Energy policy sees revised legislation, GEBE benchmarks, green energy plan

February 27, 2012 3:27 PM

PHILIPSBURG - The new energy policy of the government of St. Maarten identifies energy issues that are of great importance for the island and addresses the actions needed to move from policy to implementation, with the ultimate goal of ensuring a sustainable, affordable and environmental friendly energy situation for St. Maarten.

Commissioned by Minister of Energy Theo Heyliger, the policy calls for (but is not limited to) revised legislation in order to implement the policy, benchmarks for GEBE, a green energy plan, the feasibility of implementing natural gas, and establishing a regulatory authority for regulating the energy sector.

The policy also outlines a detailed timeline for implementation, culminating in the preparation of revised legislation. It is unclear, however, when the minister has targeted the start of the first activity. He did say recently he would prefer it sooner rather than later.

Heyliger had announced last year during a green energy conference at Westin that the policy was nearing completion and indicated just last week that it would be ready soon. In essence, the policy calls for a number of studies and technological investments from GEBE, funded primarily by the company. It also identifies a management structure at GEBE that will put the government of St. Maarten in charge as Shareholder, not the current Shareholding Foundation of GEBE.

In preparation for revised legislation in order to implement the energy policy, including improvement of the Ministry of Energy's governance and control of the electricity sector and including the establishment of the regulatory board, and implementing rules and regulations for a regulatory framework, government will also establish an Energy Committee for undertaking a number of tasks.

The policy was developed by the firm KEMA.

Policy items

The new energy policy outlines the following objectives:

1. Initiation of a Supply Side Energy Efficiency programme with which the fuel efficiency of GEBE's power station will be improved with 5 per cent after two years and with which the overall efficiency of GEBE and its power system– apart from fuel efficiency--will be improved with two per cent per year until an improvement of five percent has been reached within 2.5 years.

2. Preparation of a Green Energy Plan. An assessment of St. Maarten's Green Energy potential has already been started. The objective is to have 20 per cent of the electricity demand of St. Maarten to be generated with renewable energy sources by the year 2015. The Green Energy Plan includes the introduction of wind power, solar power and so-called waste to energy.

3. The Green Energy Plan will also provide in allowing households and commercial enterprises to produce electrical energy with renewable energy sources like solar power and wind power for their own consumption, while it will facilitate the delivery of the surplus of power produced to the GEBE grid, making use of net metering. For this purpose GEBE should develop a so-called "Interconnection Policy" including technical and commercial requirements for connecting the distributed renewable energy sources to the grid.

4. A program for introducing attractive incentives for solar water heating will be developed.

5. The St. Maarten government will implement an Energy Efficiency Programme for stimulating electricity consumers to reduce their energy consumption.

6. A study will be initiated to identify the feasibility of introducing LNG (Liquefied Natural Gas) as a major fuel for GEBE's production park. In case LNG turns out to be a feasible option, the fuel cost for power generation will become lower, while at the same time the emission of Greenhouse Gases and other pollutants (particularly SO2) will be reduced substantially. Once the feasibility of using LNG for power generation has been proven, it is envisaged that more than 50 per cent of all power can be produced with LNG.

7. Government will investigate whether joining current studies on interconnecting island power systems with submarine cables would bring benefits for the St. Maarten power situation. An example of a current study: a study on a cable connection from St. Kitts/Nevis to Puerto Rico via the US Virgin Islands with the purpose of exporting geothermal power from Nevis to Puerto Rico and/or the US Virgin Islands, or exporting power from Puerto Rico to smaller islands.

Another example: the Dutch government will start investigating the geothermal power potential in Saba. In case the study reveals the feasibility of geothermal power production in Saba, a cable connection to St. Maarten could be a feasible option for St. Maarten for importing geothermal energy from Saba.

8. Government will establish a regulatory authority for regulating the energy sector based on performance-based principles, which include price cap regulation and performance regulation. For power generation – particularly with renewable energy sources and with "waste to energy" – Independent Power Producers (IPP's) will be allowed to bid in competition, while power produced by the IPP's will be purchased and distributed to the customers by GEBE according to the Single Buyer Model, although regulated by the regulatory authority.

9. The study on the feasibility of LNG as mentioned under 6, will include a study on the usage of LNG for cooking gas and for using it as vehicle fuel.

10. At the same time the feasibility of introducing electric cars will be studied.

11. In case the studies reveal that using natural gas and/or electricity for the transportation sector is a feasible option, the government will issue incentives for stimulating the usage of gas-fired cars or electrical cars.

Implementation

The Energy Committee will undertake the following tasks:

1. Monitoring fulfilment by N.V. GEBE of the current requirements as set in the Electricity Ordinance and the concession, particularly regarding quality of supply and safety. Monitoring actions that are undertaken by GEBE to meet the timeline as set for accomplishing the requirements in the year 2014.

2. The committee will add measurable targets to the performance requirements in GEBE's concession on efficiency and productivity, while performance indicators should be compared with indicators of similar Caribbean islands' utilities by means of a Benchmark Study. GEBE could realize this by joining the Carilec Benchmark Study again. GEBE participated in this study for the last time in 2006.

3. The Energy Committee will report findings of the fulfilment by N.V. GEBE of the current requirements to the Minister of Energy.

4. Preparation of further amendments to the current ordinance and concession - next to adding measurable targets and performance requirements - in order to be compliant with the goals of the Energy Policy.

5. Review the Green Energy Assessment as currently being prepared by a consultant and identify feasible targets for initiating renewable energy projects.

6. Design of a Regulatory Framework while establishing the Single Buyer Model where GEBE as well as Independent Power Producers will produce electricity and where GEBE will be the sole and regulated distributor and supplier of electricity, according to Regulatory Rules and Standards regarding efficiency, reliability, quality of supply and safety.

7. Develop an Energy Efficiency programme for country St. Maarten, including energy efficiency issues in the transportation sector.

8. Development of an implementation plan for achieving the goals of the Energy Policy, including the renewable energy projects.

9. Prepare recommendations on adapting the current situation of governing GEBE to the new situation where only the government of St. Maarten is GEBE's shareholder, which implies that the Shareholders Foundation representing the governments of St. Maarten, St. Eustatius and Saba will become superfluous.

This means that N.V. GEBE should be supervised by a Supervisory Board, to be appointed by the Ministry of Energy, and that the Shareholder's role should resort directly under the St. Maarten government, represented by the Minister of Energy and supported by the Regulatory Board, which is fulfilling its Regulatory activities according to the legal framework and mandates as to be established in the new Ordinance or Electricity Act.

10. Preparation of a renewed Electricity Ordinance (or Electricity Act as a replacement of the Ordinance) covering the changes and newly developed arrangements as prepared by the Energy Committee, once approved by the government, including the addition of performance targets in the Electricity Concession and establishment of a Regulatory Board.

It is recommended that the Electricity Committee should consist of: a representative of the Ministry of Energy, a representative of the Ministry of Economic Affairs, a legal advisor, two experts who can cover regulatory as well as economic and technical issues. The intention is that the Energy Committee will report monthly to the Minister of Energy on progress of the activities, as well as on any hurdles or barriers experienced during the execution of activities.

(The Daily Herald)

27 February 2012