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Unlocking Geothermal Power Eastern Caribbean Powerhouse

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Unlocking Geothermal Power Eastern Caribbean Powerhouse ( unlocking-geothermal-power-eastern-caribbean-powerhouse )

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11.1 Overview of the Electricity Sector in Saint Vincent and the Grenadines Saint Vincent Electric Services Ltd. (VINLEC), a vertically integrated state-owned electricity utility, has exclusive license to provide electricity in Saint Vincent and the Grenadines.166 VINLEC is overseen by the Ministry of Transport, Works, Urban Development, and Local Government. The Electricity Supply Act of 1973 establishes the structure of and regulates the electricity sector. This legal framework lacks laws and regulations to govern the exploration and exploitation of geothermal resources. Despite a policy framework conducive to geothermal development, including developing utility-scale renewable energy projects, the government has not yet implemented the measures called for in the Energy Policy and Energy Action Plan. 11.1.1 The electricity market in Saint Vincent and the Grenadines In Saint Vincent, VINLEC is the sole, vertically integrated provider of electricity services. VINLEC’s total installed capacity was 51.4 MW in 2013, which is more than enough to meet peak demand of 25.7 MW. Installed capacity is spread over five islands, but most of the installed capacity is in Saint Vincent and there are no interconnections between islands. Residents on other islands can self-generate if they receive VINLEC’s approval. In 2011, hydroelectric generation accounted for approximately 20 percent of total generation; the remaining 80 percent came from diesel plants.167 In 2013, peak demand in Saint Vincent was 25.7 MW.168 Total demand increased rapidly from 2004 to 2007, but flattened and even decreased at points from 2007 to 2013 (see Figure 11.1). Demand grew by 2 percent per year over the full period. In 2013, 47 percent of demand was domestic, 45 percent was commercial, 5 percent was industrial, and 2 percent was other. Demand from the commercial sector grew the fastest from 2004 to 2013, increasing at a rate of 2.2 percent per year. Demand from the domestic segment grew at 2 percent per year during the same period. 11.1.2 Key laws, regulations, and policies governing the sector The electricity sector in Saint Vincent is governed by the Electricity Supply Act, which establishes the sector’s structure and the tariff-setting mechanism. The ESA grants VINLEC the exclusive right to supply electricity until 2033. The sector’s development is also guided by the government energy sector policies, the Energy Policy and the Energy Action Plan. These policies outline the government’s objectives and plan for reducing the cost of electricity and increasing renewable generation, but have not been implemented. Policies in the energy sector The Energy Policy and the Energy Action Plan present the government’s vision of a more economical, more reliable, and less polluting energy sector. However, the government has not yet implemented the measures called for in the Energy Policy and Energy Action Plan. The Energy Policy includes the following guiding principles for the energy sector: • Providing clean, reliable, and affordable energy to consumers • Reducing fossil fuel use through expansion of renewable energy and energy-efficiency technology • Liberalizing the energy market and encouraging private sector participation in energy development and energy services • Setting electricity tariffs that reflect the full cost of service, while providing minimal subsidies for energy services to the lowest-income households169 166. Saint Vincent is the largest and most populated island in the country, which also includes a chain of smaller islands referred to as the Grenadines. The Grenadines is made up of 31 islands, eight of which are inhabited. 167. VINLEC, 2011 Annual Report. 168. Information provided by Financial Manager of VINLEC during field visit conducted in December 2014. 169 “Sustainable Energy for SVG: The Government’s National Energy Policy,” March 2009, accessed March 21, 2015, http://www.gov.vc/ images/stories/pdf_documents/svg%20nation%20energy%20policy_approved%20mar09.pdf. 82

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