OECS, Enhanced Energy Efficiency, January 2001

______________________________________________________________________________
IDENTIFICATION OF POLICY FRAMEWORK OPTIONS AND

ELEMENTS FOR ENHANCED EFFICIENCY OF ENERGY USE
IN THE OECS STATES
Prepared For:
OECS Natural Resources Management Unit
Prepared By:
Lewis Engineering Inc.
In Association With:
Marbek Resource Consultants Ltd.
January 2001
______________________________________________________________________________
______________________________________________________________________________
IDENTIFICATION OF POLICY FRAMEWORK FOR ENHANCED EFFICIENCY

OF ENERGY USE IN THE OECS STATES
TABLE OF CONTENTS
Page
EXECUTIVE SUMMARY ES - 1
1.0 INTRODUCTION ........................................................................................................ 1 - 1
2.0 OBJECTIVES ............................................................................................................... 2 - 1
3.0 BASELINE CONDITIONS ......................................................................................... 3 - 1

3.1 Current Energy Situation....................................................................................... 3 - 1
3.1.1 Energy Consumption................................................................................ 3 - 1
3.1.2 Energy Pricing.......................................................................................... 3 - 2
3.1.3 Energy Supply.......................................................................................... 3 - 4
3.2 Current Economic and Institutional Situation.......................................................... 3 - 5
3.3 Current Government and Utility Programs and Policies.......................................... 3 - 7
4.0 OPPORTUNITIES FOR ENERGY MANAGEMENT.............................................. 4 - 1

4.1 New Technology Applications.................................................................. 4 - 1
4.1.1 Residential Sector .................................................................................... 4 - 1
4.1.2 Commercial Sector .................................................................................. 4 - 1
4.2 Energy Conservation Measures ............................................................................ 4 - 7
4.2.1 Commercial Sector .................................................................................. 4 - 7
4.2.2 Residential Sector .................................................................................... 4 - 8
4.2.3 Transportation Sector............................................................................. 4 - 10
4.3 Application of Energy Efficient Procedures.......................................................... 4 - 11
4.3.1 Commercial Sector ................................................................................ 4 - 11
4.3.2 Residential Sector .................................................................................. 4 - 13
4.4 New Generation Opportunities........................................................................... 4 - 14
4.4.1 Renewable Energy Generation................................................................ 4 - 14
4.4.2 Conventional Generation........................................................................ 4 - 17
______________________________________________________________________________
______________________________________________________________________________
TABLE OF CONTENTS Cont.

....................................................................................................................................... Page
5.0 INTERNATIONAL APPROACHES RELEVANT TO THE OECS
SITUATION ................................................................................................................ 5 - 1
5.1 Case Study #1: Jamaica Public Service Company and Side .................................. 5 - 2
Management Project
5.1.1 Introduction............................................................................................. 5 - 2
5.1.2 Key Aspects of the Project ...................................................................... 5 - 3
5.1.3 Status and Lessons Learned..................................................................... 5 - 9
5.2 Case Study #2: Barbados................................................................................... 5 - 12
5.2.1 Domestic Hot Water Heater Program..................................................... 5 - 12
5.2.2 Demand Side Management Plan............................................................. 5 - 13
5.3 Case Study #3: The ESCO Experience in Bermuda ............................................ 5 - 16
5.3.1 Introduction........................................................................................... 5 - 16
5.3.2 Key Activities and Results...................................................................... 5 - 17
5.4 Case Study #4: Operation Lampe Basse Consommation:.................................... 5 - 19
Guadeloupe and Martinique
5.4.1 Introduction........................................................................................... 5 - 19
5.4.2 Key Activities and Results...................................................................... 5 - 20
6.0 BARRIERS ASSESSMENT........................................................................................ 6 - 1

6.1 Cross-Cutting Barriers ......................................................................................... 6 - 1
6.1.1 Power Quality.......................................................................................... 6 - 1
6.1.2 Electric Rate Structure.............................................................................. 6 - 2
6.1.3 Access to Affordable Financing................................................................ 6 - 2
6.1.4 Lack of Product Testing and Performance Labelling.................................. 6 - 4
6.2 Barriers Affecting Demand for Energy Management .............................................. 6 - 4
6.3 Barriers Affecting the Supply of Energy Management ............................................ 6 - 5
6.3.1 Lack of Properly Trained Energy Management Professionals..................... 6 - 6
and Tradespersons
6.3.2 Lack of Domestic Distribution Network.................................................... 6 - 7
6.4 Summary of Barriers ............................................................................................ 6 - 8
______________________________________________________________________________
______________________________________________________________________________
TABLE OF CONTENTS Cont.

....................................................................................................................................... Page
7.0 RECOMMENDATIONS............................................................................................. 7 - 1
7.1 Recap of Major Observations .............................................................................. 7 - 1
7.2 Sustainable Energy Program................................................................................. 7 - 1
Efficiency and Utilize Renewable Energy in the OECS Economies
7.3 Timing and Structuring of the Program.................................................................. 7 - 3
7.4 Program Component #1: Build and Maintain the Program..................................... 7 - 3
7.4.1 Objective................................................................................................. 7 - 3
7.4.2 Overview................................................................................................. 7 - 3
7.5 Program Component #2: Education Awareness and Capacity Building .................. 7 - 5
7.5.1 Objectives ............................................................................................... 7 - 5
7.5.2 Barriers Addressed .................................................................................. 7 - 5
7.5.3 Overview................................................................................................. 7 - 6
7.6 Program Component #3: Transformation of the Institutional Environment ............... 7 - 8
7.6.1 Objective................................................................................................. 7 - 8
7.6.2 Barriers Addressed .................................................................................. 7 - 8
7.6.3 Overview................................................................................................. 7 - 8
______________________________________________________________________________
______________________________________________________________________________
PREFACE
This document was made possible with the financial support of the Environmental Capacity
Development Project, a partnership project between the Organisation of Eastern Caribbean States and
the Canadian International Development Agency, whose participation is gratefully acknowledged.
______________________________________________________________________________
ES - 1
EXECUTIVE SUMMARY
1.0 BACKGROUND
In order to respond to Member State concerns regarding the cost and reliability of energy security, OECS-NRMU
has undertaken a study to determine options and opportunities for improved energy efficiency and energy
conservation in the sub-region. Data gathering, analysis and identification of options and opportunities has been
undertaken with respect to these issues, including work in Montserrat, St. Lucia and Grenada to identify, illustrate
and confirm issues and options that exist across the sub-region.
2.0 RECOMMENDATIONS
2.1 RECAP OF MAJOR OBSERVATIONS
Productive energy (electricity, motive and stationary engine and other fuels) in most OECS countries is supplied
almost exclusively by fossil fuels, 100 percent of which must be imported. Energy consumers are spending an
increasingly large percentage of their disposable income to pay for energy, without any assurance from
governments or utilities that programmes or policies will be implemented to stabilise or reduce energy costs.
The investigation underlying this report confirms that the OECS economies can generate significant economic
benefits through investments in energy efficiency and renewable energy. It is estimated that there is an economic
potential for energy use reduction in the range of 10% to 20%. In effect, these opportunities represent the
potential for the OECS to embark on a ? sustainable energy initiative? that would result in significant
environmental and social benefits as well. As in the case of other countries, there is the opportunity to coordinate
or integrate this initiative with efforts to foster cleaner production in industry and commerce. To summarize, the
key observations emerging from this investigation are as follows:
.1 There is currently no structured energy management plan or policy in the OECS.

.2 There is general agreement among stakeholders of the need and importance of energy
management.
.3 Energy costs in the OECS are, on average, 200 - 300 percent higher than North American
averages.
.4 There is a general lack of awareness of energy management among energy consumers, building
designers, and facility managers.
.5 The potential for renewable energy utilizing wind and solar systems is excellent.

ES - 2
2.2 SUSTAINABLE ENERGY PROGRAM
In view of the findings in this report, it is recommended that the OECS establish a multi-year sustainable energy
program commitment. For the purposes of discussion, this program should have the following vision statement:
OECS Sustainable Energy Program-Vision Statement
Improvements to the efficiency with which energy is used in the OECS economies, as well as increased
utilization of renewable forms of energy, are the two cornerstones of the OECS Sustainable Energy Program.
The Program is a key component of the OECS commitment to Cleaner Production. The Program provides the
resources and structure to effectively meet practical and realizable objectives. This is a long-term commitment
to ensure effective capacity building and sustainablity.
The OECS Sustainable Energy Program should be implemented consistent with the following principles:
.1 Long-term Commitment: Resources should be committed for a minimum 5 years. The experience
in other developing country jurisdictions indicates quite clearly that a commitment of this degree
is necessary to build capacity among trade allies, institutional staff and establish other critical
program elements.
.2 Practical Solutions: The program should be oriented to providing practical solutions in meeting
reasonable goals. A key advantage of this approach is that a small number of large energy users
can be singled out for a near-term focus of activities with high potential for significant and
short-term results.
.3 Addressing Key Barriers: The Program should be designed to address the key barriers impeding
accelerated market penetration of energy management actions.
.4 Measurement, Monitoring and Reporting: The Program should be supported by an ongoing
measurement and monitoring system which is critical to reporting on results relative to stated
objectives.
2.3 TIMING AND STRUCTURING OF THE PROGRAM
On the assumption that this will be initially a 5 year Program, it is recommended that the roll-out presented below
be considered for development and implementation of the Program. The proposed Work Breakdown Structure for
the Program involves three components. All three components should be implemented in parallel, but the first two
components should receive the most focus in the short term.
2.4 PROGRAM COMPONENT # 1: BUILD AND MAINTAIN THE PROGRAM

ES - 3
The objective of this component should be to establish the foundation for Program success through development
of the Program approach, identity, administration and professional capacity. This work component should focus
on developing and maintaining the Program operation. To be effective the Program should achieve a professional
capacity to deliver its services and develop an administrative regime to track and manage its budget. The work
activities should include:
.1 Complete program design: This will require extensive consultations with key stakeholders in the
OECS as well as externally.
.2 Establish funding and structure: There is a strong potential for the OECS to seek support from
various international development banks and bilateral agencies for some co-funding of the
Program. It will also be important to secure some funding from each OECS state in order to
demonstrate commitment to the program prior to applying for funding.
.3 Establish and maintain Program allies: This will involve establishing a regular forum and
structure for communication among key allies such as utilities, government agencies, and
industry associations (e.g., Caribbean Association for Sustainable Tourism).
.4 Develop internal capacity: This will involve the design and implementation of a training
curriculum for Program staff. To expedite this action and reduce costs , existing curriculum
from other jurisdictions should be examined for their potential adaptability for use in the OECS.
.5 Develop policy, legislative and regulatory proposals: This will create the basis for the
sustainability of the initiative.
.6 Operate to initiate program: The Program will assemble, negotiate and market projects designed
to generate certified greenhouse gas emission reduction credits.
2.5 PROGRAM COMPONENT #2: EDUCATION AWARENESS AND CAPACITY BUILDING
The objectives of Program Component #2 should be to: increase awareness among large and small energy users
and energy management (EM) trade allies of the economic and environmental benefits of energy management
opportunities; demonstrate technologies, methods, and techniques necessary to implement successful EM
projects; build capacity among the trade allies to deliver quality and reliable EM services and products; and reduce
risk, in the short term, associated with energy management investments. This Program Component should
comprise a range of activities designed to educate the market on energy management opportunities and create
awareness as the basis for generating demand for EM products and services.
Some of the key program activities should be:
.1 Demonstrations (general and for the large users):

ES - 4
.2 Education and Awareness activities for the public

.3 Trade Ally Capacity Building
2.6 PROGRAM COMPONENT #3: TRANSFORMATION OF THE INSTITUTIONAL ENVIRONMENT
The objective of this Program Component should be to help develop the institutional environment and capacity
necessary to catalyze and foster a sustainable energy management market.
This Program Component relates to the capacity among OECS institutions to introduce fundamental policy,
legislative and other changes necessary to address several crosscutting barriers to EM. The recommended
activities include:
.1 Foster studies necessary to assess and offer solutions to key institutional barriers; This would
include the transportation sector, which traditionally has been the most difficult of the sectors in
which to foster EM. This should also include establishment of a research chair in energy
efficient design that can assist with the training of future leaders of energy management projects
and programmes in the OECS.
.2 Mandate testing of energy using products. The focus would be on those products that represent
the bulk of energy use and emissions (lighting, air conditioning, motors, boilers, domestic
appliances, etc.) This testing would become the prelude to an eventual energy performance
labelling initiative.
.3 Revise national building codes. This would include minimum standards for energy performance
in new construction.
.4 Impose a regulatory regime under which electric utilities would effect energy management.
Electric utilities would be required, and have financial leeway, to develop and implement EM
programs.
.5 Remove or reduce import duties on EM products. These products would include energy
efficient products (high efficiency appliances, lamps) and renewable energy technologies such as
DHW solar units, photovoltaic systems, and wind turbines.

1-1
1.0 INTRODUCTION
The energy sector in the Caribbean and Latin American region is very diverse, with large
differences between countries and sub regions. These differences can be attributed to economic
conditions in each country, energy policies of governments and financial institutions in each country,
institutional capability relative to energy management, availability of indigenous energy strategies and
infrastructure, level of energy consumption, and geographic isolation.
However, despite many barriers, many new energy strategies are being implemented throughout the
region1. Also, governments throughout the region have been urged to develop energy policies
designed to encourage efficiency and development of renewable technologies. Utilities in the region
require a regulatory framework that will allow implementation of actions called for in such policies2.
Many governments and industries, that were initially sceptical of the problem of global warming, are
now agreeing with the increasing amount of scientific evidence corroborating the claims made during
the Kyoto conference on global climatic change. With this change in attitude has come renewed
interest in the environmental and financial benefits of progressive energy policies. For example, large
North American industries are now accepting proposals from around the world for energy
management initiatives that will lead to measurable reductions in greenhouse gas emissions. This
method offers countries in the region a potential source of funding for their programmes; other
potential funding sources may be available as well.
This report summarizes the results of an energy study of the OECS countries within the region,
1
The Latin America Report, The Multilateral Development Banks Energy Project, Institute del Tercer Mundo,
1997, Summary, p. 1.
2
Resolution and Model Energy Policy, Caribbean High level Workshop on Renewable Energy Technologies,
1994, p. 135.

1-2
which has just been completed by Lewis Engineering. The study examined current energy usage
and policies, and developed recommendations for future energy management initiatives.

2-1
2.0 OBJECTIVES
The initial objective of this study was to conduct a review and determine of the current state of
energy efficiency and conservation programs, policies, and projects in the OECS. This review,
encompassing both existing documentation and personal interviews, provided a baseline overview
of the energy sector in the OECS, with reference to regional trends and strategies. The study then
identified opportunities for energy management initiatives in the region.
A review of relevant case studies of energy management initiatives in the region was used to analyse
the lessons learned, and to determine their suitability for the OECS. The options available for
enhancing energy efficiency in the OECS was then examined and discussed, along with perceived
and actual barriers to implementing regional energy management programs. The final objective was
to develop a set of recommendations that can serve as the framework for development of a regional
energy management policy for the OECS.

3-1
3.0 BASELINE CONDITIONS
3.1 CURRENT ENERGY SITUATION
3.1.1 Energy Consumption
Electrical energy consumption, on an annual per capita basis, in the OECS ranges from a high of
2,026 kW.h in St. Kitts to a low of 495 kW.h in Dominica. These values are based on 1998
statistics. Figure 1, on the next page, shows graphically the relative difference in consumption
between the OECS countries and also shows comparisons with Barbados, Jamaica, and Canada3.
It is readily apparent that compared to Canada, none of these countries have a high level of energy
consumption. The consumption levels in St. Kitts and BVI are comparable to the levels in Barbados
and Jamaica, suggesting a higher level of development or industrialization compared to other
countries of the OECS. Most large electrical appliances observed were low to medium efficiency.
Most light fixtures observed were low efficiency. Many light fixtures and appliances being sold in
stores could not be legally sold in Canada or the U.S. because they do not meet the mandatory
minimum efficiency standards in each country=s energy efficient appliances act.
Information from the St. Lucia Department of Statistics indicates that 32% of electrical energy
production is consumed by the residential sector and 46% by the commercial sector, including
hotels. The industrial sector is less than 5%, indicating a low level of industrialization, which is
common throughout the OECS. 3.8% of the electrical energy production is for internal use within
the utility and a surprising 12% of production is attributed to losses in transmission4. This high loss
value suggests the transmission voltage is too low, and/or the energy is being stolen, and/or the
revenue meters are improperly calibrated. Normal utility line losses in a small distribution system
should be no higher than 3 - 4%.
Consumption of other energy, mostly motor fuels, is also low compared to Canada. Despite the fact
3
http:www.worldskip.com
4
http://www.stats.gov.lc
3-2
that there are a large number of private automobiles in each country, relative to population, the
distances travelled are relatively short. This accounts for the difference of consumption. Liquified
propane gas is used as cooking fuel in many commercial restaurants and larger hotels and homes.
Exact consumption figures could not be obtained, but this does not represent a large portion of the
overall energy consumption in any country of the OECS.
3.1.2 Energy Pricing
Electrical energy prices in the OECS countries visited ranged from $0.487/kW.h (E.C.) for small
residential customers in St. Lucia to $0.68/kWh (E.C.) for commercial customers on Montserrat.
These rates include a fuel surcharge amounting to between $0.14 and $0.17 per kW.h. This
surcharge is based upon the price of fuel relative to a benchmark, and is calculated monthly in most
countries. All pricing is based upon energy only, with no demand pricing. The energy is priced by
sectors, typically residential, commercial, and industrial. Within the residential sector the first block
of energy, typically 100 - 200 kWh, is priced 10 - 15% lower than the remaining energy. Other
sectors have price structures based upon delivery voltage, with higher delivery voltage energy price
being 10% less than low voltage energy. Some industrial sector rates require the customer to
reduce load during the daily high demand period between 6:00 and 9:00 p.m.
Despite electricity prices that are four or five times higher than average rates in Canada, we learned
that electricity rates in most of the OECS countries are still heavily subsidized by government. In
Montserrat, the electric utility received its diesel fuel for a subsidized price that is less than half the
retail price. Despite this, the utility is still falling short of covering its production costs by 15% per
year. Without any means to make a profit, the government owned utilities cannot establish any
reserve funds to cover infrastructure upgrades and expansion. They must, instead, ask government
for special funding to cover this work. The only exception to this that we observed, was in Grenada
where the utility, privatized for five (5) years, has been profitable and is investing in new diesel
generating units and new metering technology.

3-3
Figure 1. Energy Consumption per Capita in Selected Countries

1998 figures
Country Population Annual Electrical Energy per Capita Consumption

Consumption (GW.h/yr) (KW.h/yr)
St Lucia 138000 199 1442
Grenada 97000 98 1010
Antigua 69000 84 1217
Montserrat 5500 9 1636
St Vincent 110000 60 545
St Kitts 39000 79 2026
Dominica 74700 37 495
BVI 19500 39 2000
Barbados 274540 625 2276
Jamaica 2652689 5939 2239
Canada 31281092 484515 15489
Electrical Energy Consumption

per Capita - 1998
18000
16000
14000
12000
KW.h/yr
10000
8000
6000
4000
2000
0
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Other energy sources in OECS countries typically consist of motor fuels, fuels for stationary engines
and boilers, and cooking fuels. Gasoline prices in the OECS countries visited averaged $1.43 E.C.
per litre, which is roughly equivalent to the price today in Canada and much lower than Europe.
This price, as well, was reported to be heavily subsidized.
An end to government energy price subsidies, while distressing to consumers in the short term, will
provide governments with additional working capital to invest in energy management initiatives, and
the higher energy prices will be the incentive consumers need to participate in conservation and
efficiency programs.
3.1.3 Energy Supply
All countries of the OECS, with the exception of Dominica and St. Vincent, rely exclusively on
diesel engines to generate electricity. Hydro power on Dominica and St. Vincent accounts for 10 -
20% of total capacity, with the remainder provided by diesel generation. Some exploration of other
sources such as wind, geothermal, hydro, photovoltaic, and solar thermal systems has been
undertaken, but we were unable to discover any commercial installations that are currently
operating.
Fuels for electrical generation as well as motor, industrial, and cooking fuels are imported to each
country in bulk, and distributed to industrial customers, wholesalers, and retail outlets. There are no
gas or oil reserves under exploration or development in any OECS countries at this time. However,
a great deal of petroleum reserves exist in the region, principally in Venezuela, Trinidad, and
Mexico; the region contains over 12% of the world’s known oil reserves5.
Both oil and natural gas production in the region has increased in recent years. Compressed natural
gas (CNG) is now transported via tankers from the region to overseas markets. Within the region,
CNG terminals have been set up to handle and distribute CNG to utilities and industry. Puerto Rico
has recently completed construction of a CNG terminal and CNG fired power plant. None of the
OECS countries, however, have sufficient energy demand to justify the large cost of developing
5
OrganizacΡon Latinoamericana de EnergΡa (OLADE) website: http://www.olade.org.ec/idiomas/ingles
3-5
CNG facilities.
Combustion of fossil fuels releases large amounts of greenhouse gases into the atmosphere and
contributes to the overall warming of the planet. Global warming should be of particular concern to
small island states such as those in the OECS due to the damaging potential of rising ocean levels
attributed to global warming. In the OECS each year , over 120,000 tonnes of diesel fuel is burned
to generate electricity. This generates over 350,000 tonnes of carbon dioxide emissions into the
atmosphere as well as emissions of sulphur dioxide and nitrogen dioxide which contribute to global
warming and air pollution. Motor vehicles contribute a similarly large amount of pollutants each
year. Reduction of energy consumption through conservation and increased efficiency can have a
major beneficial impact upon the environment by reducing emissions from power plants and motor
vehicles.
3.2 CURRENT ECONOMIC AND INSTITUTIONAL SITUATION
The OECS countries all have much lower per capita income and per capita GDP than more
developed countries in the region such as Barbados or Trinidad. Each country has a large annual
trade deficit due to the fact that each country is so reliant upon imports to provide the everyday
needs of its citizens. Most countries are reliant upon tourism, bananas, and sugar for the majority of
the capital flowing into each country. This situation results in a small taxbase, and limits each
country’s government from raising sufficient revenues to embark upon new programs. Most
institutional strengthening, particularly within the health, education, and transportation sectors, is
dependent upon foreign assistance.
Region-wide, there have only been a select few initiatives of energy efficiency or energy
conservation such as demand side management. These efforts are largely localized, with no
large-scale centralized programs in effect. Of these, many of the successful programs have been
implemented by non-governmental organizations or small companies.
The Inter-American Development Bank (IDB) and the World Bank (WB) are the two international
financing institutions most actively involved in development projects in the region. Although they

3-6
have energy efficiency and energy conservation programs that they promote and finance, it appears
that such projects in the region have received little attention from these institutions.
With regard to the IDB's financing of energy generation projects in recent years, ten are in support
of coal, oil and natural gas, and nine support renewables (geothermal, wind and hydroelectricity).
There are no IDB loans for solar, biomass or mini-hydro projects. The IDB has had five projects
that contain energy efficiency elements in recent years6.
During 1993 - 1997 the WB funded three projects on renewables involving hydroelectric and
biomass sources. The WB portfolio shows no recent funding for solar, geothermal, mini-hydro or
wind projects. The Global Environment Facility within the WB implemented one renewable project
in recent years in the whole region. This was the 1992 Tejona Wind Power project in Costa Rica.
With regard to energy efficiency, in the same time period the WB financed one project with an
energy conservation component and one project with a demand-side management program7.
In recent years the WB International Finance Corporation (IFC) supported nine hydrocarbon
projects, two hydroelectric, one wind, and one bagasse project8. However, in February, 2000, the
IFC launched a new program called the Renewable Energy and Energy Efficiency Fund (REEF) for
Emerging Markets, which could be applicable to future energy projects in the region, and may
provide the incentive for more renewable energy and energy management projects to proceed.
Overall, energy efficiency programs have received little attention in the region. It is estimated that
10% to 20% of current energy consumption could be saved through more efficient energy use
throughout the region. During the period 1980 - 1995, there is evidence of a net decrease in energy
efficiency in the whole region, as reflected in the energy consumption / Gross National Product
(GNP) indicator. Only Jamaica, Uruguay, and Guyana improved their energy efficiency situation
6
The Latin America Report, The Multilateral Development Banks Energy Project, Instituto del Tercer Mundo,
1997, Summary, p.5-8
7
IBID
8
IBID

3-7
during this time9. This net decrease in energy efficiency in the region as a whole can most likely be
attributed to the predominant development model, which fosters urban growth and consumerism10.
Some commercial organizations such as the Caribbean Hotel Association (CHA) have sponsored
educational programs in energy management. These courses were offered to members and non-
members of the CHA at a nominal cost. Response has been described as poor to fair in the
countries in which the program has been offered.
3.3 CURRENT GOVERNMENT AND UTILITY PROGRAMS AND POLICIES
With regard to energy conservation or efficiency programs currently offered by governments or

utilities in the OECS, we were unable to find many examples. In the countries visited, it was
mentioned that import duties and consumption taxes on energy conserving products such as solar
water heaters or windmills would be waived or reduced. We were unable, however, to obtain
written confirmation of this policy being legislated.
There is a long history in this region of discussing policies and procedures for energy management
and renewable energy technologies. Official policies and studies have been developed by several
organizations including the Caribbean Association for Suitable Tourism, Caribbean Council on
Science and Technology, and the Centre for Environment and Development at the University of the
West Indies. The general consensus reached by these groups is that energy management is a
worthwhile achievable goal that will pay large dividends to the countries that choose to implement a
program.
In Grenada the electric utility is private, and it has been negotiating with some of its largest
customers about implementing some demand side management strategies in order to reduce the
daily system demand spike. These strategies have included an education campaign for customers on
demand side management and load shifting. The ultimate objective is to install electronic demand
9
IBID
10
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metering for their largest customers that will allow these customers to have access to their
consumption records and profiles via the Internet.
The Caribbean region has several examples of successful government and utility sponsored energy
management programs. Section 5 of this report describes programs in Barbados, Bermuda,
Jamaica, Guadalupe, and Martinique. The success of each one demonstrates that the energy
consumers of the region will gladly participate in these programs when these customers are properly
informed and sufficiently motivated.

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4.0 OPPORTUNITIES FOR ENERGY MANAGEMENT
4.1 NEW TECHNOLOGY APPLICATIONS
4.1.1 Residential Sector
Figure 2 shows typical consumption figures and efficiency opportunities for a typical residence in the
OECS. Energy use is not large. Most residences, including the one in this example, are not air
conditioned, and rely instead upon shading and natural ventilation to keep them comfortable. The
major energy uses are the kitchen appliances. Replacement of a home refrigerator with a higher
efficiency model does not appear to have a good payback, but installation of high efficiency lights
and a solar hot water heater show good potential. The residence example in Figure 2 uses an
electric stove for cooking, which explains the high percentage of consumption attributed to this
activity. Some residences and most hotels use propane gas for cooking. The use of solar energy for
cooking was not observed and is not considered practical for most homeowners.
Installation of photovoltaic panels to supply a small residential load has been demonstrated in rural
areas of Jamaica that were currently not grid connected. When the cost of grid expansion is
factored in, the photovoltaic option appeared viable in the demonstration. Since very few
residences in the OECS are not grid connected, there seems to be limited opportunity for the
technology and its current cost. Our analysis suggested that over a ten (10) year lifespan, the
photovoltaic system would supply a small residence at roughly 10% above the current residential
electric rate. This analysis indicates that, with continued technical improvements and price
reductions, photovoltaics may be viable even in grid supplied areas in a few years.
4.1.2 Commercial Sector
This sector is dominated in most OECS countries by the hospitality business, comprised mostly of
hotels, guesthouses, and restaurants. Figures 3 and 4 show the typical energy use breakdown for a
six (6) guestroom hotel or guesthouse and for a 100 room hotel. The largest energy users are air
conditioning and hot water production.

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Figure 2. Typical Residence
Residential Electrical Consumption

Residential Energy Consumption
electric cooking
lighting 3.50%
refrigeration 7.50%
cooking 49% refrigeration
remainder lighting
water heating 36% 4% 4%
8%
remainder 4%
water heating
36%
cooking
48%
Potential Energy Improvements
Item Installed Cost ($EC) Annual Savings ($EC) Payback (yrs)

replace incandescent bulbs with CFL's 464 99 4.7
replace refrigerator with high eff model 1800 160 11.2
replace electric water heater with solar heater 3622 1432 2.5
Notes:
- all costs are in EC$

- calculations are based on energy pricing supplied by LUCELEC

4-3
Figure 3. Typical Small Hotel/Guesthouse

- 6 guest rooms
Electrical Consumption
Small Hotel/Guesthouse Consumption propane gas
cooking
lighting 1.70%
air conditioning 61.70%
water heating 26.30%
laundry
refrigeration 1.50% remainder
7%
laundry 7.10% 2%
refrigeration lighting
remainder 1.70%
2% 2%
water heating
26%
air
conditioning
61%

replace refrigerators with high eff models 2800 320 8.8
replace electric water heater with solar heater 10278 11900 0.9
install high eff air conditioners (EER 11) 15600 7609 2.1
insulate attic above conditioned spaces 3000 4360 0.7
Notes:


4-4
Figure 4. Typical Large Hotel

- 100 guest rooms
Large Hotel Electrical Consumption Large Hotel Consumption

propane gas cooking
lighting 1.60%
air conditioning 54.20%
water heating 28.60% refrigeration remainder
laundry 14.30% 1% 1%
refrigeration 0.50%
remainder 0.80% laundry lighting
14% 2%
water
heating air
conditioning
29%
53%

replace a.c. units with central chiller and fan coils 1018000 190000 5.4
replace electric water heaters with solar heaters 105000 179100 0.6
insulate attic above conditioned spaces 8000 11300 0.7
install digital control system 70000 34000 2.1
Notes:


4-5
Other major users are lighting and laundry appliances. As demonstrated in Figures 3 and 4, the
application of new technologies can result in rapid investment recovery. The two best examples are
attic or roof insulation above conditioned spaces, and replacement of electric hot water heaters with
solar units.
In the large hotel scenario, replacement of standard efficiency room air conditioners (EER8) with
high efficiency units (EER11) offers a more attractive payback than the option of installing a central
chilled water system and distribution piping. The chilled water system is more efficient and offers a
higher EER (18), but is not as attractive due to the higher cost of installing the distribution piping in
an existing building. For new construction where the total cooling load exceeds 350 kW, a central
chilled water system will prove to be the most cost effective solution over the expected life of the
building.
Digital control systems in large hotels are also a good investment. These refer to an automated
system of room sensors that automatically reduce power consumption in guestrooms that are
unoccupied. These systems are typically activated by an electronic room key that will switch the
room from >unoccupied= to >occupied= mode. These systems typically offer the flexibility of
shutting off all or part of the rooms electric circuits powering such things as lights, television, air
conditioners, and radio.
Lighting represents less of the total load in hotels than it does in office buildings (Figure 5), but the
usage is significant enough that retrofitting of existing light fixtures with high efficiency fixtures offers
a reasonably attractive payback. For interior applications, T8 fluorescent tubes and compact
fluorescent lamps offer the best savings with minimum fixture modifications. For exterior lighting,
compact fluorescent, metal halide, and high pressure sodium lamps will provide good energy
savings, compared to the current standard of incandescent and mercury vapour lamps.
The hospitality industry also uses large amounts of energy for cooking and laundry. The use of
electric dryers in the laundry represents the largest portion of the load. Dryers that use other energy
sources to provide the drying heat are cheaper to operate. These include propane and steam heated
dryers. Solar heating can also be used to provide the heat source for drying, although in larger

4-6
hotels with large laundry demands, it may not be able to provide the high

4-7
Figure 5. Typical Large Office Building

- 5 floors @ 10000 sq ft per floor
- 50 hours per week normal operating hours
Office Building Electrical Energy Consumption

Office Building Energy Consumption
lighting 32.70%
computers 2.80%
air conditioning 61.20% remainder
water heating 0.40% water 3% lighting
remainder 2.90% heating
33%
0%
air
conditioning computers
61%
3%

replace 40 watt fluorescent tubes with high eff 34 watt 33750 21150 1.6
replace air conditioners with central chiller and fan coils 1240000 139300 8.9
replace electric water heaters with solar heaters 3622 1791 2
insulate roof 30000 16169 1.9
install digital control system 40000 26800 1.5
replace 40 w task lights with 15 w CFL's 5800 1490 3.9
Notes:


4-8
heat that allows rapid drying required by busy hotels. A recent European dryer design has a
mixture condensing core and recirculates the air in the dryer, eliminating the need for an external
vent, and improving energy efficiency greatly. These units, however, are slower than conventional
electric dryers, and are not yet available in commercial sizes. Commercial dishwashers that include
heat recovery on the wastewater are readily available and many existing dishwashers can be
retrofitted with wastewater heat recovery systems. Depending upon the amount of use the
dishwasher gets, these systems can offer good paybacks.
4.2 ENERGY CONSERVATION MEASURES
During discussions with owners and managers of commercial properties in St. Lucia, Grenada, and
Montserrat, the overriding concern about implementing energy conservation measures was initial
capital cost. Many commercial establishments find it difficult and/or expensive to raise money for
capital improvement projects.
However, there are examples of conservation programs in commercial buildings achieving significant
savings with very little investment required. A government office building in St. Lucia was able to
reduce its annual electrical energy consumption by close to 15% through a staff energy awareness
program. That program educated employees in the building to be vigilant about switching off energy
using appliances within their workspace when not in use. Lighting levels in most open office areas
were reduced with no complaint from workers about lack of sufficient ambient light. Building
cleaning and security staff were instructed to ensure that all air conditioning equipment was switched
off after hours, and only a minimum number of lights left on to allow cleaning and security patrols.
The initial 15% saving has fluctuated over the years, as staffing levels and building operating hours
have changed, but the underlying approach is still valid, to empower people to control energy use to
suit their own requirements.
In the hospitality industry, it is not as practical to ask guests to switch off unnecessary appliances
when not in use. One campaign with hotel guests that has been successful is voluntary reuse of

4-9
towels and bedding without daily laundering. Guests are asked to place a card on the bed if they do
not require fresh bedding. The bed is then made without changing and laundering the sheets.
Similarly guests are asked to place towels they want replaced on the floor or in the bathtub. Other
towels will be hung back on the towel rack for reuse. This measure costs the hotels very little but
saves thousands of litres of water annually, as well as the energy required to heat laundry water and
to wash and dry that laundry. This program would have a doubly beneficial effect in OECS
countries, due to the high cost of supplying both potable water and electricity.
One potential method of funding more expensive energy conservation measures, such as installation
of solar hot water heaters, more efficient air conditioning systems, or digital control systems is using
an Energy Services Company (ESCO). An ESCO is a company that offers services to implement
energy conservation measures in a facility at no up front cost to the customers. The ESCO recovers
its investment by receiving a portion of the savings from the facilities utility bill over a contracted
period of time. The ESCO business has been successfully operating in North America for over
twenty (20) years and has now been spreading to other parts of the world. This concept was
mentioned during discussions with commercial facility owners and managers in St. Lucia,
Montserrat, and Grenada and there was a high level of interest. Table 4.6 provides a summary of
the energy conservation measures (ECM) undertaken at four Jamaican hotels by an ESCO business
based in Jamaica.
Opportunities in the residential sector are, as mentioned earlier, concentrated in lighting, appliances,
and hot water production. Capital investment in improved technology for efficiency gains will be
difficult for many homeowners. A residential solar hot water program in Barbados has been very
successful in converting residential hot water production form electric to solar. One reason for this
success was that the government provided up front financing for the units, and allowed homeowners
to defer repayment until the following year. This financial incentive coupled with a good public
relations and marketing campaign, has resulted in the installation of solar units on approximately 1/3
of the residences in Barbados. Most homeowners have seen paybacks of 2.5 years.

4 - 10
Table 4.6
Summary of ECM Undertaken at Jamaican Hotels
ECM Annual Savings Payback Return on

in Years Investment
KW.h % Total kW Cost
Savings (US$)
80 gallon/day retrofit solar 3,964 96% 9 540 2.0 42%

water heating system
ΑSensorstat≅ guest room 339,187 30% - 39,919 1.6 57%

occupancy sensor controller
Replaced mini-split with 198,000 31% 44 22,980 3.3 24%

water cooled hi-efficiency
100 ton screw chiller
Roof insulation with spray 23,350 72% - 21,780 1.7 52%

applied polyurethane foam
Install 100 ton air 108,308 8% - 11,914 0.4 241%

conditioner retrofit heat
exchanger to produce hot
water
The solar fraction throughout the OECS is similar to Barbados, and energy costs are as high or
higher, so there is no reason to believe that a similar program could not succeed in some or all of
the OECS.
ESCO involvement in the residential sector would be difficult due to the small loads and large
numbers of potential customers. A better solution likely lies with government or utility sponsored
incentive programs to encourage homeowners to purchase energy conserving products. An energy
efficient appliance act, similar to Canada or the United States, would mandate minimum efficiency
standards for household appliances that could be sold in the country. A public awareness campaign
run at the school, business, and household level would be designed to educate people about the
value of energy, and of the importance and financial benefits of conserving.
A great deal of new residential construction is also ongoing in most countries of the OECS. This
presents an opportunity to ensure that newly constructed homes will be more energy efficient than
4 - 11
older homes. To achieve this, the building code should be amended to include energy efficiency as
one of the design criteria. The most common mistakes seen in new construction were improper
orientation or siting to take advantage of natural ventilation from prevailing winds, inadequate
shading from direct sun, a lack of solar hot water heating, and lack of roof insulation. The
adaptation of energy provisions in the building code will also require a program of training and
certification for builders in order to ensure that they are qualified to construct buildings to the new
code standard.
4.2.3 Transportation Sector
As mentioned previously, most transportation in OECS countries is by private motor vehicle. There
was no evidence found of regularly scheduled public transportation or alternate energy vehicles.
Most of the urban areas observed were not designed with the automobile in mind. Most streets are
narrow, with little room for on street parking or sidewalks. The large number of vehicles on these
narrow streets results in traffic congestion with many vehicles idling in traffic using up valuable
petroleum resources without getting anywhere. Building larger roads is not a practical solution in
these densely populated urban areas when available land is scarce and expensive.
A much better alternative is to encourage people to use public transportation for the majority of
their short distance trips. None of the countries visited had a public transportation system, and bus
and mini bus operators do not frequently cooperate to provide regular reliable scheduled service.
For this reason, all the buses tend to be on the streets during morning and evening rush hours, and
the remainder of the time they are difficult to find. People will only be convinced to leave their cars
at home and use public transportation if the service is reliable, convenient, safe, and provides good
value. Further encouragement to use the service could be achieved through increased motor fuel
taxes, vehicle registration fees, and reducing the number of parking spaces in urban centres. The
benefits of such a program will be not only reduced energy consumption in the sector, but also
reduced levels of air pollution and freeing up space to make urban centres more pedestrian friendly.
This last factor has proven to be important in improving tourist traffic and commercial development
in urban centres.

4 - 12
Other approaches in this sector could include encouragement for the use of zero emission vehicles
such as bicycles and electric cars. Traffic patterns could be altered on some streets to give priority
to zero emission vehicles and public transportation vehicles. Government or utilities could implement
a pilot project by converting some or all of its vehicle fleet to electric vehicles. Once people see
these vehicles on the street, they will see that they can function quite well. Tax incentives and
reductions in import tariffs for zero emission vehicles will also assist in encouraging people to
consider alternate methods of transportation.
The fishing industry in the OECS relies heavily on outboard motors for most small boats. Table 4.7
shows a much higher number of outboards used rather than inboards. Outboards are available in
smaller sizes and can provide propulsion for even very small craft. Inboard engines are much more
fuel efficient and reliable, but are generally available only in larger sizes. The large discrepancy
toward outboards is more indicative of the size of most of the fishing vessels than a deliberate
decision not to use inboards. Opportunities for conservation here most likely requires reducing the
number of small fishing boats and standardization on larger, more efficient vessels.
4.3 APPLICATION OF ENERGY EFFICIENT PROCEDURES
As previously mentioned, opportunities for reducing energy consumption in commercial facilities

need not involve large capital investments in newer, more efficient technology. A well structured
program can allow significant reductions through better control of a facility’s energy use. Energy
efficiency can mean the efficient use of existing energy appliances and systems. Some common
procedures that can improve efficiency include:
.1 Raise the temperature in air conditioned spaces. Many people in these spaces complain
about being too cold. For a lightly clothed person performing light work, 80ΕF and 50%
r.h. is quite comfortable and will require considerably less energy than maintaining a space
at 75ΕF and 50% r.h.

4 - 13
Table 4.7
Propulsion Systems Used by Commercial Fishing Boats in the OECS - 1997
Location Outboards Inboards Note
St. Vincent 311 18 95% of outboards < 75 hp

80% of inboards > 100 hp
St. Lucia 798 6 98% of outboards < 75 hp
St. Kitts 133 34 90% of outboards < 50 hp
Antigua 330 135 75% of outboards < 100 hp
Montserrat 24 7 95% of outboards < 50 hp
Grenada 734 81 90% of outboards < 100 hp
Dominica 576 2 90% of outboards < 75 hp
British Virgin Islands 74 36 69% of outboards < 100 hp
.2 Use operable windows, window blinds and shades, and ceiling or portable fans to keep
building interior comfortable without the need for as much, or any air conditioning. Moving
air increases evaporative cooling from people=s skin.
.3 Ensure all non-essential energy using appliances are shut off when not in use.
.4 Shut off unnecessary lights, especially those close to windows during the day, and those in

4 - 14
occupied areas (occupancy sensors could be used for this). Use task lights for reading or
other work requiring additional light.
.5 Use cold water for laundry. Use laundry detergents specifically formulated for cold water
use.
.6 Instruct staff in the proper efficient use of all energy using appliances.
.7 Offer hotel guests the option of two (2) day laundry cycles instead of daily for bedding and
towels.
.8 Keep refrigerators and freezers full, and shut off units not required.
Many of the items previously mentioned for the commercial sector will also be applicable in this
sector. The majority of properties in this sector use much less energy per capita than the
commercial sector, however, so the savings associated with many of these procedures will not be
as significant. The size and growth of the sector, however, make even small savings per residence
significant if applied to the entire sector.
The electrical utilities interviewed during our site investigation all had a similar daily demand profile.
It showed a reasonably consistent load from 9:00 a.m. to 5:00 p.m., followed by a sharp increase
to a peak occurring between 7:00 p.m. and 9:00 p.m., followed by a gradual decrease to an
overnight low between 2:00 a.m. and 6:00 a.m., then an increase back to the daily load plateau at
9:00 a.m. The daily load plateau is attributed to commercial, institutional, and industrial loads, as
well as residential. It usually does not present a capacity problem for utilities.
The evening demand spike, however, is attributed mainly to the residential sector. People coming
home from work and school begin turning on lights, television, kitchen appliances, and using hot
water. It is this spike that utilities must provide additional generating capacity to satisfy, and this
additional generating capacity is otherwise under utilized. As overall system capacity grows, utilities

4 - 15
are forced to invest in new generating capacity sooner to meet this peak. They have, therefore,
acknowledged that it is in their best business interest to encourage conservation and efficient energy
use procedures, especially during the peak use periods.
A consumer awareness campaign has been started in Grenada using pamphlets distributed to
customers when they pay their bills. These pamphlets describe the various components associated
with determining the price of electricity and instruct people of the importance of not using electricity
unnecessarily. Further education attempts should be targeted to the schools, since children are more
attentive to the message delivered and they can take that message home and apply it.
4.4 NEW GENERATION OPPORTUNITIES
4.4.1 Renewable Energy Generation
From a renewable energy perspective, the countries of the OECS are in a very favourable position.
Abundant sunshine and consistent winds are common on all islands. Geothermal and hydro power
potential exists on some islands. Some islands also produce sufficient levels of agricultural residue to
make biomass generation possible. One need look no further than the many old windmills on
Antigua, no longer functional, that once formed the backbone of the sugarcane processing industry.
Entrepreneurs in the 18th and 19th centuries were able to utilize renewable energy for their benefit;
the same should be true in the 21st century.
With the exception of some hydroelectric power developments in St. Vincent and Dominica, the
OECS countries have no commercial scale renewable energy generation facilities. Some of the
technologies that may be applicable in the OECS are as follows:
4.4.1.1 Solar Photovoltaic Systems (PV)
Used mainly in small remote power and small-scale residential applications, the PV market is
increasing by about 1,500 systems each year in Latin American countries. These systems have an
average installed capacity in the range of 30 to 50 W, which provides adequate electricity for some

4 - 16
domestic use. PV systems require minimum maintenance, are well suited for remote locations, and
are less expensive than present alternatives11. Countries demonstrating a successful PV market
include Jamaica, Honduras and the Dominican Republic.
4.4.1.2 Solar Thermal Devices
Solar water heaters can provide hot water to domestic users, as well as in health centres, schools,
and other rural community facilities, and in small industries in hybrid systems. Costs of solar thermal
systems vary depending upon the size of the system, however, the operating cost of the system is
basically zero, and hence the investment cost will be rewarded throughout life long use of the
system12.
4.4.1.3 Stand Alone Wind Turbines
In the Latin American regions, the use of wind as an energy source is at a very preliminary stage.
Although successful in other areas of the world, small wind systems that provide energy for village
electrification, water pumping, battery charging, and small industrial uses are currently at a
preliminary feasibility study stage by the National Rural Electrification Cooperatives Association and
the American Wind Energy Association. Old style wind systems with multi-blade mills on wind
farms are under operation in Guatemala and Costa Rica, mainly for water pumping. Wind energy
studies and demonstration generation projects have taken place on St. Lucia and Montserrat. In
Antigua there are many old windmills, no longer in operation, that once were used to grind sugar
cane.
4.4.1.4 Wind/PV-Diesel Gas Hybrid Units
Hybrid units offer enhanced reliability, with reduced fossil fuel use. They show potential promise for
rural off-grid regions. These units could be used in communications systems or as electricity supply
11
J. Goldemberg and T.B. Johansson, (Editors) Energy As An Instrument for Socio-Economic Development,
United Nations Development Program, 1995, Chapter 6, p.4-5.
12
IBID
4 - 17
to villages, or to individual households13. This system is promising for many countries in the Latin
American region.
4.4.1.5 Micro and Mini Hydro
This technology is developing in many Latin American countries due to the geographic and climatic
conditions throughout the region; it has great potential since hydro power is a significant energy
source in Paraguay, Costa Rica, Uruguay, Brazil, Honduras, and Peru. The environmental and
social consequences of large dams is now recognized, and funding institutions will typically now not
support these projects, but are encouraging mini-hydro, “run-of-the-river”, power projects14.
Dominica and St. Vincent are the only two (2) countries in the OECS with hydro generation. These
plants are small and represent only a small portion of each country’s energy load. In most OECS
countries, fresh water is a scarce and valuable commodity.
4.4.1.6 Biomass Based Cogeneration
This is a larger scale technology used in plant facilities often with another power source that typically
involves combustion of a biomass product (wood waste, sugar cane bagasse, etc.) to produce
electricity and steam via a steam turbine generator. Biomass generation utilizing sugarcane bagasse
is the third most widespread renewable energy source in the region, with a rising share of final
energy demand. Countries incorporating this technology include Guyana, Cuba, Barbados, Brazil,
and Jamaica15.
During discussions with officials in the OECS countries, visited during the study the question of
biomass fired generation was raised. Concerns about deforestation and the cost of transportation
13
J. Goldemberg and T.B. Johansson, (Editors) Energy As An Instrument for Socio-Economic Development,
United Nations Development Program, 1995, Chapter 6, p.6-7.
14
IBID
15
1997, Summary, p .3-4.

4 - 18
of the resource to a generation facility was an obstacle to previous development attempts. In an

effort to reduce the transportation cost problem , small scale biomass generation projects producing
less than 500 Kw could be explored for areas currently underserved by the national grid.
4.4.1.7 Geothermal
Also a larger scale technology used in plant facilities, geothermal energy supply is slowly gaining
ground in the region. The share of geothermal energy in primary energy supply is very low,
however, it is an important source used along with electric power in Costa Rica, El Salvador, and
Nicaragua, which are countries that have a high share of geothermal energy in their primary energy
supply. In 1998, it accounted for 25%, and 11% of primary energy supply in Costa Rica and El
Salvador16.
Geothermal potential has been explored in both St. Lucia and Montserrat. Additional foreign
investment will be required to overcome technical challenged and develop these resources.
Overall, it appears that there have not been any major leaps into renewable energy uses in the
region. There are numerous existing cases in some countries, but they are isolated and marginal
when considered in the overall energy balance17.
4.4.2 Conventional Generation
Within the context of this report, the term “conventional generation” may tend to mislead, since it is
associated with the current situation, which has been described as inefficient and old fashioned.
However, conventional generation, from an efficiency improvement perspective, may have
application to the OECS energy regime.
16
Organizaciοn Latinoamericana de Energia (OLADE)Website: http://www.olade.org.ec/idiomas/ingles/
varios/sectorEnerg+(c)ticoCap3.htm\
17
1997, Summary, p.7.
4 - 19
Diesel engine technology has improved immensely in the past twenty (20) years. Modern stationary
diesel engines have achieved thermal efficiencies well in excess of 40% in a simple cycle
arrangement. Most utility diesels in use in OECS countries are not new, so an average efficiency of
36% is considered a reasonable estimate of the current generation. Efficiency enhancements to
diesel plants can be achieved by recovering the waste exhaust heat from the engines and using it for
generating additional energy. This is called a combined cycle arrangement and involves the
installation of a waste heat recovery boiler, steam turbine, generator, and associated equipment.
On a typical 3 MW diesel unit equipped with this additional equipment, an extra 800 kW or 27%
could be generated with only 3% increase in fuel consumption. This system would raise the overall
system thermal efficiency from approximately 36% to over 55%. For a base loaded unit running
8,100 hours per year, this installation would provide a simple payback of just over two (2) years
based on the current average cost of diesel fuel in the OECS. Our analysis suggests that this
technology is feasible for units of 2,500 kW and larger, operating for 7,000 hours per year or more.
Additional efficiency improvements in conventional generating plants can be gained through use of
variable frequency drives on variable load units, high efficiency transformers, and digital controls.
A cost of service study should be completed at all utilities so that they know exactly where their
inefficiencies are and how to go about addressing them. This study will also allow an accurate
determination of each utility’s marginal cost of production, which is important when determining the
purchase price for power provided to private generators.

5-1
5.0 INTERNATIONAL APPROACHES RELEVANT TO THE OECS SITUATION
This section profiles some international approaches to energy management that offer lessons learned
and techniques that have some merit for consideration in the formation of the OECS policy
framework. With one exception, the focus of the case examples is on initiatives that have been
applied in the Caribbean region. There is an interesting array of energy management initiatives in the
region, that range from a primarily private sector thrust in a small market niche to a large multi-year
program supported by the World Bank.
As is further elaborated, there really is no one single "model" that applies wholly to the OECS
context. Energy management initiatives, as applied to newly developing countries, have been
continually evolving with much of this evolution being a function of the donor-recipient relationship
between the development banks and individual recipient countries or regions. What is important in
examining these approaches is whether they have indeed helped to establish the "foundation" for an
eventual transformation of the energy management market, which is considered to be the necessary
outcome of an energy efficiency policy and supporting initiatives.
A market transformation refers to a concept that has been at the centre of institutional energy
planning (i.e., government and utilities) for roughly the past ten years. It has been characterized as a
"many-faceted strategy aimed at changing the structure or function of the market or the behaviour of
market participants to prompt the adoption of energy efficient products, services and practices."18
In other words, the sought after outcome of a successful market transformation is that the demand
for and supply of energy efficient products, services etc., becomes the norm rather than the
exception. One of the best examples continues to be the electric motors initiative developed by
B.C. Hydro, which resulted in the annual sales of high efficiency 1-200 HP AC polyphase motors
changing from 20% to 80%. Emerging from this experience is that several key conditions must be in
place for a transformation to occur:
∃ A champion with a long-term commitment.
18
Dan York, Energy Centre of Wisconsin, A Discussion and Critique of Market Transformation, 2000

5-2
∃ Energy prices and energy price structure that sends the appropriate signals to the market.
Specifically, this section profiles the following initiatives:
.1 The Jamaica Demand Side Management Pilot Program: This is a case example of a
donor bank's long-term commitment to support capacity in a country to develop and
deliver DSM.
.2 The Bermuda Energy Service Company model: This is a case example of how a proven
North American model has been applied to a small energy management market.
.3 The Barbados DSM and solar DHW initiatives: This case example illustrates the
challenge of moving from the study to implementation phase for DSM and also comments
on the experience of the country's solar DHW initiative.
.4 The compact fluorescent lighting initiative in Guadeloupe and Martinique: This case
example illustrates how a concerted effort by one utility can help foster some limited market
transformation.
5.1 CASE STUDY #1: JAMAICA PUBLIC SERVICE COMPANY DEMAND SIDE
MANAGEM ENT DEMONSTRATION PROJECT
5.1.1 Introduction
The Jamaica Public Service Company (JPSCo) is a crown owned electric utility company serving
all sectors of the Jamaican economy. Since 1994, JPSCo has been implementing a DSM
demonstration project designed to establish the foundation in Jamaica for sustainable and successful
energy efficiency initiatives. This profile highlights the key aspects of the project, the outcomes and
lessons learned.

5-3
This project was financed primarily by the Global Environment Trust Facility (GEF) of the World
Bank and the Inter-American Development Bank, along with some funding from the Rockefeller
Foundation and the Canadian Trust Facility. The World Bank has been the main institution involved
in the project, and considered the conditions in Jamaica to be suitable for demonstration of a full
scale, multi-faceted initiative. Indeed, at the time this program was launched, perhaps with one
exception, it was the most ambitious energy efficiency initiative in a developing country. A total of
$3.8 million in grant funds was provided to the program by GEF of the World Bank, with a
remaining $8.7 million in loans and grants from the other financing organisations19.
Prior to the DSM initiative, there had not been any significant gain in energy efficiency in Jamaica in
over twenty years. Indeed, Jamaica had a relatively high-energy intensity compared to similar
economies at roughly the same standard of living, such as Tunisia, Turkey, Colombia and Thailand.
JPSCo considered DSM as a possible means to offset the growing demand for electricity, without
incurring large investments to new generation and transmission and distribution capacity. JPSCo had
to deal with the high marginal costs of supplying electricity; Jamaica imports all of its primary fuel so
there was a significant foreign exchange element to JPSCo's operations20. Moreover, the utility was
also incurring a high percentage of line losses.
5.1.2 Key Aspects of the Project
The project targeted all sectors: residential, commercial/institutional and industrial but mainly
focussed on the first two sectors. The project fostered investments in energy retrofits, equipment
replacement and commercial new construction opportunities. There was also an element of the
project that focussed on renewable energy forms, notably solar domestic hot water (DHW) and
photovoltaic power (PV) applications.21 Underlying the development of sector specific activities
19
Martinot, E. and O. McDoom. Promoting Energy Efficiency and Renewable Energy. Global Environment
Facility. p.71.
20
Harris, H. Jamaica Public Service Company. "Energy Efficiency and the Jamaica Public Service Company"
presentation, Roundtable on Energy Efficiency, 1997, Kingston, Jamaica.
21
IBID

5-4
were three key "cross-cutting" initiatives:
∃ Internal Capacity Building: This refers to ongoing training and capacity building of the
JPSCo staff assigned to the DSM program. An independent DSM unit was established and
staff received both management and technical training and support.
∃ External Capacity Building: JPSCo facilitated a variety of training and awareness activities
directed to what would have been considered to be a potential energy management industry
(i.e., distributors, retailers, contractors, engineering community).
∃ Awareness Building: Considerable resources were allocated to establishing and then raising
awareness among all sectors of the economy of DSM as a solution to questions of energy
cost, reliability and quality.
At the sector level, the key program initiatives and results were as follows:
5.1.2.1 Residential Sector: DSM Package
The activities targeted to the residential sector were designed to generate an environment in which
households would undertake actions with the expectation that the investments would pay off and
that the trade allies would support the program. The focus was on lighting and hot water usage using
a package approach.
Initially, under a pilot phase, compact fluorescent lamps (CFL's), low flow showerheads,
faucet/sink aerators and refrigerator gaskets were provided at no cost to 100 participants. JPSCo
initiated a school based publicity strategy, generating press coverage and contact with students,
teachers, and parents regarding awareness of energy usage patterns of appliances and other
household products. Phase I provided a strong foundation for implementation of a more ambitious
program. An evaluation found that energy savings and peak demand reduction from the pilot
exceeded the projected impact22. Survey results found very high levels of customer satisfaction with
22
5-5
the products and services received.
This second phase of the residential program involved approximately 38 thousand customers
island-wide, selected at random and representing about 10% of the total residential customer base.
This phase offered customers the choice of one of three packages at a 50% discounted price
(JPSCo shared the other half): i) 3 compact fluorescent lamps (CFL's), ii) 3 CFL's and a low flow
shower head and iii) a home energy audit and direct installation of energy efficient equipment,
including up to 5 CFL's and the energy efficiency actions included in the Phase I program. The
program piloted a new distribution mechanism, since the CFL's were sold through local utility
offices where customers could get more information directly from JPSCo staff. Customers had the
option of a direct, up-front purchase at a discounted price or purchase with repayment through the
monthly utility bill23.
Follow up impact evaluation studies in 1995 and 1996 showed energy savings of higher than
expected results for Phase I24, as well as for Phase II25:
Table 5.1 Energy Savings Resulting from the Residential Program of the Jamaica
DSM Project
Phase I Energy Expected Savings Actual Savings

Annual Energy Use 18000 kW.h 58021 kW.h
Peak Reduction 2 kW 5.2 kW
Phase II Annual Energy Use 4,393 MWh 5,437 MWh
Peak Reduction 1.0 MW 1.67 MW

23
24
IBID
25
Harris, H. personal communication. August 20, 2000.

5-6
The program evaluations show the residential pilot to have been successful from both a cost and
awareness standpoint. Indeed, from the JPSCo perspective, the analysis showed a Benefit/Cost
(B/C) ratio of 4.0 (avoided cost savings to the utility of US$5.66 million); from the societal
stand-point, the B/C ratio was 6.3. For customers, the B/C ratio was 7.0 reflecting the rapid
paybacks from purchase of CFLs (less than 2 years). A survey of customers showed that the top
motivation for most participants was to save money on their monthly bills.26
The program also made inroads in the energy management infrastructure. Retailers began stocking
eligible products and, over time, the price of products such as CFLs declined with increasing
volumes. For example, the price of CFLs declined from Jm$800-$900 per unit to about $460 per
unit.
5.1.2.2 Residential Sector: Renewables
A solar DHW initiative was implemented to demonstrate the technical and cost performance of
such applications. More than 300 units have been installed in the residential sector. JPSCo solicited
bids internationally to supply the solar DHW systems and an Israeli supplier was selected. The 200
and 300 litre units cost $730 (U.S.$) and $1065 (US$) respectively, generating paybacks of 4-5
years. A key aspect of the solar DHW initiative was the establishment of a revolving fund.
Customer payments through their utility bills are allocated to a revolving fund for future utility
investments in solar DHW installations27.
JPSCo also launched a PV pilot to demonstrate the performance of such applications to off-grid
communities. "Solarex" panels with AC inverters were installed in 2 villages at a cost of about
$1000 (US$)/unit. JPSCo has estimated a 15 year simple payback on the installations28.
5.1.2.3 Commercial/Institutional Sector: Retrofits
26
Harris, H. Personal communication. August 20, 2000.
27
Harris, H. Personal communication, August 30, 2000.
28
IBID

5-7
JPSCo implemented retrofit initiatives in both the large and small commercial/industrial (C/I)
sectors. In the large C/I segment, initially the utility had hoped to secure third party financing
support from the Jamaican banking community, but ultimately most of the DSM investments in the
large C/I segment were self-financed. JPSCo financed approximately 17 energy audits to identify
energy efficiency measures deemed to be most cost-effective at each facility. Facilities were
selected based on a review of applications and ranking against the following criteria: high potential
for energy savings; visibility; facility type; occupancy types; and, an existing maintenance program.
Of these 17 customers, to date 6 have proceeded with retrofits. The retrofits targeted upgrades in
lighting (energy efficient lamps and ballasts), refrigeration, air conditioning and ventilation systems29.
In the small C/I segment, JPSCo financed the full retrofit up-front with customer repayment through
the utility bill. A total of 10 facilities implemented retrofits under this initiative30.
5.1.2.4 Commercial/Institutional Sector: Solar DHW
JPSCo also launched a limited solar DHW pilot in the C/I segment, with a specific focus on the
hotel sector with a 25-hotel Pilot. There are over 177 hotels on the island, and prior to this initiative,
only 22 of them were using some form of solar water heating. The program was designed to
demonstrate the technical performance, reliability and cost effectiveness of solar water heating in the
hotel sector as a pilot example. It involves complete installation and maintenance for five years,
while the customer/hotel operator repays the cost from the savings on their electricity bill. This
results in lower operation forecasts for the facilities and demand management for the utility31. To
date, 13 hotels have taken advantage of the program, bringing the total number of hotels using solar
water heating to 3532.
29
Jamaica Public Service Company Website: http://www.jpsco.com/press/dgedisave.htm
30
Harris, H. Personal communication, August 30, 2000.
31
IBID
32
Harris, H. Personal Communication, August 20, 2000.

5-8
Box 5.1.1: Case Example of Commercial Retrofit Program33,34
As one element of the commercial retrofit program, JPSCo's head office underwent a building retrofit as a
DSM Demonstration Pilot. The retrofit included air conditioning equipment including air handling units,
chillers and control systems, building interior and exterior lighting including sensor controls, and a
computerized energy management system. The following table demonstrates the changes in energy
consumption realized from these retrofits.
JPSCo Head Office DSM Project - Change in Energy Consumption (kWh)
Lighting HVAC Total
Before 909,260 1,402,887 2,598,642
After 239,946 575,765 1,102,206
Savings 669,314 827,122 1,496,436
% Reduction 74% 59% 58%
The installation cost of this was $630,000, with an estimated payback time of 3.1 years. Energy costs of 33%
have been realized as a result of these retrofits.
5.1.2.5 Industrial Sector
Despite initial efforts to develop a comprehensive DSM initiative in the industrial sector, JPSCo's
efforts in this sector were more limited than in the other two sectors. The "Economic Development
Incentive" (EDI) offered companies an off-peak rate to induce them to shift loads. Companies using
more than 1500 kVA per month were eligible to apply for the EDI. Those who increase their
off-peak electricity use by 3 percent in the first six-months on the program and attain increased
levels of 5 percent in a year will reap the benefits of significant savings on their electricity bills35. For
companies that are able to shift loads, an incentive of this nature can pay off. One local brewery has
saved over $2.4 Million36.
33
Harris, H. "Energy Efficiency and the Jamaica Public Service Company" presentation, Roundtable on Energy
Efficiency, Dec, 1997, Kingston, Jamaica.
34
Harris, H. "An Overview of the Jamaica DSM Project" presentation, Symposium on Sustainable Energy
Options for Small Island States, 1998, New York, US.
35
36

5-9
Table 5.2. Number of Facilities Involved in Each Program of the DSM Project37
Program Number of Facilities

Residential Phase I 100
Residential Phase II 30004
Cogeneration 1
Head Office Retrofit 1
Large Commercial Retrofit 5
Large Commercial New 1
Small Commercial Direct Installation 7
5.1.3 Status and Lessons Learned
The JPSCo DSM program is at a crossroads, mainly because there is great uncertainty as to
whether the utility will continue with a serious DSM mandate. In the past two years, there has been
a general winding-down of the program, as World Bank funding was phased out and utility
commitment declined. JPSCo management has been focussed on improving the overall financial
position of the company, with the goal of privatizing the operations. In such an environment, the
prospect of lost revenue (without rate basing the DSM costs) has weighed against competing
arguments of avoided or deferred investments in new generation capacity and other infrastructure
costs.
Scale is also an influencing factor. There is the view that the size of the DSM impact must be large
enough to avoid or defer new infrastructure investments. The reality is that it takes many years to
scale up a DSM program and, even then, DSM may never achieve the 25 to 50 MW reduction
commensurate with the minimum size for new generation plants38.
37
Harris, Hugh. Personal Communication, August 20, 2000.
38
Harris, Hugh. Personal Communication, August 30, 2000.

5 - 10
5.1.3.1 Key Lessons Learned
.1 Institutional Commitment over the Long-term: The current uncertainty of the JPSCo
DSM program serves to highlight the importance of long-term institutional commitment as a
key factor for success. In particular, the experience from North America shows quite
clearly that the most successful DSM programs were those where the utility was involved
for the long-run. It simply takes time to develop internal capacity and, at the same time,
build the external awareness, infrastructure and alliances to ensure that sector specific
initiatives will succeed.
In the JSPCo case, a critical part of the institutional commitment was the financial and other
support provided by the World Bank. To its credit, the Bank recognized that establishing a
strong foundation for DSM in Jamaica would take time and require resources for training
and capacity building. The Bank also showed flexibility insofar as they were willing to live
with adjustments to the scope and timing of specific DSM initiatives under the program.
This is an important attribute because no one really knows how some aspects of a
multi-faceted DSM program will fare in a largely new market for energy management.
.2 Balancing Market Transformation With Short-Term Actions: The JPSCo experience

also illustrates the challenges of applying proven North American DSM concepts to a less
developed economy with no real energy management experience. From the outset of the
program, there was a focus on market transformation, to help ensure market demand for
more energy efficient products and services while increasing the willingness of suppliers to
produce them. This focus necessitates action on many fronts in that the utility must
necessarily deal with the whole supply infrastructure as well as building awareness among
various customer groups. The JPSCo experience does suggest that the DSM activities
were starting to affect a market transformation. For instance, retail prices of some products
began to decline as distribution channels started to respond to increased demand by
increasing their stocks of the products.

5 - 11
On the other hand, JPSCo officials believe in retrospect, that program did not allocate
sufficient resources to short-term demonstrations with which awareness and acceptance of
new techniques and technologies might have been hastened.
.3 Addressing the First-Cost Barrier: As elaborated in section 6, the first-cost barrier

continues to be a major impediment to customer investments in energy management. The
JPSCo program was able to begin addressing the problem by subsidizing the initial cost and
then offering participants the opportunity to repay the investment through the utility billing
mechanism. Just as importantly, the incoming customer payments were allocated to a
"revolving fund" structure dedicated to future utility DSM investments. Many of the
commercial consumers bought into the energy efficient measures with credit provided by
the utility, suggesting that the high-first cost barrier is quite a significant hurdle39.
.4 Training Investment: As previously noted, the program allocated considerable resources

to in-house capacity building. JPSCo believes this investment has paid off with a capacity to
develop and deliver DSM programs and services.
.5 Establish an Understanding of the Market: The JSPCo program experienced growing

levels of awareness of DSM opportunities in the target markets, coupled with energy
efficiency investments that paid off with significant economic benefits. The program
evaluations suggest that activities designed to better understand the market contributed to
this success. These activities included market research on i) customer needs and
awareness, ii) product distribution channels, and iii) product and service availability and
quality. The phasing of specific DSM activities also enabled the utility to test DSM
approaches and concepts (e.g., the phasing of the residential package).
.6 Product Testing and Labelling: The effectiveness of the DSM program was enhanced by
the presence of an effective appliance testing and labelling program in Jamaica. Through the
39
Martinot, E. & O. McDoom. Promoting Energy Efficiency and Renewable Energy: GEF Climate Change
Projects and Impacts. Global Environment Facility (GEF) of the World Bank. October 1999. p.99.

5 - 12
Jamaica Bureau of Standards (JBS), the program requires all appliances sold in the country
to undergo energy performance testing.
5.2 CASE STUDY #2: BARBADOS
5.2.1 Domestic Hot Water Heater Program
5.2.1.1 Introduction
In Barbados, since 1992 households have been implementing solar domestic hot water heaters
(DHW) to address the high cost of providing DHW services through electric power. The
development of this initiative was a collaborative effort between the Energy Unit of the Ministry of
Environment and Energy and an energy services company (ESCO).
There were two critical elements to the program development and implementation.
.1 First, there was the issue of sourcing solar DHW systems that would operate reliably and
cost-effectively in the Barbados conditions. This requirement was addressed by examining
the existing technologies in use on the island - households have been gradually implementing
DHW systems for almost twenty years. This narrowed down the type of DHW system that
would operate optimally on the island. The materials for the system components are
imported and then assembled in Barbados by 3 companies. The key factor that secured the
buy-in from these companies was a government tax incentive to the private sector to
manufacture the units40.
.2 Next, there was the issue of customer ability to pay the up-front costs. The 60-gallon (240
litre) capacity units used in this program cost in the range of U.S. $2000 - $3000. The
government offered customers re-payment of the investment from their income tax return
the following year.
40
Ince, David. Energy Department of Barbados. Personal Communication, September, 2000.

5 - 13
5.2.1.2 Results
The program began in 1992 with the installation of 11,000 units. As of 1999, it is estimated that
there are about 31,000 units in operation, representing approximately a third of the residential
DHW market. This program has achieved such a significant success rate due its attractive financing
plan, relatively short payback period, and the high costs of alternative electric heating sources on
the island. Payback from investment in the units is estimated at only 2.5 years41.
5.2.1.3 Key Elements
The key elements of this program include:
∃ Technical assistance via an ESCO
∃ Technology transfer
∃ Technology promotion
∃ Financing incentives.
5.2.2 Demand Side Management Plan
5.2.2.1 Introduction
Barbados Light and Power is a public company providing power to all sectors in Barbados, roughly
92,000 customers. Growing peak demand in some key sectors of the economy had prompted the
utility to consider investments in new capacity. The utility was able to obtain a loan from the
European Development Bank. However, one of the conditions of the loan was that BLP had to
invest the equivalent of its interest payments on a DSM feasibility study.
41
Ince, David. Energy Department of Barbados. Personal Communication, September, 2000.

5 - 14
The DSM feasibility study was one of the most comprehensive assessments of energy management
potential undertaken in the region, and provides some useful indicators for other countries in the
region. Both technical and economic potentials were determined in the industrial, C/I and residential
sectors, with the threshold for the economic potential based on the utility's avoided cost of
generation capacity. In addition, the study also included a characterization of possible DSM
initiatives that would be suitable to the estimated potential. A comprehensive benefit cost analysis
was conducted of the DSM initiatives.
5.2.2.2 Results and Status
Overall, the study showed that there is significant cost-effective potential for DSM in all three target
sectors. Moreover, the analysis indicated that a well-designed and strategic set of initiatives would
also generate net economic benefits, to the utility, the customer participants, and to society as a
whole. Following completion of the DSM study, BLP conducted an in-house analysis of the system
cost implications of delivering possible DSM programs. The thinking at the time was that, together,
all of the analytical work would be used to make the case to the Public Utilities Board (PUB) to
support the utility's investment in DSM.
At the present time, there has been no follow-up on the DSM plan. The BLP Managing Director
has not yet made a decision of how the DSM costs should be treated, i.e., rate based or
capitalized. At the same time, there has been a delay due to the transition in mandate of the PUB to
that of a new organization, the "Fair Trading Commission".
The Barbados DSM experience underscores the challenges and risks in carrying through from the
study to implementation phases. Certainly, the study phase was very useful, because it provides a
quantitative basis for decision-making, which, in turn, establishes credibility with BLP senior staff
and board, the PUB and other stakeholders among customers and trade allies. The study phase
was also important to help increase the awareness of key stakeholders of what DSM constitutes
and the financial benefits it can reap.

5 - 15
However, on the other hand, a study of this nature establishes a momentum and expectations that
can serve to undermine the success of future, follow-up DSM activities. Companies, organizations
and institutions in the industrial and C/I sectors were consulted and cooperated with data and
access to their facilities for surveys and energy audits. Their engagement in the process also served
to increase their expectations that BLP would proceed with a reasonably ambitious DSM program.
It has been more than eight (8) months since the study was concluded and since final presentations
on results were made and, yet, no follow-up action. In particular, there are two sectors where this
lack of follow-up is likely to be of most significance, industry and the commercial sector.
At the time when the DSM study was conducted, several industrial companies had opted to
self-generate power using diesel gen-sets; they concluded this to be a less expensive option than
purchasing power from BLP. However, the prospect of the utility offering some DSM support
generated some genuine interest among these companies, and possibly a means with which the
utility could get them to opt back into the grid. If there is no near-term follow-up, this may confirm
the views of these and other companies that the utility is not really listening to their concerns.
The commercial sector had been exhibiting rapid growth, particularly in the hotel and office sectors.
This presented the utility with an opportunity to foster energy efficient designs into the new
developments. Again, failure to act quickly will result in significant "lost opportunities".
To summarize, the DSM study resulted in the following key outputs:
.1 At a median annual demand growth rate, the analysis estimated a technical potential for
energy management, by 2010, of 29% and 30% respectively, for energy and peak
demand.
.2 At the same growth rate, the analysis estimated an economic potential of 23% and 25%,
again for energy and demand savings respectively. Of particular note is that there was only
a small difference between the technical and economic potentials, indicating that most
actions are cost-effective against the utility's estimates of avoided cost of new generation
capacity.

5 - 16
.3 DSM programs were characterized and assessed for all three sectors. The programs are
designed to foster market penetration of the EM actions generating the best savings and as
well as being cost-effective. All three sector programs would have a strong awareness
component, but particularly focussed on the residential sector. There is also a strong
"cross-cutting" element focussed on working with the trade allies to ensure supply of quality
EM products and services.
.4 All of the programs were assessed to be beneficial positive from society's perspective, as
well as those from the utility and the participants, generating positive B/C ratios. The overall
B/C ratio from the ratepayer perspective was only marginally below 1 indicating that rate
impacts would be marginal.
5.3 CASE STUDY #3: THE ESCO EXPERIENCE IN BERMUDA
5.3.1 Introduction
Energy Service Companies (ESCOs) offer turn-key energy management services, primarily through
energy performance contracting (EPC) which can also include project financing. EPC is a
successful business in North America reaching in the hundreds of millions in annual sales. This case
study profiles how this private sector approach has taken hold in the Bermuda market.
BESCO was formed in 1995 as a non-regulated subsidiary of the Bermuda Electric Light Company
Ltd. (BELCO). The ESCO option emerged following some initial load research and DSM planning
conducted by a consulting firm for BELCO. The utility determined that, as an unregulated
subsidiary, energy management services could be offered to its customers without having the costs
of such an operation rate based (there have been no rate increases in the past five (5) years, with
the exception of a fuel adjustment clause).
BESCO services include: energy audits, energy master plans, turn-key project implementation,
control system design, lighting design, project/construction management, commissioning and

5 - 17
financing. They also provide power protection and control system design services for smaller
commercial operations and households. To date, BESCO has focussed on the C/I market,
primarily on institutional buildings.
5.3.2 Key Activities and Results
BESCO is now firmly established in the Bermuda energy management market and has developed a
strong in-house capability to develop and implement projects and services. BESCO has made
significant inroads in its target market and, as a consequence, is looking to expand operations off
the island to other countries in the Caribbean. The company estimates that approximately 70% of its
target market has been penetrated.
Some key aspects of the BESCO experience are summarized as follows42:
.1 Investment in project development: BESCO recognized early on that the company had to
invest considerable resources to generate customer awareness and demand for their
services. This investment not only included extensive and well targeted marketing but was
also embedded in the company's service offering. Initially, BESCO provided the up-front
energy audits and master plans at little or no cost to the customer (the company now
charges for these services).
.2 Develop Solid In-House Capacity: BESCO believes that its initial investment in
development of in-house capacity is now paying off with efficient and effective technical and
management capability, a capability that has served to make the company largely
independent from outside engineering consultants. At the same time, the connection to
BELCO has also helped as BESCO has been able to share some of the utility's in-house
resources such as purchasing, CAD and retail outlets.
42
Kevin Janzen, BESCO. Personal Communication, August 30, 2000.

5 - 18
.3 Customized Marketing: In a small market environment, BESCO quickly recognized the

need to customize its marketing efforts to the individual needs and characteristics of the
large C/I customer prospects. A focus on CEO and senior level officials has paid off for the
company. This focus has been particularly key to the challenge of working within the
constraints of the government procurement rules and regulations. BESCO has been able to
sell projects to government clients within these constraints because effective consultations
have convinced decision-makers of the benefits of the projects. In fact, on more than one
occasion the government has been convinced to allow BESCO to forgo payment on import
duties for energy efficient products, thereby reducing the overall project costs.
.4 Project Financing and Life Cycle Analysis: In part to combat the up-front financing barrier,
BESCO decided early on to market the financial benefits of the project opportunities using
a lifecycle cost approach. Although more effort has been expended in the marketing phase,
it has paid off with a greater understanding and awareness among their customers. Coupled
with this marketing approach has been the company's financing offerings, sourced either
from equity or third party sources (off-shore). Interestingly, about 35% of the company's
customers have chosen to self-finance the projects.
.5 Energy Management Actions That Work: Since the start of the BESCO operations, the
company has expanded and diversified its service and product offerings. The actions with
the best financial performance, which have been most frequently implemented, include
lighting equipment replacement, lighting design and redesign, and air conditioning
replacement and design with paybacks of less than 5 years. Control system installation and
management is also proving to be an important application for the company. BESCO is
starting to pursue other forms of energy supply, including combined heat and power, fuel
cells, wind and electric vehicles.
.6 Barriers: Despite the success of the company, there continue to be key barriers to market
penetration: i) lack of access to up-front project financing, ii) lack of awareness among key
decision-makers in the target markets, and iii) the high cost of doing business, primarily due

5 - 19
to the product costs (with the effects of transportation and duties).
5.4 CASE STUDY #4: OPERATION LAMPE BASSE CONSOMMATION: GUADELOUPE

AND MARTINIQUE
5.4.1 Introduction
Operation "Lampe Basse Consommation" (LBC) was a successful compact fluorescent lamp
(CFL) leasing program implemented jointly by Électricité de France (EDF) and L'Agencie de
l'Environment et de la Maîtrise de l'énergie (ADEME) in the French Caribbean islands of
Guadeloupe and Martinique. EDF provides electric power services to these countries.
In the late 1980's Guadeloupe's oil-fired power plant was nearing maximum capacity due to an
increase in tourism on the island. ADEME considered alternatives to building a new plant or
expanding capacity of the existing one. The utility was extremely interested in the possibility of
electricity conservation on the island because the retail electricity price of 0.6
French Francs (FF)/per kWh (approximately 11 US cents/kWh) is less than half of the actual
production cost. This situation translates into an annual loss of about FF 500 million per year for
EDF (approximately US$ 93 million)43. Electric usage studies were conducted as part of this
process, and it was determined that residential lighting was a significant share of evening peak
demand. Further market studies were done to determine alternatives for lowering peak demand,
and CFLs were identified as an excellent prospect. However, ADEME realised that customer
education would be necessary to endorse the program44.
43
The International Association for Energy-Efficient Lighting (IAEEL) website: http://www.iaeel.org/
IAEEL/NEWSL/1992/tva1992/PrN_b_2_92.html
44
The Results Centre Website: http://www.crest.org/efficiency/irt/119.htm
5 - 20
The objective of this residential DSM initiative was to reduce evening peak electricity demand
arising from residential and small commercial use of incandescent lamps. A key aspect of the
program was an innovative leasing scheme designed to address the high first cost of the CFL units.
Customers were allowed up to 10 CFL units at no initial cost on the condition that they lease the
units over a prescribed period of time. The payments were through the utility bills. Lease payments
were designed to be roughly the same or less than projected monthly energy and bill savings45.
5.4.2 Key Activities and Results
The LBC program has been very successful with a peak load reduction of 7 MW on each island, to
date. In Guadeloupe, roughly 350,000 CFLs were installed, resulting in energy savings of about
29,927 MWh. The success on Guadeloupe prompted the implementation of Operation LBC on the
island of Martinique the following year. In just a few months of program implementation in
Martinique, 345,000 CFLs were distributed via the leasing arrangements. To date, over 700,000
CFLs were leased by residential customers of EDF on both islands46. Prior to this program, only
about 1,000 CFLs were sold annually on the island 47.
Some key aspects of the LBC experience are summarized as follows48:
.1 Marketing Campaign: In 1992, ADEME and EDF launched an extensive media campaign
to raise awareness of the program among residents of Guadeloupe. The campaign involved
television, radio, and print awareness via coupons in the mail to every customer, which
allowed 10 CFLs at no initial cost.
.2 Product Placement: EDF and ADEME solicited bids from CFL manufacturers to supply
45
IBID
46
IBID
47
48
The Results Centre Website: http://www.crest.org/efficiency/irt/119.htm

5 - 21
the product for the program in Guadeloupe. A CFL manufacturing company, Osram, won
the bid for Guadeloupe since they could supply the CFLs in the timeliest manner. At the
same time, there was extensive consultation with local retailers to ensure their participation
stock and sell the product. Initially, over 100,000 15-watt CFLs were installed in 80 retail
stores. In the first day and a half, over 12,000 households redeemed their rebate coupons
good for up to 10 CFLs at a price of FF 89 each (approximately US$ 16.5). The special
price was about 1/3 of the prevailing retail price, 240 French francs. An additional 32,000
households placed orders for 250,000 more units, which had to be imported quickly.
Overall, the Guadeloupe program achieved a response rate of 34% of all households on the
island redeeming their coupons, which was an average uptake of 7.8 CFLs each. One
month after the initial round of rebates, a telephone survey of 400 households found that
80% of the CFLs had been installed49.
Philips' French subsidiary Mazda, who sells the Philips electronic CFL under the product
name Eureka 2, won the bid for the second phase of the program in Martinique. About half
of Martinique's 110 000 households responded to the offer. Each household could use their
coupons to get two, four, or six lamps from retailers on the island. Virtually every
responding household chose to buy the maximum of six lamps. A total of 350 000 lamps
were sold through the second phase of the LBC program50.
.3 Product Financing: The innovative leasing arrangement created a revenue-neutral or even

positive cash flow situation for participants on both islands, which allowed customers to
overcome the up front cost barrier. The rebate mechanism allowed consumers to spread
the payment for their CFLs over 6 sequential utility bills (18 months). The payment amount
was set so that the value of energy savings for lamps used four hours/day or longer would
be greater than the lamp payment. In addition, shop-owners received a rebate of FF 5 per
CFL sold 51.
49
50
51
IBID

5 - 22
.4 Scale: This was the largest and most effective CFL leasing program ever undertaken by a
utility; the program's success is remarkable given this large scale.
.5 Impacts: The CFLs sold in the first phase of the program in Guadeloupe saved EDF 19
million French francs/year (approximately US$ 3.5 million) of otherwise lost revenue for a
cost of FF 2.5 million (approximately US$ 460 000) for the first phase of the program. The
total cost per kilowatt-hour saved is about one-eighth of EDF's cost of producing electricity
on the island.

6-1
6.0 BARRIERS ASSESSMENT
Notwithstanding the potential for energy management in the OECS, there are several critical market
barriers, which will continue to impede take-up of cost-effective energy management actions. The
OECS is not unique in having to consider energy management market barriers. These barriers are
common in most less developed countries, and also existed in the developed countries for many
years until government and utilities intervened in the market.
To understand the energy management (EM) barriers in the OECS, it is necessary to turn to the
concept of the sustainable EM market, which is further discussed in Section 7.0. The sustained
activity of EM investments and supply in the OECS requires a transformation at both ends of the
market equation. The energy users in the commercial, industrial and residential sectors must
generate a sustained demand for EM products and services. In turn, there must be a capacity in the
OECS for quality EM products and services to be delivered. Hence, the barriers analysis is
designed to distinguish among barriers that pertain to each of these market elements. In some cases,
however, there are barriers that cut across the market as a whole.
6.1 CROSS-CUTTING BARRIERS
6.1.1 Power Quality
Voltage fluctuations, specifically under voltage or voltage sags, are problems reported by industry in
the region. Most industrial, institutional, and large commercial customers maintain onsite emergency
generators to guard against power outages. The high tech sector reported problems with voltage
fluctuations during meetings in St. Lucia. It was also reported to be a concern to the
telecommunications industry. A great deal of future job prospects are in communications and
information technology, both of which require consistent power supplies to run their computer
networks. An economic growth model based upon attracting and retaining well-educated people to
locate high tech firms in the OECS will be hampered, if the problem of reliable power supplies are
not addressed.

6-2
6.1.2 Electric Rate Structure
Electric rate structures, whether from the government or private utilities, do not provide many
incentives to encourage energy conservation. All rates are based solely upon energy consumption.
No demand metering of large customers is done, even though it has been proven to be a very
effective incentive for demand management. Time-of-day rates are also not available, which could
encourage users to implement load shifting. Discussions held with utilities and large customers
confirmed the lack of any incentives in the rate structures.
6.1.3 Access to Affordable Financing
6.1.3.1 Overview
This is a critical barrier to EM, as is the case in most less developed countries (and was a key
barrier in North America for many years). At the present time, project financing in the OECS is
more expensive and subject to more restrictive amortization periods than similar projects in North
America. Commercial loans at interest rates of between 15 and 20% are common. For energy
management, this situation is exacerbated by a very limited understanding among the OECS
financing institutions of energy management, in terms of the type of measures, the nature of the
transaction, the benefits to the bottom line, investment potential and how risk can be managed. We
know from the BESCO experience in Bermuda, for example, that the ESCO is using offshore
financing to develop some of the EM projects.
Energy management is a one -time, up-front investment in which the benefits are
expressed as a stream of savings over some period of time. Hence, the project financiers
must have confidence that there is some form of recourse, most commonly through collateralization,
but potentially through a recognition that the EM investment will generate a regular savings stream to
offset monthly financing costs. The OECS macro-economic situation has created an environment
where the financial community is understandably very careful about project financing. The financial
community in the OECS appears to exist to a greater degree to service offshore investors seeking

6-3
tax relief than in serving as a vehicle for development. Most major projects are owned and financed
offshore, so the local community has little knowledge or involvement with the bulk of the larger
businesses, which could benefit most from an EM program.
6.1.3.2 Cost and Terms of Project Financing
The present conditions for project financing in the OECS serve as a major impediment to EM. For
private companies, the cost of borrowing is high, more than 20%/annum if borrowing in local
currency. However, there are likely to be conditions under which OECS companies are able to
borrow at much lower rates using U.S. dollars.
Funding could also possibly be found through programs established by several large North
American utilities such as PG & E, Enron, and TransAlta. They will provide project financing in
exchange for transfer of greenhouse gas emissions credits arising from the project. This method of
financing is quite new and only a few examples currently exist. They are mostly in renewable energy
fields, such as wind and solar power, which are the two most abundant renewable energy sources
in the OECS.
Other funds may be available through the Caribbean Development Bank, InterAmerican
Development Bank (bilateral departments such as the SMSE group, and the International
Investment Corporation), World Bank ESMAP group and/or the International Finance Corporation
REEF Fund. We have contacted each of these organizations during the study and, while much
interest exists, funding for program planning and development seems to be quite limited, however,
there is potential for this. Funding for specific projects, however, is much more probable, via the
IDB IIC group and the IFC. This needs to be investigated further, and will require some dedicated
effort and meetings with these IFIs.
6.1.3.3 Categorization of Possible Energy Management Investors
The market research reveals that there are three typical categories of energy management investors
in the OECS. Financing packages need to be designed to meet the specific circumstances of each

6-4
of these groups.
.1 Multi-National Companies: This refers to companies that are part of multi-national

operations, including firms in the hotel and, to a lesser degree, manufacturing sectors. These
companies are likely to be able to access U.S. or other low cost financing, either as debt or
equity. These companies typically must adhere to corporate wide financial, operational and
environmental standards and, therefore, they would potentially respond more favourably,
and faster, to possible EM investments. Discussions held with representatives of several
international hotel chains with properties in the OECS indicated that most larger properties
have already begun some modest type of energy management program although they
admitted that it is usually at an individual property level and without much corporate
support.
.2 Large OECS Owned Operations: This refers to OECS companies that may be in a
position to finance projects from equity or, conversely access lower cost U.S. $ financing.
.3 Small to Medium Sized Companies: This final category of investor has limited capital and
many of these operations may have to borrow project funds solely in local currency.
Moreover, they have more limited technical know-how than the other investor categories
and, therefore, are likely to be significantly less responsive to EM investments.
6.1.4 Lack of Product Testing and Performance Labelling
There are presently no regulations in the OECS requiring the testing of energy using products for
their energy performance, nor mandatory performance labelling. Such regulations are common in
most developed countries. The lack of such requirements poses a considerable challenge to the
market penetration of energy efficient products, as transactions for such products will continue to be
based on current performance levels.
6.2 BARRIERS AFFECTING DEMAND FOR ENERGY MANAGEMENT

6-5
Energy management decision-making is a process starting initially with an understanding of the need
for the opportunity, and then potentially moving ahead to making choices about the EM measures,
product/service availability and financing. It appears that in the OECS there are barriers at each
stage of this EM investment process, which together generate an overall perception of high risk that
often overshadows the tangible investment returns from the actions. This situation is further
exacerbated by the fact that in the productive sectors, as well as among institutional organizations,
EM is ancillary to their day-to-day operations. Together with the fact that there is currently a lack of
interest in, and general knowledge of, energy efficiency makes the EM investment process a
significant challenge. This lack of awareness and action exists despite the fact that OECS electricity
prices are high, generally 200 % higher than that of the U.S., for example.
More specifically, the specific barriers affecting demand for EM can be summarized as follows:
.1 Lack of Awareness of the benefits of EM: The productive sector, institutions and
households do not fully realize the financial benefits of EM investments, both in terms of
reducing operating costs and improving performance. Contributing to this problem is the
fact that many companies do not appear to fully understand costs within their operations.
Most also do not appreciate the environmental benefits associated with reduced energy
consumption.
.2 Awareness of the EM opportunities: The different sectors of the OECS economy also
are not fully aware of the EM opportunities within their operations. This does not only
include large capital intensive measures, but also no- and low-cost actions. There are two
critical factors involved in the issue of awareness:
• Focus on first cost: As is common in many less developed countries, the

productive sector follows outdated equipment purchase and maintenance practices
that work against EM. Together, these practices reflect a general purchase attitude
that focuses almost entirely on lowest first cost, rather than the cost-effectiveness of
the purchase over the useful life of the equipment. These practices include, for

6-6
instance: purchase of used/reconditioned equipment, rebuilding of equipment on-

site, and a lack of maintenance of equipment.
• Transaction Cost: For an energy user, the decision to invest in energy

management requires a transition from being a relatively passive player, to
becoming quite active in the selection and purchasing process. The purchase
decision requires the energy user to acquire information on product and service
suppliers, a significant effort often referred to as “transaction cost”.
6.3 BARRIERS AFFECTING THE SUPPLY OF ENERGY MANAGEMENT
There does not appear to be a capacity in the OECS to deliver quality, sustained energy
management services to the productive sector. This lack of capacity falls into three main categories
of deficiency: i) lack of properly trained professionals to design, spec, manage and service energy
management applications, and ii) lack of a domestic distribution network for energy management
products, and iii) building design-build practices that impede innovation.
6.3.1 Lack of Properly Trained Energy Management Professionals and Tradespersons
6.3.1.1 Lack of Properly Trained Energy Management Professionals
Many engineering professionals, both mechanical and electrical, lack applied training in the field of
energy efficiency and knowledge of technologies. There also appears a widespread tendency to
move away from analytical methods to perform designs, a tendency which is particularly acute in the
commercial sector.
6.3.1.2 Lack of Qualified Technicians/Installers
There is a lack of qualified and trained tradespeople (refrigeration technicians, steam fitters, boiler
technicians and others), which is a critical problem partly accounting for the widespread practice of
“breakdown” maintenance as opposed to preventive maintenance. This lack of qualified staff

6-7
creates a related barrier, where distributors are reluctant to offer higher efficiency or more
sophisticated equipment due to their inability to maintain or repair it.
6.3.2 Lack of Domestic Distribution Network
There is no mature EM distribution network in the OECS today, meaning that there are very few
wholesalers and retailers supplying advanced performance EM equipment. In the few instances
where suppliers profess to offer such equipment, the energy performance is still far below what can
be found in the North American markets. Equipment suppliers interviewed said they receive their
products directly from wholesalers in Europe or the U.S. No wholesaler of electrical equipment
either exists in the OECS, or is not considered to provide any useful benefit to retailers.
Retailers mentioned that many light fixtures imported from North America require conversion to
allow them to operate at the OECS standard of 220v 50hz. Some energy efficient light fixtures
were observed for sale, but their price was over three times the price for a similar fixture in North
America. They were not prominently featured in any stores, and two retailers mentioned that they
represent less than 2% of their total lighting sales. T12 40 watt fluorescent lamps are still the
predominant light fixture in most public buildings, although in North America they are no longer
sold, due to incompliance with energy efficiency regulations. The current North American standard
T8 32 watt lamp was found for sale in one store, but we were told they did not sell well and were
not being reordered.
6.4 SUMMARY OF BARRIERS
Table 6.1 summarizes the main barriers to energy management investment under the three
categories discussed above.

6-8
Table 6.1
Summary of Barriers Affecting EM Investment
Type Nature of Barrier

Cross- Cutting • Access to financing
• Lack of EE Standards/Labelling
• Power quality
Demand • Awareness of benefits of Energy Efficiency
• Awareness of EE opportunities
• Focus on first cost
• Transaction cost (product/suppliers information)
Supply • Lack of qualified tradespeople
• Lack of a distribution network
• Lack of trained professionals
• Design-built practices

7-1
7.0 RECOMMENDATIONS
7.1 RECAP OF MAJOR OBSERVATIONS
The investigation underlying this report confirms that the OECS economies can generate significant
economic and environmental benefits through investments in energy efficiency and renewable
energy. Using estimates from similar studies in other jurisdictions, there appears to be an economic
potential for energy use reduction in the range of 10% to 20%. This could result in an emissions
reduction of 35-70000 tonnes per year of CO2 from the electrical utilities alone. These ‘credits’
could then be sold on the world market. In effect, these opportunities represent the potential for the
OECS to embark on a ‘sustainable energy initiative’ that would result in significant environmental
and social benefits as well. As in the case of other countries, there is the opportunity to coordinate
or integrate this initiative with efforts to foster cleaner production in industry and commerce. To
summarize, the key observations emerging from this investigation are as follows:
.1 There is currently no structured energy management plan or policy in the OECS.
.2 There is general agreement among stakeholders of the need and importance of energy
management.
.3 Energy costs in the OECS are, on average, 200 to 300% higher than North American
averages.
.4 There is a general lack of awareness of energy management among energy consumers,

building designers, and facility managers.
.5 The potential for renewable energy utilizing wind and solar systems is excellent.

7-2
7.2 SUSTAINABLE ENERGY PROGRAM
In view of the findings in this report, it is recommended that the OECS establish a multi-year
sustainable energy program commitment. For the purposes of discussion, this program will have
the following vision statement:
OECS Sustainable Energy Program-Vision Statement
Improvements to the efficiency with which energy is used in the OECS economies, as well
as increased utilization of renewable forms of energy are the two cornerstones of the
OECS Sustainable Energy Program. The Program is a key component of the OECS
commitment to Cleaner Production. The Program provides the resources and structure to
effectively meet practical and realizable objectives. This is a long-term commitment to
ensure effective capacity building and sustainablity.
The OECS Sustainable Energy Program will be implemented consistent with the following
principles:
.1 Long-term Commitment: Resources should be committed for a minimum 5 years. The

experience in other developing country jurisdictions indicates quite clearly that a
commitment of this degree is necessary to build capacity among trade allies, institutional
staff and establish other critical program elements (e.g., demonstration projects and product
testing).
.2 Practical Solutions: The program should be oriented to providing practical solutions in

meeting reasonable goals. This means that the program approach should be to take
advantage of the OECS energy management market characteristics, rather than to try and
create a ‘model’ that doesn’t really apply to the circumstances of the region. One of the
key advantages is that a small number of large energy users can be singled out for a near-
term focus of activities, such as energy audits of each energy user followed by a plan to

7-3
implement energy management recommendations from the audits. These users could
become the demonstration models required to launch a public awareness campaign.
.3 Addressing Key Barriers: The Program will be designed to address the key barriers
impeding accelerated market penetration of energy management actions.
.4 Measurement, Monitoring and Reporting: The Program should be supported by an ongoing

measurement and monitoring system which is critical to reporting on results relative to
stated objectives. As indicated in the findings of this report, there are some significant
energy data gaps in the OECS. The absence of acceptable data will serve to undermine
the Program because there will always be doubt as to the validity of results.
7.3 TIMING AND STRUCTURING OF THE PROGRAM
On the assumption that this will be initially a 5 year Program, it is recommended that the roll-out
presented below be considered for development and implementation of the Program. The proposed
Work Breakdown Structure for the Program involves three components. All three components will
be implemented in parallel, but the first two components will receive the most focus in the short term
and contain the items considered to be first steps.
7.4 PROGRAM COMPONENT # 1: BUILD AND MAINTAIN THE PROGRAM
7.4.1 Objective
To establish the foundation for Program success through development of the Program approach,
identity, administration and professional capacity.
7.4.2 Overview

7-4
This work component will focus on developing and maintaining the Program operation. To be
effective the Program will have to achieve a professional capacity to deliver its services and develop
an administrative regime to track and manage its budget. The work activities would include:
.1 Complete program design: This would require extensive consultations with key
stakeholders in the OECS as well as externally, among the development banks, for instance
(see below). Clearly, the electric utilities are a key ally here and there are important
questions to be addressed in terms of the nature of their involvement, and the means by
which their participation can be financed under current regulatory and accounting
circumstances.
.2 Establish Funding and Structure: There is a strong potential for the OECS to seek support
from various international development banks and bilateral agencies for some co-funding of
the Program. The World Bank continues to be a leading proponent of energy management
and provides support through various channels including Official Development Assistance,
the IFC and the GEF. The Inter-American Development Bank and Caribbean
Development Bank are also possible allies.
.3 Establish and maintain Program allies: This will involve establishing a regular forum and
structure for communication among key allies such as utilities, government agencies, and
industry associations (e.g., Caribbean Association for Sustainable Tourism).
.4 Develop internal capacity: This will involve the design and implementation of a training
curriculum for Program staff. This training must take into account efficiency and
conservation opportunities in the transportation sector as well as the building and industrial
sectors.
.5 Develop policy, legislative and regulatory proposals (see Program Component # 3).
.6 Operate as the institution to assemble, negotiate and market projects designed to generate
certified GHG emission reduction credits.

7-5
7.5 PROGRAM COMPONENT #2: EDUCATION AWARENESS AND CAPACITY

BUILDING
7.5.1 Objectives
The objectives of Program Component #2 are:
∃ To increase awareness among energy users and energy management (EM) trade allies of
economic and environmental opportunities and benefits.
∃ To demonstrate technologies, methods, and techniques necessary to implement successful

EM projects.
∃ To demonstrate how EM planning can be implemented into disaster preparedness

management and planning.
∃ To build capacity among the trade allies to deliver quality and reliable EM services and
products.
∃ To reduce risk, in the short term, associated with energy management investments.
7.5.2 Barriers Addressed
The barriers addressed by Program Component #2 are:
∃ Lack of awareness and understanding of energy management opportunities and benefits.
∃ Perception of risk associated with EM investments.

7-6
∃ Difficulties in accessing affordable equipment. Import duties on energy efficient products

range as high as 60% in some OECS countries. This drives the price of even small items
like compact fluorescent light bulbs beyond the means of many consumers. Lower
efficiency products produced in Caricom nations are not subject to the same levels of duty.
7.5.3 Overview
This Program Component would comprise a range of activities designed to educate the market on
energy management opportunities and create awareness as the basis for generating demand for EM
products and services. It is important to note that this type of effort must be coordinated carefully
in conjunction with the other components designed to establish the capacity to supply EM and the
institutional changes necessary to address other critical barriers. In effect, this Program Component
would constitute four main thrusts: i) project demonstrations, iii) a ‘key accounts initiative’ iii)
specific education and awareness activities, and iv) trade ally capacity building.
The facilitation of demonstration projects is an effective means of showing the market that EM does
pay off with financial, environmental, and other benefits. Demonstrations also show trade allies and
the financial community that this is a legitimate source of business revenue. Technologies and
applications appropriate to the conditions of the OECS would be the focus of the initiative, both
commercially available (e.g., efficient lighting and cooling options) and leading edge (solar DHW,
electric vehicles, fuel cells, small scale biomass generation) technologies. One important purpose of
the demonstrations is to show EM working at a local level as opposed to a national or regional
level. Small scale demonstrations managed at the local level may get greater interest from people if
the projects are considered to be more relevant to their own situation.
The recommendation to develop a key accounts initiative is based on the recognition that within the
OECS economies there are a relatively small number of large energy consumers. The concept then
would be for the Program to work closely with these energy users to develop customized
approaches to EM. One opportunity could be to work with BESCO, the Bermudan Energy
Service Company highlighted in the case examples section of the report, to foster some commercial

7-7
transactions of EM investments. BESCO is looking to move beyond the Bermudan market.
Some of the key program activities would be:
.1 Demonstrations (general and for the Key Accounts):
∃ Market the activity and identify suitable candidates.
∃ Develop terms and conditions for project submissions, selection etc.
∃ Develop a portfolio of qualified suppliers.
∃ Manage feasibility assessments.
∃ Facilitate project development.
∃ Monitor and verify energy savings and emission reductions.
.2 Education and Awareness
∃ Ensure all public education campaigns include the environmental benefits of

improved energy management, including reductions in GHG emissions.
∃ Encourage utilities to begin public education programs to make energy consumers

aware of energy saving technology and procedures.
∃ Begin an electric vehicle promotion campaign by converting a fleet of government

or utility vehicles to electric. Provide frequent public updates about the progress of
the program highlighting the amount of fuel saved and the amount of pollution
avoided.

7-8
∃ Establish energy conservation programs in schools and have students participate in

the planning, implementation, and monitoring of the programs. Set up friendly
competitions between schools to see which can achieve the largest savings.
.3 Trade Ally Capacity Building
∃ Establish a chair in energy efficiency at UWI, encompassing efficient building

design, clean production, and supporting tools and techniques. Sponsor students
from the OECS to study and conduct research. Use results to enhance codes and
regulations and develop training courses (e.g., people in the construction industry
including designers, builders, and suppliers).
7.6 PROGRAM COMPONENT #3: TRANSFORMATION OF THE INSTITUTIONAL

ENVIRONMENT
7.6.1 Objective
The objective is to help develop the institutional environment and capacity necessary to catalyze and
foster a sustainable energy management market.
7.6.2 Barriers Addressed
Program Component #3 addresses the following barriers:
∃ Weak policy, regulatory and legislative framework that discourages EM.
∃ Lack of information on credible solutions to the foregoing barriers.
∃ Energy pricing disincentives to EM.
7.6.3 Overview

7-9
This program component relates to the capacity among OECS institutions to introduce fundamental
policy, legislative and other changes necessary to address several crosscutting barriers to EM. The
recommended activities include:
.1 Foster studies necessary to assess and offer solutions to key institutional barriers.
This would include the transportation sector, which traditionally has been the most difficult
of the sectors in which to foster EM. There appears to be EM opportunities, for instance,
through improved traffic circulation in urban areas. Follow-up could include traffic flow
studies investigating such schemes as creation of more one way streets, elimination of on-
street parking on narrow streets, and designation of some streets, or portions thereof, with
bicycles/scooters designation only. These studies should also investigate the feasibility of
using various financial and tax instruments to foster EM investments.
.2 Mandate testing of energy using products. The focus would be on those products that
represent the bulk of energy use and emissions (lighting, air conditioning, motors, boilers,
domestic appliances, etc.) This testing would become the prelude to an eventual energy
performance labelling initiative. The Jamaica Bureau of Standards could be called upon to
assist with testing services.
.3 Revise national building codes to include minimum standards for energy performance in new
construction. This would have to be carefully phased in to take account of the need to
demonstrate design approaches and techniques, and to build capacity to provide effective
designs. The research work developed by the recommended chair in energy efficiency at
UWI could provide valuable assistance in assessing the effectiveness of new design
techniques. Code revisions should also incorporate a greater degree of disaster
preparedness into design by making buildings less reliant on outside sources of energy for
their entire energy needs.
.4 Impose a regulatory regime under which electric utilities would be required to, and have the
financial leeway to, develop and implement EM programs. Currently, most utilities are

7 - 10
government subsidized as far as pricing structure is concerned but this structure also inhibits
the utilities’ ability to generate profits to use for development and implementation of the type
of EM projects discussed here.
The regulators must have legislative powers to force utilities to consider EM plans and
actions, including submission of integrated resource plans. For instance, utilities in the
region have an opportunity to revise their tariff structures as a tool to provide greater
incentives for consumers to manage their energy demand and consumption. Examples
include preferential time of day rates and demand metering of larger customers. The
regulatory regime would also be the appropriate environment to push for better power
reliability and quality, both necessary pre-conditions to EM success (e.g., develop plans for
region wide voltage and frequency standardization).
.5 Remove or reduce import duties on EM products, including energy efficient products (high
efficiency appliances, lamps) and renewable energy technologies such as DHW solar units,
photovoltaic systems, and wind turbines.

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IDENTIFICATION OF POLICY FRAMEWORK OPTIONS AND

IDENTIFICATION OF POLICY FRAMEWORK FOR ENHANCED EFFICIENCY

1.0 INTRODUCTION ........................................................................................................ 1 - 1

2.0 OBJECTIVES ............................................................................................................... 2 - 1

3.0 BASELINE CONDITIONS ......................................................................................... 3 - 1

4.0 OPPORTUNITIES FOR ENERGY MANAGEMENT.............................................. 4 - 1

TABLE OF CONTENTS Cont.

6.0 BARRIERS ASSESSMENT........................................................................................ 6 - 1

TABLE OF CONTENTS Cont.

2.1 RECAP OF MAJOR OBSERVATIONS

.1 There is currently no structured energy management plan or policy in the OECS.

Lewis Engineering Inc.

2.2 SUSTAINABLE ENERGY PROGRAM

OECS Sustainable Energy Program-Vision Statement

2.3 TIMING AND STRUCTURING OF THE PROGRAM

2.4 PROGRAM COMPONENT # 1: BUILD AND MAINTAIN THE PROGRAM

2.5 PROGRAM COMPONENT #2: EDUCATION AWARENESS AND CAPACITY BUILDING

Some of the key program activities should be:

.1 Demonstrations (general and for the large users):

Lewis Engineering Inc.

.2 Education and Awareness activities for the public

2.6 PROGRAM COMPONENT #3: TRANSFORMATION OF THE INSTITUTIONAL ENVIRONMENT

Lewis Engineering Inc.

Lewis Engineering Inc.

Lewis Engineering Inc.

Lewis Engineering Inc.

3.0 BASELINE CONDITIONS

3.1 CURRENT ENERGY SITUATION

3.1.1 Energy Consumption

3.1.2 Energy Pricing

Lewis Engineering Inc.

Figure 1. Energy Consumption per Capita in Selected Countries

Country Population Annual Electrical Energy per Capita Consumption

Electrical Energy Consumption

Lewis Engineering Inc.

3.1.3 Energy Supply

3.2 CURRENT ECONOMIC AND INSTITUTIONAL SITUATION

Lewis Engineering Inc.

Lewis Engineering Inc.

3.3 CURRENT GOVERNMENT AND UTILITY PROGRAMS AND POLICIES

With regard to energy conservation or efficiency programs currently offered by governments or

Lewis Engineering Inc.

Lewis Engineering Inc.

4.0 OPPORTUNITIES FOR ENERGY MANAGEMENT

4.1 NEW TECHNOLOGY APPLICATIONS

4.1.1 Residential Sector

4.1.2 Commercial Sector

Lewis Engineering Inc.

Figure 2. Typical Residence

Residential Electrical Consumption

Potential Energy Improvements

Item Installed Cost ($EC) Annual Savings ($EC) Payback (yrs)

- all costs are in EC$

Lewis Engineering Inc.

Figure 3. Typical Small Hotel/Guesthouse

Potential Energy Improvements

Item Installed Cost ($EC) Annual Savings ($EC) Payback (yrs)

- all costs are in EC$

Lewis Engineering Inc.