2006 Miami Conference

Reports

ENERGY AND POWER GENERATION: EFFICIENT DELIVERY – CHALLENGES AND SOLUTIONS
TUESDAY, DECEMBER 5, 2006
2:00 PM-4:30 PM

Moderators: Nigel Hosein, Caribbean Electric Utilities Services Corporation (CARILEC)

Discussants: Juan Belt, U.S. Agency for International Development; David Dunbar, Mirant Caribbean; Alejandro Melandri, Inter- American Development Bank; Ignacio Rodriguez, PA Consulting; Peter Williams, Barbados Light & Power; Anibal Mejia, AES Latin America

The Context:
Public and privately owned power generators face the challenge of increased regional energy demand by consumers. The investment decisions made by power generators now, will dictate the effectiveness and quality of electricity delivery in the medium and long term. The right investment decisions must be guided by a policy framework that ensures returns for investors while ensuring the needs of the public and industry. These decisions lie in the hands of power generators and governments and can only be made through collaborative efforts.

The Challenges:

How do energy generators efficiently and cost effectively meet this growing demand?
How do power generators attract investment to upgrade aging infrastructure and facilitate grid integration?
What role does the private and public sector play in load sharing and implementing newer, more efficient technologies?
Are current national policies geared to promoting the right kind of investment to meet these future economic and social needs?
Are there regional best practices in efficient power delivery?

Points and comments brought up in the session:

Public/private sector partnership is a key ingredient in moving the sector forward. Governments need to work together with the private sector in sharing the risks (both technical and financial) so that these risks can be easier handled.
There is need for more public information on the power industry especially from an investor perspective. The IADB intends to commission a regional industry to assist in this regard. Expected completion of study is end of 2007.
The utilities require a more customer focused approach. The implementation of benchmarking to help with performance monitoring will greatly assist in this regard. Barbados Light & Power is an example of a utility that has recently implemented benchmarking to assist with better serving the customer.
The introduction of new technologies and alternative fuels is required. Of course renewable technologies must be implemented where feasible. Also, waste-to-energy technologies should be investigated given the huge problem with waste disposal in the region.
Capacity building is required for employees in these new technologies. The regional/local technical colleges and universities must also offer courses in the new technologies to ensure an adequate pool of resources in the future.
Proper Energy Policies are required together with appropriate Regulatory reform. Mr. Ignacio Rodriguez (PA Consulting) presented a step action plan which adequately summarized what is required in this area:
- Clear roles and objectives must be articulated
- Strengthening of the regulatory independence is necessary
- Broadening of stakeholder participation
- Increased transparency
- Improving predictability – rules of the game must not change suddenly
- Increased accountability
The issue of limitations of the size of the individual country markets in the region was discussed. Therefore, there is a need to strengthen the markets. The need for integration and possible “pooling” of the projects/resources to present a bigger market was discussed. Also, interconnection of electricity grids should be considered where feasible. AES Dominicana offered its services with regard to utilizing/expanding its operations in the Dominican Republic to act as
a hub for the Caribbean Region.

Questions and Answers:

A question was asked on whether utilities in the region were currently using biofuels and the response was no. Someone also wanted to know if cogeneration was being performed and few successful examples were given in Latin America and Jamaica. The success of a geothermal project in El Salvador was briefly highlighted based on question with regards to this technology.

Recommendations made:

It is in the interest of the regional power generation stakeholders in the private sector to get national power generation regulators together for discussions. The major private sector players can initiate this since regional public bodies have been unable to gain consensus on pooling of projects and resources over the years. AES is considering plans to host a Conference on Power generation regulation and integration in Dominican Republic and exhibit the successful models they have been employing.
Caribbean utilities and renewable energy entrepreneurs can model efforts in technical and financing aspects better by reviewing case studies employed in Central America – especially in cases of co-generation, biofuels and geothermal energy. Successful case studies in these countries can potentially be replicated in the Caribbean and such cooperation can also include expertise and technology transfer as well as attract investment.