. The Government will foster a resource assessment on municipal and industrial waste
1380 streams as well as sustainable agricultural or forest residues with regards to their
1381 suitability for sustainable power generation.
1382 f. Moreover Due Diligence and technical assistance need to take place with regards to any
1383 wind energy and geothermal projects planned in order to optimally integrate and them
1384 into the existing grid and operational schemes as well as technical conditions. For
46
1385 example there is a need for maintenance schemes of the existing diesel generators
1386 aligned to those months and hours in that less wind is expected, for which narrow
1387 investigation needs to take place as well as interpretation and introduction or training
1388 towards the energy department and operational staff of SKED.
1389
1390
1391 St. Kitts Electricity Department (SKED) - The St. Kitts Electricity Department (SKED) has the
1392 exclusive right to generate, transfer and distribute electricity in St Kitts Island. They are a
1393 Department within the Ministry of Public Works, Utilities, Energy and Housing.
1394
1395 Corporatization of SKED is ongoing and the formal implementation of the new status is
1396 anticipated to take place by mid of 2010. In course of the corporatization of SKED, there will be
1397 a need to strengthen the SKED by providing capacity building, in particular regarding the use of
1398 data collection systems, data sharing, and data interpretation and analysis. Proper access and
1399 management of information will form the base for objective decision making that will benefit the
1400 corporatization process and the transition to this.
1401
1402
1403
1404 Nevis Electricity Company (NEVLEC) -
1405 The production and distribution management of electricity in the island of Nevis shall remain the
1406 exclusive right of Nevis public-owned utility corporation “Nevis Electricity Company Limited”.
1407 1. On the supply side, efficiency improvements shall be enforced focusing on fossil fuel
1408 generators and on transmission. SKED and NEVLEC shall ensure to achieve a minimum
1409 efficiency level for power generation set by the National Energy Commission, e.g.
1410 acquiring newer technologies or changed operation standards.
1411
1412
1413 Independent Power Producers (IPPs) -
1414 Currently independent power producers only can exist in SKN, if having a Build Operate and
1415 Transfer (BOT) contract with either SKED or NEVLEC. License is issued by SKED or NEVLEC
1416 only in specific situations as in case of energy shortage.
1417
1418 Tourism Industry
1419 In principal a clean island and an intact nature are the principle assets of the Federation and is
1420 what makes it attractive for high-income tourism. That is in the end what counts as business for
1421 Marriott and other hotel businesses. Therefore whatever is good for the nature is good for the
1422 tourism industry, even if the costs for services, energy or activities might be slightly higher. The
1423 clients and consumers (tourists) will be more than willing to pay an extra fee if they know that
1424 the island is being cared for and therefore is taking actions in developing in a sustainable way.
47
1425 Marriot - Regarding ways in which the Marriot could contribute in promoting RE development in
1426 the Federation is looking into possibilities to sponsor meetings rooms for RE/EE related
1427 conferences and workshops or reduced room fees for visiting experts working in this area.
1428 The Ministry of Tourism - The Ministry of Tourism shall incorporate the National Energy Plan
1429 into its strategy for the development of a more sustainable tourism sector in St. Kitts and Nevis.
1430 Specific emphasis shall be laid on issues as:
1431 a. Increased energy efficiency and utilization of solar water heaters and other thermal
1432 sources to be used in either heating or cooling purposes;
1433 b. Energy efficiency increases by new technology as for example heat exchanges and
1434 adsorption chilling for air conditioning;
1435 c. Utilization of combined heat-and-power plants in the sector for self-generation purposes
1436 of heat and electricity;
1437 d. Recycling at the source in order to support and ease the utilization of generated waste
1438 streams;
1439 e. Utilize cleaner fuels as for example LPG or LNG;
1440 f. Evaluation of a natural resource utilization levy for high-class energy intensive tourism;
1441 g. Organizing capacity building events to especially small hotels that lack own concierge
1442 services.
1443 h. Organizing the collection of grease, fats and oils from hotels and restaurants in order to
1444 convert them into bio-diesel.
1445 i. The Ministry of Tourism shall propose a strategic plan action plan for 10 years addressing
1446 the above issues. This plan shall be elaborated in collaboration with the Energy
1447 Commission and in accordance to the objectives defined by the NEP. The Plan will be
1448 elaborated with the support of the Energy Commission, Energy Unit and the National
1449 Statistics Department. The plan will be reviewed each 3 years in order to evaluate the
1450 proceedings and progress made. If necessary the plan will be changed or instruments
1451 shall be developed to support the achievement of the plans’ objectives.
1452
1453 2.4 Transportation
1454 The goal for transportation is:
1455 “Efficient, environmentally clean and cost-effective transportation”
1456 The Ministry in charge of Transport in close collaboration with the Energy Unit or Department of
1457 the Ministry of PWUEH will be tasked to promote access to sustainable and energy efficient
1458 mobility on and between islands in the Federation.
48
1459 The Government strategy will be focused on maintaining a level of adequate taxation on motor
1460 vehicles and on gasoline and automotive diesel fuel, which will encourage the use of public
1461 transportation and paying greater attention to fuel consumption and assessing alternative forms
1462 of mobility and vehicles. Improved vehicle maintenance is also of great importance in ensuring
1463 optimum transportation efficiencies.
1464 In parallel public transport patterns and efficiency need to be increased as well as the traffic
1465 routing system improved. Pedestrians and bicyclists shall be supported by infrastructural and
1466 safety improvements. Therefore the Ministry in charge of Transport will be responsible and will
1467 take the lead on achieving the transport policy objectives. The Ministry in charge of Transport
1468 will:
1469 Action 1: Execute by 3rd quarter of 2010 a GAP analysis reviewing the technical and
1470 investment needs for improving the effectiveness and efficiency of the national transport
1471 infrastructure and traffic routing systems.
1472 Time scale: Short term
1473 Action X: Execute by the last quarter of 2011 an assessment of the required
1474 infrastructure for the provision of cleaner alternative fuels or charging stations for electric
1475 vehicles within the road transport.
1476 Time scale: Short term
1477 Action X: Execute by the 1st quarter of 2011 an assessment of alternative traffic systems
1478 that allow for more pedestrians and bicyclers to use the public infrastructure.
1479 Time scale: Short term
1480 Action X: Review by the last quarter of 2010 the current taxation practices and assess
1481 where possible alternative practices can be introduced to support the use of cleaner
1482 transportation means.
1483 Time scale: Short term
1484 Action X: Execute an assessment of opportunities and challenges for alternative and
1485 sustainable transport interconnection between the islands of St. Kitts and Nevis.
1486 Time scale: Short term
1487 Further list of proposed responsibilities and actions:
1488 a. The Ministry in charge of Energy, of Transport and of Commerce will discourage the use
1489 of less efficient cars by adjusting tax levied on vehicles and fuels.
1490 o Increasing taxation on vehicles based on engine displacement or on CO2 emissions;
1491 o Introduce beneficial tax systems to promote the purchase of more efficient vehicles,
1492 including the new generation of hybrid and flex-fuel vehicles or electric cars.
49
1493 b. The Ministry in charge of Energy, of Transport and of Commerce will perform a campaign
1494 to promote the use of non- or less pollutant transportation methods.
1495 c. The Ministry in charge of Energy, of Transport and of Commerce will introduce obligatory
1496 inspections and utilization of catalysts or particle filters, which will also, in addition to
1497 current safety considerations, impose and control maximum levels of harmful emissions,
1498 the reduction of which will also yield benefits in fuel consumption.
1499 d. The Government will take actions to ban high sulfur containing diesel and replacing this
1500 by cleaner diesel.
1501 e. The Government will analyze the potential, environmental footprint and cost effectiveness
1502 of blending fossil fuels with up to 10% of bio-fuels.
1503 f. The Government will analyze the potential of increased utilization of imported LPG and
1504 LNG for the transport sector.
1505 g. The Government will investigate the utilization patterns of potential passengers in the
1506 public transport to increase the attractiveness, efficiency and safety of the offered service.
1507 h. The Ministry in charge of Transport and the municipal authorities will investigate
1508 opportunities of
1509 o Developing and establishing an energy efficient city transportation system and
1510 modernization of the public transportation system;
1511 o Optimization of the routs and operation times of the public transportation system;
1512 o Tendering and exclusive licensing for the routes covered by public transport;
1513 o Improving the traffic management by utilizing feasible measures as controlled traffic
1514 lights and roundabouts to harmonize traffic flow.
1515 o Increase the utilization of car-pooling spots.
1516 o Provide more safety and infrastructure for pedestrians and bicyclers.
1517 i. The Ministry of Transport will incorporate programs to promote good driver habits as:
1518 o Prompt consumers to check tire pressure levels at regular intervals;
1519 o Facilitate the improved training of automotive mechanics and driving teachers;
1520 o Impose and control maximum levels of harmful emissions, which’s reduction also will
1521 yield in lower fuel consumptions.
1522
1523 j. Inform/campaigns for consumers on more efficient transportation alternatives like hybrids,
1524 flexi-fuel and electric vehicles (which can ideally be peak shaving solutions and/or use
1525 excessive power generation from geothermal sources).
1526 k. The Government will take a lead in the application of efficient vehicles and cleaner fuels
1527 within its fleet.
1528 l. Explore the potential more energy efficient maritime sector transportation and alternatives
1529 between the two islands as for example hovercrafts.
50
1530
1531 2.5 Energy Use
1532 The forecasted peak demand is an important parameter for the electricity utilities and RE
1533 developers to determine the additional operational capacity that is needed to service demand. In
1534 addition, such forecasts can indicate the location and timing of a possible electricity supply
1535 surplus or deficit. This information is indispensible for the interconnection assessment.
1536
1537 Energy conservation and efficiency measures, and decentralized renewable energy generation
1538 (e.g. household PV-systems, household solar hot water systems and hotel co-generation, etc.)
1539 are used to make sure the energy demand reflects a lower demand projection.
1540
1541 Some minor capacity high efficiency (bio)-diesel generators will be purchased to fill in the gaps
1542 in capacity and function as back-up capacity to the RETs, where supply with bio-diesel/heat
1543 recovery systems is taken in account.
1544 The Ministry of PWUEH will promote the development and implementation of Demand Side
1545 Management (DSM) programs with the involvement of power producers. These programs will
1546 seek to:
1547 Develop institutional mechanisms to assess end use energy consumption and determine
1548 efficiency improvement potentials;
1549 Design and implement specific measures to capture these potentials;
1550 Evaluate the effectiveness of the proposed measures;
1551 Develop the necessary institutional capabilities to implement these activities on a
1552 broader, sector-wide scale.
1553 The Government will encourage the establishment of energy service companies (ESCO) to
1554 undertake energy efficiency improvements on the premises of consumers. Accordingly, it will
1555 take actions to catalyze the creation of one or more ESCOs in St. Kitts and in Nevis. It will also
1556 seek international donors to assist with the establishment of financial mechanisms for the
1557 promotion of energy efficiency. Moreover the Government will encourage certification procedure
1558 and standards for energy efficiency measures and standards in buildings.
1559 The Government will encourage the increased utilization of combined-heat-and-power plants in
1560 the productive and commercial sectors but especially for hotels, to increase the energy
1561 efficiency and reduce thermal losses.
1562 The Government will organize awareness campaigns and launch capacity building programs
1563 with regards to energy saving (energy efficient light bulbs, consumer patterns, cost-saving
1564 potentials in households, solar water heaters, etc.) addressing final consumers and providing
1565 cost-benefit examples of potential domestic, commercial and industrial energy saving means.
1566 The Government will in cooperation with development banks and/or international institutions
1567 strive to launch an efficiency program in the lightening sector, focusing on less energy intensive
1568 lightening sources, scheduling patterns and timers or sensors.
1569
51
