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The Ministry, with the support of the OAS-CSEP, in 2010 finalized the final draft National Energy Policy and its corresponding action plan. The NEP is assessed in more detail below. The main challenges in the institutional framework are the finalization of the NEP. The legal, policy, and regulatory framework, the Grenada Electricity Services Limited Act (1990) established GRENLEC, and the Electricity Supply Act (1994) granted GRENLEC exclusive rights to generate, transmit, distribute, and sell electricity in Grenada, Carriacou, and Petit Martinique until 2073 (Section 3). Section 4 empowers GRENLEC to issue sub-licenses for the generation, transmission, and distribution of electricity; and Section 5 permits a person to “generate electricity for his own consumption and use (a) on any premises used exclusively for private residential purposes; (b) solely during periods of interruption of supply by GRENLEC; (c) and located in an area not supplied with electricity by GRENLEC.” Section 13 provides for tax exemptions of all plant, machinery, equipment, and vehicles imported by GRENLEC. Section 14 provides income-tax concessions for any losses suffered by GRENLEC. Section 30 exempts GRENLEC from paying stamp duties. Section 13 could be deemed to also apply to RET. Also applicable to renewable energy is Section 25, which permits GRENLEC to harness water or wind power, without charge, for the purpose of providing the public with electricity. Section 26 provides that the “Government shall, whenever requested by GRENLEC, acquire under the provisions of the Land Acquisition Act . . . any land reasonably required by GRENLEC for the purpose of its business of generating, transmitting, distributing, or supplying electricity in Grenada. . . .” This provision also seems to apply to the establishment of wind farms. In 2008, an Interconnection Policy was drafted in Grenada to allow customers to install renewable energy generation plants (<5 MW) to GRENLEC’s distribution network. This policy seeks to attract dissemination of renewables at a small scale. A fast-track interconnection process is given to installations of less than 10 kW. Moreover, the policy delineates necessary compliance requirements of interconnection to avoid damage to customers or GRENLEC’s distribution network. Details of the terms, conditions, and application process also are described. A net-metering system is applied for installations of less than 10 kW at retail electricity prices. For systems larger than 10 kW, a payment rate for electricity fed into the grid has to be negotiated with GRENLEC. The policy also applies to photovoltaic, wind, fuel cells, micro wind turbines (less than 250 kW), biogas, and landfill-gas technologies. Grenada has been providing duty-free concessions for solar water heaters to the hotel sector since 2009. The concessions were revised in February 2010. The duty-free concessions have allowed a moderate spread of such systems in the tourism sector. Given the 2-year lifetime of the policy, it could be too soon to evaluate its effectiveness. The policy currently is one of a kind in the Eastern Caribbean, and it is recommendable that Grenada build on its experience with it, ensure its effectiveness, and amend it if necessary to encourage a broader and faster triggering of renewable energy applications. The main challenges in Grenada’s legal, policy, and regulatory framework are discussed below. • Given GRENLEC’s monopoly structure, there should be an overarching body for effectively regulating the energy sector. The ESA should be revised to address this issue. • The ESA also should be revised to address some of its very stringent provisions on self-generation. Unduly tight regulation discourages investment in distributed energy. 59PDF Image | Energy Policy and Analysis Caribbean
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