Seeking to Transform Energy in Saint Lucia

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APR

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by Eduardo Rodríguez

 

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Our new Caribbean Energy Dossiers offer a comprehensive deep dive into the energy landscape of seven Eastern Caribbean countries: DominicaSaint Vincent and the GrenadinesGrenadaSaint LuciaSaint Kitts and NevisAntigua and Barbuda,Trinidad and TobagoThe Caribbean Energy Dossiers provide an unprecedented level of information about the current energy mix in each country, as well as a forecast that gives readers inside information on projected growth in the energy sector.

Among the seven full members of the Organisation of Eastern Caribbean States, Saint Lucia has the largest population (around 182,000) and the largest electricity market. The resulting economies of scale mean that customers tend to pay less for electricity than on nearby islands.

However, electricity rates remain volatile, due to the almost total dependence on imported diesel for power generation. All fuel costs are passed on directly and equally to consumers, fully exposing low-income customers to the fluctuations of fuel prices.

Saint Lucia imports 3,000 barrels of oil equivalent per day of fossil fuels, mainly from Trinidad and Tobago; about two-thirds of this is used to generate electricity. The country’s sole utility, Saint Lucia Electricity Services Ltd. (LUCELEC), is responsible for the generation, transmission, distribution, and sale of electric power.

Per capita consumption of electricity is about 10% below the Latin American and Caribbean average. The commercial sector dominates, with 58% of sales—largely due to the importance to the economy of hotels and other tourism-related businesses. Forecasts show that “Saint Lucia will require continuous expansion of generation capacity in the immediate future as well as ongoing expansion for the next decade to meet peak demand,” the IDB report states.

It is no wonder, then, that Saint Lucia—like many of its neighboring island states—has embarked on an ambitious path to transform its energy base and make greater use of renewable resources. The government has set a goal of generating 35% of electricity from renewables by 2020.

Geothermal energy holds particular promise for this volcanic island. In late 2014, Saint Lucia received $2 million in funding from the World Bank to begin exploring how to develop its significant geothermal potential.

Of course, Saint Lucia’s location—it is one of the Windward Islands in the Lesser Antilles—also ensures widespread availability of wind and solar resources. However, the IDB report notes, such options have yet to be developed commercially.

The 2010 National Energy Policy, which is in the process of being implemented, establishes an overall roadmap for the energy sector and aims to address some of the challenges that have stymied the development of renewable energy in the past. These include a lack of a comprehensive energy policy, inflexible regulatory conditions, and technology and financing challenges related to development of geothermal sites, according to the report.

“The government emphasizes that market mechanisms are key to developing a more sustainable energy sector but it recognizes that there may be a need for government intervention to promote the exploitation of indigenous energy resources and to achieve higher energy efficiency and conservation,” the report states.

 

From Energy for the Future blog

 

 

 

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The views expressed in this blog are those of the author and do not necessarily reflect the views of the Inter-American Development Bank, its Management, its Board of Executive Directors or its member Governments.

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