1. St. Kitts and Nevis Sustainable Energy Plan Initial Stakeholders Meeting June 13, 2006

2. St. Kitts and Nevis – A Clean Energy Nation The Federation Government has expressed its commitment to increasing the sustainability of the energy sector. Sustainability may be achieved through the diversification of electricity generation, increased use of renewable natural resources, increased energy efficiency and conservation, and improved transportation systems.

3. Who Is GSEII? Global Sustainable Energy Islands Initiative Formed as an informal partnership in 2001 – in response to St. Lucia’s commitment to become a sustainable energy demonstration country Partners: OAS ESG The Climate Institute UNIDO UNF Partner countries

4. What is the history of SEP development in the Eastern Caribbean? St. Lucia Prime Minister Kenny Anthony made first formal commitment at the Hague in 2000 St. Lucia SEP developed via a consultative process St. Lucia SEP adopted by Cabinet in 2005 Dominica and Grenada SEPs prepared in 2003 Adopted as operational plans by Public Works (Energy) Ministries SEP implementation in each of three countries

5. Why Should St. Kitts and Nevis Care about the Energy Sector? High price of electricity – Caused by: total dependence on imported petroleum for electricity generation…high price of petroleum (US$70+/barrel) Inefficiency of small diesel gen-sets High maintenance requirements/poor reliability of small diesel gen-sets results in electricity outages Negative Environmental impacts associated with diesel powered generation

6. Goals for a Sustainable Energy Plan Increased economic development Reduce fossil fuel imports Increase development and use of domestic natural resources Increase local employment and energy sector opportunities Lower energy costs Attract technology transfer/foreign investment Improved environmental protection Local environment (improved tourism appeal) Global environment (mitigate climate change emissions)

7. Defining a Course of Action The Government of St. Kitts and Nevis, in collaboration with GSEII may prepare the way for Clean Energy Development through the development of a Sustainable Energy Plan Articulate national goals and priorities for the energy sector Establish specific energy sector targets Renewable energy utilization Energy efficiency/conservation Articulate actions required to achieve the stated goals

8. Elements of a SEP

9. I.Outline Current Energy Conditions A. Legal Structure - Electricity State run utilities control generation, transmission and distribution St. Kitts Electricity Department NEVLEC Limited or no opportunities for private power generation Regulated pricing (Current Prices?) Subsidies required to maintain “affordable electricity?” (Level of subsidies?)

10. I. Outline Current Energy Conditions, Cont. B. Electricity Generation portfolio Installed capacity Demand characteristics Key consumers (tourism, medical school, light industry, government, etc.) Projections for expansion

11. St. KittsNevisUnit Parameter St. Kitts Electricity Department Nevis Electricity Company (NEVLEC) Diesel units77# Installed capacity33.513.7MW Electric efficiency4035% Average load factor0.730.74 Fuel typeGasoil (diesel fuel)Diesel fuel #2 Fuel cost0.420.49US$/L Electricity price0.1690.19US$/kWh Summary of Generation Characteristics (July 2005)

14. Projections for Demand Growth – St. Kitts [1][1] Source: Generation Expansion Plan (2005-2015), St. Kitts Electricity Department (2005)

15. Projections for Demand Growth - Nevis

16. I. Outline Current Energy Conditions, Cont. Transportation Sector Government purchase and sale of gasoline Cost of gasoline at the pump? Subsidies to maintain affordable gas prices? Transportation infrastructure plan? Average age of vehicle fleet? Organization of public transportation?

17. II. Establish SEP Energy Sector Targets A. Electricity Sector Demand reductions (DSM; EE) 2011: Reduce demand by X%; X MW installed; X GWh generated 2016: Reduce demand by X%: X MW installed; X GWh generated Renewable Energy Installations 2011: X MW (X% of projected demand) 2016: X MW (X% of projected demand) GHG Emissions Reductions: X% reduction in diesel consumption/X% reduction in GHG (TOC)

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

19. III. Outline Potential Mix of Sustainable Energy Technologies Grid-tied renewable energy alternatives Household and off-grid renewable energy alternatives Energy efficiency measures Transportation sector measures

20. Likely Near-Term Grid-tied Renewable Energy Alternatives Geothermal power generation on Nevis St. Kitts and Nevis participates in the GEF/UNEP sponsored Geo-Caraïbes Project Pre-Feasibility study (geology, geochemistry and prelim geophysics) suggests 10MW+ potential in the Bath/Farms Estate area

21. Likely Near-Term Grid-tied Renewable Energy Alternatives Biomass to Energy on St. Kitts Utilize sugar cane and municipal solid waste to produced ethanol and electricity Need to assess optimal utilization biomass Sufficient feedstock for commercial production? Economical to revitalize sugarcane crop? Long term reliability of feedstocks? Potential for ethanol exports? GSEII embarking on commercial- style feasibility study to determine biomass to energy potential

22. Likely Near-Term Grid-tied Renewable Energy Alternatives Wind, OTEC and others Need site specific resource assessments to determine potential Wind – broad analysis Average wind speed = 6.18 m/s (10 m height) (St. Kitts) Average wind speed = 7.89 m/s (10 m height) (Nevis)

23. Likely Near-Term Distributed Renewable Energy Alternatives The most obvious opportunity for households, hotels, other buildings is solar hot water heaters Key opportunity to reduce energy consumption Solar PV and distributed wind show promise for buildings Possible interconnection to the grid (net metering)

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

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

26. IV. Potential Actions to Achieve Targets Promotion of Grid-Tied Renewables Liberalize electric utilities (including public private partnerships) Mandate Renewable Energy Technology Use Renewable energy portfolio standard (require 10- 30% of installed capacity from renewables) Attract private power developers for alterative energy solutions Offer long-term PPAs Offer tax and other fiscal incentives

27. IV. Potential Actions to Achieve Targets Promotion of Grid-Tied Renewables, Cont. Make firm commitments to key project opportunities (geothermal, biomass, etc.) Deliver on government responsibilities related to project developments (ie. Development of the sugarcane/feedstock supply, commit to long term PPAs, execute permits and licensing, etc.) Increase human capacity/awareness Establish utility training programs Launch national education/awareness program Seek international financing/resources for renewable energy feasibility and development (GEF, CDM, EU, World Bank…)

28. IV. Potential Actions to Achieve Targets Promotion of Distributed Renewables National Solar Water Heating Initiative National awareness initiative Tax relief for solar water heating system purchases Solar hot water heating loan program Encourage solar PV system deployment Attract solar manufacturer/assembly plant investment

29. IV. Potential Actions to Achieve Targets Promotion of Energy Efficiency Improvements Compact fluorescent lightbulb program (Cuba or GSEII/Climate Care) Public buildings energy efficiency assessments and retrofits Initiate comprehensive capacity building initiative Catalyze the establishment of ESCOs Launch national DSM program Establish appliance and building norms and standards Create/promote hotel “Green Globe Program”

30. IV. Potential Actions to Achieve Targets Cross-Cutting Electricity Sector Issues Electricity system improvements Promote Climate Change/CDM strategy

31. IV. Potential Actions to Achieve Targets Transportation Sector Reforms Establish alternative fuel vehicle demo fleet Impose regulations for higher efficiency among vehicles Improvements in public transportation systems Modifications to roads/traffic patterns

32. V. Next Steps in the Development of a SEP Complete assessment of current conditions – by 23 June Stakeholder dialogue and individual consultations on priorities – by 30 June Draft 1 of SEP by GSEII distributed to Stakeholders for review – by 15 July Revisions thru to Final Draft by 1 Sept Submission to Cabinet for Consideration by 15 Sept

33. Contact Information Mark Lambrides mlambrides@oas.orgmlambrides@oas.org +1-202-458-6261 Kevin de Cuba kdecuba@oas.orgkdecuba@oas.org +1-202-458- Maria Rivera maria@energyandssecurity.commaria@energyandssecurity.com +1-703-

34. Thank You!