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According to The World Bank (2010), Latin America & the Caribbean are classified as upper-middle income economies and hence developing countries. Above all, they are small island developing states (SIDS) which face special challenges (UN 2010). Most Caribbean countries are heavily dependent on fossil fuels. Their energy consumption is based on almost solely oil products which account for more than 97% of the energy mix. Only Trinidad and Tobago, as a net exporter of oil products, and Barbados, which covers some parts of its oil and natural gas requirements by own resources, are countries with significant proven fossil fuel resources. Mostly medium- and high-speed diesel generators are generating electrical power (ECLAC/GTZ 2004). Vulnerable to external factors such as fluctuations in energy prices, diseconomies of scale have a big impact on the costs of generating power on small islands (Ehrhardt & Oliver 2007). This results in high electricity prices, generally between 20 and 35 US cents per kWh, much higher than in the USA or Europe (Roper 2006). Heavy economic burden of gasoline imports, political dependency, and the enormous untapped renewable energy potential, combined with failing investment costs for renewable energy projects, made governments and electrical utilities rethink and consider the use of renewable energy sources (ECLAC/GTZ, 2004). But despite the substantial wind, solar, hydropower and biomass resources, renewable energy still provides less than 2% of the region's commercial energy (CREDP 2009). In the English- speaking Caribbean Countries some attempts to invest in attractive renewable energy projects were made by regional and international private investors but these initiatives were turned down due to restrictive energy legislation unfavorable for independent power producers (ECLAC/GTZ, 2004). The main characteristics of Caribbean countries are: • Small scale economies and thus energy markets • Relatively high GDPs (e.g. Trinidad, Barbados, Grenada) • Extremely dependent on oil import (except Trinidad and Tobago) • Longstanding private electrical utility monopolies • Extensive electric power coverage, up to 99% • Some of the highest electricity tariffs on the globe • Readily available, but mainly untapped renewable energy potential (ECLAC/GTZ 2004, Loy & Farrell 2005) Introduction 3PDF Image | CARIBBEAN RENEWABLE ENERGY DEVELOPMENT PROGRAMME
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