Grenada RRA

GRENADA
RENEWABLES READINESS ASSESSMENT
About IRENA
The International Renewable Energy Agency (IRENA) is an
intergovernmental organisation that supports countries in
their transition to a sustainable energy future, and serves as
the principal platform for international cooperation, a centre
of excellence, and a repository of policy, technology, resource
and nancial knowledge on renewable energy.
IRENA promotes the widespread adoption and sustainable
use of all forms of renewable energy, including bioenergy, geothermal, hydropower, ocean, solar and wind energy in the
pursuit of sustainable development, energy access, energy
security and low-carbon economic growth and prosperity.
www.irena.org
Authors
Gauri Singh (IRENA), Alejandro Tapia (IRENA) and
Mohamed Youba Sokona (IRENA)
Disclaimer
The designations employed and the presentation of materials herein
do not imply the expression of any opinion whatsoever on the part
of the International Renewable Energy Agency concerning the legal
status of any country, territory, city or area, or concerning their
authorities or the delimitation of their frontiers or boundaries.
Copyright (c) IRENA 2012
Unless otherwise indicated, material in this publication may be used
freely, shared or reprinted, so long as IRENA is acknowledged as
the source.
GRENADA
RENEWABLES
READINESS
ASSESSMENT
2012
Table of Contents
LIST OF ACRONYMS
LIST OF FIGURES
LIST OF TABLES
LIST OF IMAGES
ACKNOWLEDGEMENTS
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08
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FOREWORD
PREFACE
EXECUTIVE SUMMARY
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I. INTRODUCTION
Country prole
The Renewables Readiness Assessment
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II. ENERGY AND RENEWABLE ENERGY CONTEXT

Energy in the Caribbean Islands
Energy sector in Grenada
Renewable energy sources and potential
Key stakeholders
Energy policy and regulatory framework
Finance and investment
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46
III. MARKET DEVELOPMENT AND TRANSITION BY SECTOR

On-grid electricity from geothermal
On-grid electricity from wind and solar
Off-grid/stand-alone applications
Thermal heating and cooling
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IV. RECOMMENDED ACTIONS
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V. BEST PRACTICES AND FUTURE COOPERATION

Good practice case studies
Good practice Case Study 1: The rst phase interconnection policy
Good Practice Case Study 2: A wind farm project in Carriacou
Next Steps
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R E N E WA B L E S R E A D I N E S S A S S E S S M E N T
VI. REFERENCES AND BIBLIOGRAPHY
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VII. ANNEXES
ANNEX A: DETAILED LIST OF RECOMMENDED ACTIONS
Action 1: Finalise the review of current interconnection policy
Action 2: Create and start up an independent electricity regulator
Action 3: Finalise the concessionary agreement
Action 4: Conduct appropriate environmental
and social impact assessments (including road access
to the chosen site)
Action 5: Allocate land for RE development in zones benetting
from high renewable resources such as wind
Action 6: Develop GDBS capacity to provide standards
development and quality for RE equipment and technologies
Action 7: Develop the capacity of TAMCC to provide
curriculum development and training for technicians in RE technologies
Action 8: Develop the capacity - equipment and human - within the
meteorological office and the Ministry of Agriculture to carry out
a comprehensive RE resource assessment that can be used to
develop solar and wind maps for Grenada
Action 9: Source concessionary credit lines for the GDB to make available
soft loans for investments in RE technologies. Develop lending agency
capacities to assess risks associated with these loans by supporting
their collaboration with the GDB
Action 10: Develop a business model to design and install
stand-alone RE systems, especially in the household sector
and in rural areas, test and rene the model by developing and
driving through a pilot project
Action 11: Encourage the uptake of solar water heaters
for domestic and commercial water heating
Action 12: Review the technologies past and present for farm pumps
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ANNEX B: A NEW DEVELOPMENTAL FRAMEWORK

FOR GRENADAS ELECTRICITY SECTOR BY THE
GOVERNMENT OF GRENADA
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GRENADA
List of Acronyms
CARICOM
CARILEC
COTED
ECCB
ECERA
CDM
CREDP
ECH
ESA
FIT
GARFIN
GDBS
GDB
GEF
GHTA
GIDC
GOG
GRENLEC
GRENSOL
GDP
GIZ
GPP
GW
HV
IPP
IRENA
kWh
kWh/m2
kW
Caribbean Community and Common Market

Caribbean Electric Utility Service Corporation
Council for Trade and Economic Development
Eastern Caribbean Central Bank
Eastern Caribbean Energy Regulatory Authority
Clean Development Mechanism
Caribbean Renewable Energy Development Programme
Eastern Caribbean Holdings
Electricity Supply Act
Feed-In-Tariff
Grenada Authority for the Regulation of Financial Institutions
Grenada Bureau of Standards
Grenada Development Bank
Global Environment Facility
Grenada Hotel and Tourism Association
Grenada Industrial Development Corporation
Government of Grenada
Grenada Electricity Services
Grenada Solar Power
Gross Domestic Product
German Agency for International Cooperation
Grenada Private Power
Gigawatt
High Voltage
Independent Power Producer
International Renewable Energy Agency
Kilowatt-hour
Kilowatt-hour square metre
Kilowatt
kWp
LPG
LPH
LUCELEC
LV
m/s
MIPP
MTOE
MW
MWe
NGO
NEP
NSAP
OECS
OAS
PJ
PUC
PSCCU
RE
RESPV
RRA
TAMCC
TPES
VAT
SIDS
UNDESA
UNDP
UNFCCC
UNIDO
Kilowatt peak
Liquid Petroleum Gas
Light and Power Holdings
St. Lucia Electricity Services
Low Voltage
Metre per second
Micro-Independent Power Producer
Million Tonnes of Oil Equivalent
Megawatt
Megawatt electric
Non-Governmental Organization
National Energy Policy
Non State Actors Panel
Organization of Eastern Caribbean States
Organization of American States
Petajoule
Public Utilities Commission
Public Service Cooperative Credit Union
Renewable Energy
Renewable Energy Special Purpose Vehicle
Renewables Readiness Assessment
T. A. Marryshow Community College
Total Primary Energy Supply
Value-Added Tax
Small Island Developing States
United Nations Department for Social and Economic Affairs
United Nations Development Programme
United Nations Framework Convention on Climate Change
United Nations International Development Organization
GRENADA
LIST OF FIGURES
Figure 1.1
Figure 1.2
Figure 1.3
Figure 2.1
Figure 2.2
Figure 2.3
Figure 2.4
Figure 2.5
Figure 2.6
Figure 2.7
Figure 2.8
Figure 2.9
Figure 2.10
GDP growth rates in 2003-2011

GDP contribution by main economic sector
Fossil fuel import trends
Growth rates in net peak demand and
generation for a few Caribbean SIDS
Distribution of energy use by key services
Number of electricity customers in 2011
Average electricity price per month
for a domestic customer consuming
100 kWh per month
Fuel and non-fuel rates 1996-2011
Outline of Grenada transmission system
Wind rose for Grenada
Preliminary wind assessment for Grenada,
Carriacou and Petite Martinique
Preliminary solar map for Grenada
Grenada's renewable energy roadmap
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LIST OF TABLES
Table 2.1
Table 2.2
Table 2.3
Characteristics of energy markets in a few Caribbean SIDS

Key electricity market indicators
Key Stakeholders in the Grenada energy market
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LIST OF IMAGES
Image 1
Image 2
Image 3
Image 4
Image 5
GRENLEC micro wind turbine at Fort Frederick, Grenada

Erecting wind test equipment in Carriacou
Wind test tower in Carriacou
Wind test tower erected in Grenada
Stand-alone system, 1.8 kWp
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Acknowledgements
This Renewables Readiness Assessment report was prepared by the
International Renewable Energy Agency (IRENA) in close collaboration with
the Government of Grenada. A national consultant, John Telesford, contributed
signicantly, facilitating the groundwork and assisting in subsequent report
preparation.
In addition, IRENA wishes to thank the following experts, in alphabetical order,
for their insights and constructive guidance during the peer review process:
Dr. Hugh Sealy (Energy Advisor, Ministry of Finance, Planning, Economy,
Energy and Cooperatives), Dr. Raymond Nurse (Senior Energy Specialist,
Ministry of Finance, Planning, Economy, Energy and Cooperatives) and Terence
R. Craig (Representative/Coordinator of the Caribbean Sustainable Energy
Program in Grenada, Organization of American States).
Karmic Design provided the design and layout.
Comments or questions about this Renewables Readiness Assessment report

can be sent to matapia@irena.org or to secretariat@irena.org.
GRENADA
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Foreword
In these trying economic times characterised by slow economic growth, declining foreign
direct investment, stagnant remittances and high dependency on imported fossil fuel,
electricity at affordable prices is not accessible. These and other factors severely restrict and
dampen the economic growth of Small Island Developing States (SIDS) in the Caribbean
and elsewhere. Grenada is no exception in these demanding times, as the global economic
downturn continues to bite and the battle rages for sustainable energy.
The government of Grenada is seeking ways to stimulate economic stability and growth in
order to limit its dependency on high and volatile oil prices, which have negative side effects
on the country's economy. It is trying to avert the foreign exchange drain, typical of SIDS,
caused by the import of petroleum products for transport and electricity. Since 2012 the
government of Grenada has identied ve key transformation sectors which will stimulate
and enhance revenues and economic growth and create jobs in Grenada. A focus on the
following pillars is expected to generate growth in the Grenadian economy:
w
w
w
w
w
Tourism and hospitality services

Health, wellbeing and education services
Agribusiness
Information and communication technology
Energy development (renewable and non-renewable)
When the government of Grenada rst heard the brilliant news that the International
Renewable Energy Agency (IRENA) had selected Grenada as the rst country in the
Caribbean and Latin America (and most strikingly the rst SIDS in the world) to conduct a
Renewables Readiness Assessment (RRA), it readily accepted this challenge and
opportunity. This was a positive appeal and gesture by IRENA, and demonstrated great trust
in Grenada to manage such an intensive study on the renewable energy potential of the
Spice Island. It could not have occurred at a better moment in the Government of Grenada's
Energy Development Strategy.
GRENADA
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The Grenada National Energy Policy was conceived, developed and approved by the Cabinet
of Ministers in March 2011 and formally made public in November 2011. The policy document
contains a ten-year Sustainable Energy Action Plan (January 2010 December 2019) with
measurable indicators or milestones of progress.
This RRA study has come at exactly the right time. It has therefore made a fundamental
contribution to and is an essential part of the formulation of the GREENADA vision 2030.
The Prime Minister launched GREENADA VISION 2030 at the Rio+20 conference in Brazil in
June 2012 and again at the World Energy Forum in Dubai in October 2012. We visualise an
economy with 100% renewable energy utilising base load geothermal and waste-to-energy,
complemented by intermittent wind and solar in the energy mix by 2030.
The RRA activities and workshops brought the citizens of Grenada to the roundtable. They
critically discussed and analysed Grenada's energy position in particular renewable energy
conditions, barriers and challenges and the ownership of the islands' potential resources.
The Government of Grenada embraces the RRA ndings. We have been and will use this
report wherever possible in our attempt to win partners who can collaborate with us in
possible investments and joint ventures. We will demonstrate the comparative advantages
of using renewable energy technologies in Grenada. These equitable business relationships
will strengthen our aspirations to realise the 2020 Low Carbon Development Strategy and
the GREENADA Vision 2030.
The new development framework for Grenada's electricity sector clearly demonstrates the
direction and action the Government of Grenada is now taking. The RRA exercise in Grenada
was a timely catalyst.
A hearty thank you to IRENA and to all the individuals, organisations and other stakeholders
in Grenada, consultants conducting the study, international partners and above all IRENA
staff directly connected to the process of producing Grenada's RRA.
The Honourable V. (Nazim) Burke
Minister of Finance, Planning,
Economy, Energy and Cooperatives,
Government of Grenada
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Preface
The Renewables Readiness Assessment (RRA) conducted in Grenada in 2012 marks an
important step forward in IRENAs work to promote the widespread adoption and sustainable use of all forms of renewable energy worldwide. This report, the culmination of a
country-led process based on IRENA methodology, is the rst in the Caribbean an island
region with the potential to gain energy self-sufficiency through localised renewable
energy solutions.
The RRA is a central pillar of the work of IRENA. It is a country-driven process, with
IRENA helping to engage with all relevant stakeholders in a national or regional dialogue
in order to pinpoint renewable energy drivers, comparative advantages and enabling policies and measures. The aim is to set out a concrete action plan to enable the development
and scale-up of renewable energy. The rst two pilot RRAs were conducted in Senegal
and Mozambique in late 2011, with other African countries and regional groupings following
suit. Meanwhile, countries as diverse as Grenada, Kiribati and Peru have also completed
RRAs, expanding the range of reports available for comparison.
All these studies will help IRENA provide country-specic support and continued advice
to the participating countries. More broadly, the RRA series spreads the knowledge of
good practices essential for a successful global energy transition.
Grenada currently relies on costly oil imports subject to price and supply volatility for its
energy needs, including the generation of electricity. As a result, consumers pay very
high bills compared to other parts of Latin America and the rest of the world. The transition
to renewables would support price reductions, improve the competitiveness of key sectors
of the economy, particularly the tourism industry, create new jobs and help to stimulate
the economy.
I hope that this RRA will enable Grenada to signicantly increase its deployment of renewables, as called for in the Grenada National Energy Policy. IRENA is ready to provide
continuing support to Grenada in implementing the actions identied.
Adnan Z. Amin
Director General, IRENA
GRENADA
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Executive Summary
The State of Grenada consists of three islands Grenada, Carriacou and

Petite Martinique, which form the southern end of the Windward Islands
in the Caribbean. The islands, which cover an area of 344 square kilometres, have a population of 103,000 that is growing at about 0.54%
per annum. After hurricane Ivan in 2004, there was a spurt in the growth
rate, which has since levelled out. The government of Grenada is projecting growth of 4.67% in 2012 and 4.98% in 2013, but due to the
current economic recession these growth rates may not be realised.
Over the past two decades, the economy has made a structural transition. Previously, it was dominated by primary industries, but the tertiary
sector has started to play a key contribution to economic growth. The
tourism sector is the highest foreign exchange earner in the economy.
Remittances contribute signicantly to the economy and amounted to
about 3.5% of Gross Domestic Product (GDP) in 2011. But since it is a
small economy, any change in trade, tourism and foreign direct investment (FDI) ows makes a major impact. This is further aggravated by
limited scal room for manoeuvre, posing signicant constraints on
government ability to address development needs.
The energy sector in Grenada is characterised by a high dependence on
fossil fuels which is typical of the region. The electricity sector accounts
for 40%, and the transport sector for approximately half the primary
energy use in Grenada. Grid access is over 99%. The utility has an installed capacity of about 50 MW and peak demand is around 30 MW.
Fossil fuel imports have grown steadily despite the economic slowdown.
This could have an impact on the economic development and growth
prospects of Grenada. The growth in demand for electricity is projected
to double by 2028. To initiate the transition to a low carbon economy,
fuelled mostly by renewables, the government of Grenada announced a
new National Energy Policy (NEP) in 2011 and the GREENADA vision
2030 in 2012.
GRENADA
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Grenadas commitment to the mission of the International Renewable Energy Agency

(IRENA) is reected in its willingness to participate in the Renewables Readiness
Assessment (RRA). The RRA is a framework that enables countries to better
understand the opportunities and constraints for the deployment of renewable
energy technologies. It is a country-driven collaborative process, which provides a
rapid and objective assessment of the status of renewable energy opportunities.
Geothermal resources in Grenada have the

potential to generate electricity that can
full base load requirements. Coupled with
wind, solar and waste-to-energy potential,
this means the GREENADA vision can become a reality provided the enabling framework for attracting investments is put in
place. Grenadas commitment to the mission of the International Renewable Energy
Agency (IRENA) is reected in its willingness to participate in the Renewables
Readiness Assessment (RRA). The RRA is
a framework that enables countries to better understand the opportunities and constraints for the deployment of renewable
energy technologies. It is a country-driven
collaborative process, which provides a
rapid and objective assessment of the status of renewable energy opportunities. In
addition, it identies gaps and shapes the
pathways necessary to achieve the aspirations and vision for renewable energy in a
particular country. In facilitating this
process, IRENA effectively leverages its
comparative advantage as a unique intergovernmental agency dedicated to the promotion of renewable energy. It does so by
offering countries access to a global network with the capacity to follow up on action and share best practice.
The government of Grenada has embarked
upon many efforts to enhance the deployment of renewable energy technologies.
One signicant action is the participation
in the regional initiative to establish the
Eastern Caribbean Energy Regulatory
16
Authority (ECERA). This initiative by the

(OECS) will assist Grenada in the regulatory
supervision of the electricity market and
further support the deployment of
renewable energy technologies.
The government of Grenada is now considering an amendment to the Electricity
Supply Act 1994 (ESA) to introduce a new
interconnection policy for attracting investments from Independent Power Producers
(IPPs) to set up renewable energy projects.
This is in line with the action plan to achieve
the 2030 GREENADA vision. To facilitate
utility scale renewable energy generation,
a special purpose vehicle (RESPV) is proposed which will mobilise nance for
geothermal, wind and waste-to-energy
projects. Financing of renewable energy
projects often requires a mix of nancial
instruments that can reduce cost of nance
and mitigate risk and the RRA, further recommended that strategies for renewable
energy nance should be in alignment with
the capacity building efforts aimed towards
nancial institutions.
KEY RECOMMENDATIONS
As a result of the Renewables Readiness

Assessment in Grenada, the government
of Grenada identied the following key recommendations to foster the deployment
and sustainable use of renewable energy
resources in the country:
Set up an independent regulator for

the electricity market.
Finalise the concessionary agreement

for geothermal, and conduct appropriate environmental and social impact
assessments.
Finalise the review of the present

interconnection policy to promote
business models that can increase the
deployment of renewables.
Enhance human capacity to enable

nancial and technology risk assessment; improve technical capacity to
construct, operate and maintain
renewable energy systems.
Source concessionary loans and grants

to support the deployment of
large-scale
renewable
energy
technologies and to establish
mechanisms to reduce the cost of
nance for renewable energy investors.
GRENADA
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The boundaries
and names
shown on this
map do not
imply official
acceptance or
endorsement
by IRENA.
Grenada
Geographical area
344 km2
Population
103,000
GDP per capita
USD 7,220
Average electricity tariffs in Grenada in 2012
USD 0.40 per kilowatt hour

Sources: Government of Grenada 2012
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I. Introduction
Small Island Developing States (SIDS) are unique because of their size
and geographical isolation. Small islands are vulnerable to the high cost
of imported fossil fuels perhaps more so than any other type of
country.
With most challenges come opportunities. Small islands also have the
greatest potential to rapidly decarbonise their economies at relatively
lower cost than any other country. Grenada is a typical small island developing state.
COUNTRY PROFILE
The three islands of Grenada, Carriacou and Petite Martinique together

make up the small island state of Grenada nestling between the
Caribbean Sea and the Atlantic Ocean. Grenadas population was estimated at 103,000 in 2012, and population growth is projected to be
about 0.54% (Government of Grenada, 2012). The population density
of Grenada is 299 inhabitants per square kilometre.
Grenada experienced robust economic growth in the aftermath of hurricane Ivan, which totally devastated the country in 2004. However,
economic growth began to decline in 2006. The lowest growth was
recorded in 2009 due to the global economic recession. Minimal growth
occurred in the preceding period, as shown in gure 1.1. The Government
of Grenada is projecting a growth of 4.67% and 4.98% in 2012 and 2013
respectively (Government of Grenada, 2012). However, due to the current
economic recession these growth rates may not be realised.
The economic growth and development of Grenada used to depend
mainly on the primary industry of agriculture. However, the economic
development drive has shifted to the tertiary sector, driven mainly by
services. Figure 1.2 reveals that in 2011 the key sectors driving economic
growth and development are services, industry and agriculture. In 2011,
the Eastern Caribbean Central Bank (ECCB) reported that the drivers of
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GDP growth %
Figure 1.1: GDP growth rates 2003-2011
Source: Government of Grenada, 2012
the service sector are education (23.4%),

transport and communications (17.6%), real
estate (17.6%), nancial services (10.3%)
and hotels and restaurants (5.1%).
In the national accounts of Grenada, the
term hotels and restaurants is used as a
proxy for the tourism sector. This representative sector accounts for a small portion
of GDP, but it usually has a multiplier effect
on other sectors such as transport, communications, real estate and nancial services. In 2011, the Grenada Hotel and Tourism
Association (GHTA) estimated that the average contribution of tourism to GDP of all
islands in the Organization of Eastern
Caribbean States (OECS) was about 43.2%
(GHTA, 2012). In Grenada, its direct contribution to GDP has been estimated at 7.3%,
but given the multiplier effect, this contribution is estimated at 24.2% for 2011 (GHTA,
2012). Similarly, tourism is estimated to
have accounted for about 6.8% of direct
employment; its impact on national employment is estimated at 22.4% for the
20
Figure 1.2: GDP contribution

by main economic sector
Source: ECCB, 2011
Figure 1.3: Total fossil fuel imports (MTOE*)
*Million Tonnes of Oil Equivalent

Source: NEP, 2011
same period if the multiplier effect is taken

into account (GHTA, 2012).
The Grenadian economy has a relatively
high dependence on remittances. These
have not grown signicantly in the last ve
years and amounted to approximately USD
28.9 million in 2011, equivalent to 3.5% of
GDP (Central Statistical Office, 2011). Foreign direct investment (FDI) has been declining in recent years as a result of the
global economic crisis. In 2009, FDI accounted for USD 79 million, representing
about ten percent of GDP (CSO, 2011).
Despite the increases in international oil
prices and the slow economic growth, the
quantity of oil imports has continued to
grow (gure 1.3), putting pressure on the
countrys scal accounts. Oil imports bill in
Grenada amounted in 2010 to USD 69.1 million representing 21.7 of total imports in
the island (ECCB, 2012).
This dependence on oil imports is increasingly affecting the tourism sector and in
particular the hospitality subsector. The
price of electricity in the hospitality sector
has increased by about 26% between 2009
and 2011 and has had an adverse effect on
the competiveness of this key sector for
Grenada, leading to the closure of a few
hotels (GHTA, 2012).
Slow economic growth, declining FDI and
stagnant remittances, coupled with the
countrys high dependence on imported
fossil fuels, have signicantly hampered the
countrys growth. Thus the government of
Grenada has started to look at alternatives
to promote economic growth and limit its
dependency on high and volatile oil prices.
One of these strategies is the use of existing
and potential renewable energy resources.
A transition to renewable energy in
Grenada will stem the massive outow of
GRENADA
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foreign exchange, and will provide a more

reliable and secure supply of electricity. In
addition, the move to renewables could
have an impact on electricity tariffs, freeing
up income for households and businesses
which can be directed towards other expenditure and investments. Recognising
the negative impact of high fossil fuel import dependency on Grenadas economy,
the government took action. In 2011, it developed and adopted a National Energy
Policy (NEP) focused on the transition to a
low carbon economy.
RENEWABLES READINESS
ASSESSMENT
A Renewables Readiness Assessment

(RRA) is a comprehensive evaluation of the
conditions for renewable energy deployment in a particular country. It also evaluates the actions that need to be taken to
further improve these conditions and overcome existing barriers. The RRA includes
all renewable energy services on-grid and
off-grid electricity and biofuels for transportation and other applications such as
heating and cooling. The application of this
approach to individual countries will provide a comprehensive analysis of the presence or otherwise of the enabling conditions for the development of renewables.
The RRA methodology means completing
a set of templates designed to capture the
key issues relating to present policy, regulations, nance, construction, operations
and maintenance. The present business
model or lack of it has a major bearing on
the assessment.
The RRA is country-led, and the report
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emerging from the assessment is therefore

owned by the particular country being assessed. This sets the RRA apart from other
assessment processes led by international
organizations. IRENA offers its support during the RRA, but it is the actions and insights developed through a country-owned
process that provide the key to rapid deployment.
RRAs also facilitate a co-ordinated approach and priority setting. This can inform
future bilateral and multilateral discussions
with international and regional agencies,
nancial institutions and the private sector
concerning the implementation of initiatives emerging from the RRA. With the support of IRENA, individual countries have
access to a global network, giving them
the capacity to follow up on actions and to
exchange experiences.
The Grenada pilot was the third RRA in the
world and the rst in the Caribbean. The
process started with a literature review of
research in the energy sector. Then the RRA
director and the programme manager at
the Ministry of Energy identied key stakeholders, selected service - resource pairs
(e.g. electricity/solar) of relevance to
Grenada and matched them to groups of
stakeholders. The stakeholders were selected from key government ministries, the
private sector, NGOs and academia. A comprehensive outline of these stakeholders
was provided in section 2.4.
The Grenada RRA workshop and assessment was held from 23rd to 25th of July
2012. In this three-day workshop, stakeholders were brought together to discuss
the current status of the energy sector in
Grenadas Energy Prole

TPES: approximately
4.2 PJ
of which
renewable is
0.3 PJ
Energy self-sufficiency
relation to renewable energy in particular. During the last day a discussion

with NSAP took place. NSAP is a group
of stakeholders such as communitybased organizations; NGOs; the GHTA;
farming organizations and womens organizations. The meeting sparked very
lively discussions and assisted to some
extent with the validation of the actions
listed at the two-day workshop.
6.7%
Oil import bill in 2010
USD 69.1 million

Electricity generation
204 GWh
Electricity use per capita
1,777 kWh
Electrical capacity (2011)
52.4 MW
of which renewable is
0.3 MW
The RRA methodology has proved to

be a signicant tool that Caribbean island nat-ions should use to assess requirements for the deployment of renewable energy. The RRA in Grenada
has yielded a number of successful outcomes. It provided a clear understanding of the renewable energy environment and allowed a range of
stakeholders to get involved and become sensitised and take ownership of
RE issues and concerns. It also generated a range of practical measures that
need to be taken - not least the validation of a practical and simple process
and methodology.
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II.Energy and Renewable

Energy Context
ENERGY IN THE CARIBBEAN ISLANDS
Caribbean Islands are characterised by a high dependence on volatile

fossil fuel costs to meet their energy demand. In 2010 it was estimated
that about 90% of energy for transportation and electricity generation
in the Carribean islands came from oil imports (UNDESA, 2010). This
places a large drain on the foreign exchange earnings of SIDS, including
those in the Caribbean. This situation exposes most island states to the
vulnerabilities associated with the international oil market. As a consequence, the growth potential of these states is severely affected. This is
because nancial resources that could be made available for other development investments leak out of these regions.
Despite rising oil prices, energy demand in the Caribbean islands continues to grow. A study commissioned by the Caribbean Community
and Common Market (CARICOM) shows energy demand in the region
will almost double by 2028, so that there is a need to double generation
capacity to meet demand. At the moment, most islands states generating capacity meets their demand (gure 2.1). Hence, doubling their
generation capacity using imported fossil fuels would have a very adverse impact on their economy and environment. This means renewable
energy could play a critical role in meeting the future energy demand
of these island communities in a clean and sustainable way. Renewables
will help reduce their dependence on expensive imported fossil fuels,
thereby reducing oil import bills and increasing energy security through
the use of indigenous energy sources.
Table 2.1 shows the characteristics of energy markets in several Caribbean
SIDS. Electricity access is over 90% in most Caribbean islands, with Antigua and Barbuda and Barbados achieving full coverage. However, most
of the electricity generation in the region is fossil-fuel based. Fossil
fuels account for more than 70% of the electricity mix (in some cases
over 90%).
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Another peculiarity of Caribbean electricity

markets is their reliance on small, mediumspeed diesel generators of about 2.5-10
megawatts. The cost associated with the
operation and maintenance of these systems is relatively high. Utilities are allowed
to pass on the full fuel costs to end users,
resulting in relatively high electricity tariffs.
Figure 2.1: Growth rates in net

peak demand and generation
for a few Caribbean SIDS
According to a 2010 tariff survey by the

Caribbean Electric Utility Services Corporation (CARILEC), the average rate for electricity in Caribbean countries was approximately USD 0.32 per kilowatt hour (except
for the Dominican Republic and St Kitts. In
most islands, the electricity sector is managed by vertically integrated utilities (public
and private). These have an exclusive
licence to generate, transmit, distribute and
sell electricity for a long periods (generally
50-99 years). This has limited the entry of
new players, such as IPPs, into the electricity markets.
In order to address these challenges,
CARICOM launched its energy programme
in 2008 to harmonise Caribbean energy
policy development and strategies. The
main aim of the CARICOM energy programme is to increase regional energy security by diversifying the energy mix and
through regional cooperation and integration. An interconnection feasibility study
funded by the World Bank is one key project coming out of the CARICOM
progamme. This project seeks to determine
the feasibility of connecting the grids of St.
Lucia, St. Vincent and the Grenadines,
Grenada and Barbados. This would enhance
the economies of scale and make renewable energy deployment in the Carribbean
more cost-effective1.
Source: ECCB, 2011
Delegates at the 44th meeting of the

(OECS) authority agreed that the challenges associated with the electricity market should be addressed regionally in two
ways. Firstly, a regional regulatory framework should be set up the Eastern
Caribbean Energy Regulator (ECERA).
Secondly, electricity generation should be
1 In addition, an Eastern Caribbean natural gas pipeline project is under consideration and there is potential to
use specialised shipping vessels for natural gas. However, in Grenada the policy is to consider natural gas as a
transition fuel towards the ultimate deployment of renewable energy technologies.
26
Table 2.1: Characteristics of energy markets in a few Caribbean SIDS
Country
Antigua and Barbuda
Barbados
Dominica
Dominican Republic
Grenada
St. Lucia
St. Vincent and the Grenadines
St. Kitts and Nevis
TPES
(PJ)
6.9
21.3
2.0
338.8
4.2
5.6
2.7
4.2
Electricity
use per
capita
(kWh)
1,264
3,481
1,229
1,358
1,777
2,040
634
2,095
Fossil fuel
Electricity dependency
access
in 2009
100%
100%
90%
95.9%
99.5%
98.0%
91%
95%
100%
89%
92%
72%
93%
98%
94%
88%
Source: International Renewable Energy Agency (IRENA), 2012
diversied by increasing the use of renewables. As a result, the OECS authority approved ECERA at its 49th meeting, and it
was endorsed by the Council for Trade and
Economic Development (COTED) of the
CARICOM. Another organisation, the
Caribbean Electricity Utility Service Corporation (CARILEC) supports and informs the
design of the regulatory agency.
The key objectives of ECERA are as follows:
w
Maximise economies of scale in regulating the electricity sector in the OECS;
Utilise more efficiently and effectively

the scarce human resources available
within the OECS islands;
Provide necessary regulatory tools;
Increase the capacity of OECS members to implement regional-scale

arrangements for electricity trade.
The main focus of ECERA will be to regulate tariffs, review investment plans and de-
ne a regional licensing framework for electricity market participants, facilitating renewable energy integration into the electricity mix.
ENERGY SECTOR IN GRENADA
Grenadas energy sector is typical of the

Caribbean and depends almost entirely on
fossil fuel products. The Total Primary
Energy Supply (TPES) of Grenada consists
of the following fossil fuel products: diesel,
kerosene, liquid petroleum gas (LPG) and
gasoline. The TPES in 2009 was 4.2 petajoules of energy. In 2000-2009 TPES grew
by about 40%, most of which is accounted
for by fossil fuels. Oil imports accounted
for 93% of Grenadas TPES in 2009. Solid
biofuels, which included mainly charcoal
for cooking and solar, accounted for the
remainder.
There are three sectors which use primary
energy: transport, electricity and domestic
(gure 2.2). Together transport and electricity consume approximately 90% of the
energy supplied by fossil fuels. The trans-
GRENADA
27
Figure 2.2: Distribution of

energy use by key services
Figure 2.3: Number of

electricity customers in 2011
Industrial 37
Commercial
5,818
Domestic
38,394
Source:NEP, 2011
port sector consisted of around 26,387 registered vehicles in 2009 (government of

Grenada, 2011). It has seen an average annual increase of 1200 vehicles in the number of vehicles registered over the past 10
years.
Average prices for the main fuels used by
this sector are USD 1.20 per litre of diesel
and USD 1.24 per litre of gasoline. There is
no signicant work undertaken for alternative fuels for the transport sector. However,
the government has stated in the NEP its
intention to introduce electric vehicles into
the Grenadian market. It wants the transport sector to make a transition to the electricity grid, which will be supplied by renewable energy such as geothermal. The
transition of the transportation sector to
renewable energy is critical to the govern-
28
Source: GRENLEC, 2011
ments realization of its renewable energy

vision.
The transformation of the transport sector
means opting either for electric cars or biofuels. The government of Grenada intends
to introduce a pilot electric vehicle programme in collaboration with Grenada
Electricity Services (GRENLEC). This will
target agencies with large vehicle eets.
This pilot project will analyze the feasibility
of operating electric vehicles in Grenada.
Households are the main consumers of LPG
and kerosene, although some LPG is consumed by restaurants. LPG is used in the
domestic sector for cooking. In 2012 the
average price for LPG was USD 16.67 for a
20 pound cylinder.
Table 2.2: Key electricity market indicators

Key market indicators
Peak demand (MW)
2011
30.29
2010
30.83
2009
~29.5
2008
~28.9
2007
~27.1
Net generation (GWh)

Sales including
street lighting (GWh)
Number of customers
at year end
Av. consumption
domestic (kWh)
Av. consumption
commercial (kWh)
Av. consumption
industrial (kWh)
196.82
180.88
201.40
184.78
195.39
177.33
189.82
172.50
178.67
165.23
44,249
42,699
42,928
41,222
39,318
1,835
1,901
1,833
1,847
1,921
17,155
17,795
17,576
18,124
17,706
163,906
169,345
157,434
156,352
185,143
ELECTRICITY SECTOR
The electricity market is dominated by

GRENLEC, a vertically integrated company.
A private company, WRB (through its subsidiaries Grenada Private Power and Eastern Caribbean Holdings - ECH) owns a
61.4% share in GRENLEC. In late 2012, WRB
announced it was selling its shares in
GRENLEC. The imminent sale presented the
government with the opportunity to craft
a new developmental framework for the
electricity sector. The details of this new
framework are presented in section 2.4.
According to the NEP, the company operates a total installed capacity of 52.4
megawatts. This consists of 45.9 megawatts at the main generating plant at St.
Georges and 2.8 megawatts at St. Georges
University in Grenada. The rest is installed
in Carriacou and Petite Martinique, which
according to the NEP have capacities of
3.2 and 0.5 megawatts respectively. This
installed capacity has remained constant
since 2007. In 2007-2011, this capacity met

a growing demand for electricity, increasing
from 27.1 to 30.2 megawatts. At the same
time, generation increased from 165 to 180
gigawatt hours with a maximum generation
of 201.4 gigawatt hours in 2010 (table 2.2).
The three main electricity consumers in the
country are in the residential, commercial
and industrial sectors (gure 2.3). In 2011,
the majority of the customers were households, accounting for 86.8% of total customers, while the commercial and industrial
sectors accounted for 13.1% and 0.1% respectively. However, the average industrial
customer consumed 163,906 kilowatt hours
compared to 17,155 kilowatt hours in the
commercial sector and 1,835 kilowatt hours
for the domestic sector in 2011. The average
consumption of each of these customers
for the period is shown in table 2.2.
The average consumption of electricity in
the commercial sector is very stable but
declined in 2011 mainly as a result of high
GRENADA
29
USD per month
Figure 2.4: Average electricity price/month for a

domestic customer consuming 100 kWh/month
Source: GRENLEC, 2011 [1 USD = 2.7 XCD]
electricity prices and the efforts to reduce

electricity consumption in the sector.
In 2012, electricity tariffs in Grenada were
on average USD 0.40 per kilowatt hour,
substantially higher than in Europe or North
America. It is important to note that air
conditioning consumes approximately 5060% of electricity in buildings in Grenada
(Telesford, 2004). The tariff structure consists of a fuel charge, a non-fuel charge,
Value Added Tax (VAT) and an environmental levy paid only by the residential
sector (gure 2.4).
At the moment, GRENLEC makes a monthly
recalculation of the fuel charge based on
the average of the cost of diesel fuel used
to generate electricity in the previous quarter. The non-fuel charge is capped and
based on the cost of living. These adjustments simply appear on the customers bill
at the end of each billing cycle and after
every quarter. The environmental levy is
30
used for the management of municipal

solid waste. This amounts to USD 1.85 for
consumption of 99-149 kilowatt hours and
USD 3.7 for consumption over 150 kilowatt
hours and above. The VAT for this category
of customers is 15% of the non-fuel charge
for consumption above 99 kilowatt hours.
Industrial and commercial customers pay
VAT on all units consumed.
Generally, the volatility of the price for fuel
in the international market has a profound
impact on the price for electricity on the
local market. From 1996-2011 the fuel rate
systematically increased, leading to simultaneous increases in the local electricity
price. Meanwhile the non-fuel rate remained fairly stable (gure 2.5).
Despite these high prices and their adverse
impacts on the Grenada economy, it is important to highlight that the electricity supply has been extremely reliable since
GRENLEC was privatised in 1994. One of
USD per month
Figure 2.5: Fuel and non-fuel rates 1996-2011
Source: GRENLEC, 2011
the key reasons for privatization was the

development of a rural electrication programme and grid extension. This means
99.5% of the island now has electricity access. Electricity is generated from one central plant in St. Georges, the capital of
Grenada. It is distributed throughout the
island via a 600 mile high voltage (HV)
transmission system and 800 miles of low
voltage (LV) distribution lines (gure 2.6).
Each of the coloured lines indicates a main
feeder from the main generating station
located on the south-western side of the
island. Figure 2.6 conrms the very high
penetration of the grid. It runs along the
entire coastline of the island and through a
main feeder penetrating the Grand Etang
hills through the centre of the island from
the south-west to the north-east. The grids
penetration through the Grand Etang hills
is very important since there is a plan to
develop a geothermal plant in the neigh-
bouring area of Mount St. Catherine. The

prospects for this potential project may
have improved now that GRENLEC has the
experience of developing the grid in this
area.
RENEWABLE ENERGY
SOURCES AND POTENTIAL
Grenada has the potential for renewable

energy from geothermal, solar and wind.
However, only small rooftop-mounted solar
PV systems have made any penetration into
the market. They now represent around one
percent (300 kilowatts) of peak demand.
In recent years there has been substantial
debate on how to move forward with the
development of these resources.
GEOTHERMAL
A preliminary estimate of the geothermal

potential in Grenada, Carriacou and Petite
GRENADA
31
32
Figure 2.6: Outline of Grenada transmission system

The boundaries and names shown
on this map do not imply
acceptance or endorsement by
IRENA.
33
Figure 2.7: Wind rose for Grenada
Source: Weisser, 2004
Martinique came to around 1,100 MWe

(UNDESA, 2012). This includes the underwater volcanic region of Kick-Em-Jenny.
The resources are concentrated in the main
island of Grenada and more specically in
the Mount St. Catherine region. Preliminary
assessments by GRENLEC suggest that
about 50 megawatts of electrical energy
can be reliably produced from geothermal
resources in the Mount St. Catherine region.
WIND
There is also signicant potential for wind

power especially along the eastern corridor
of the island. The average wind speed
ranges from 4.9-6.2 miles per second
34
(Weisser, 2004). However, wind speeds of

up to 9.7 miles per second were measured
by GRENLEC in 2010 at a height of 50 metres in the Top Hill region in Carriacou.
Over 90% of the wind blows from the
north-eastern and south-eastern parts of
the island (gure 2.7). Preliminary wind resource maps have been developed for
Grenada, Carriacou and Petite Martinique
(gure 2.8). Preliminary analyses of these
three islands have identied the best wind
resources. These are concentrated in the
northern peak of St. Patrick and on the
eastern corridor, especially at Pearls point,
located in St. Andrew (Hamlin).
Figure 2.8: Preliminary wind assessment for Grenada, Carriacou and Petite Martinique
Grenada
Carriacou and Petite Martinique
Figure 2.9: Preliminary solar map for Grenada
Source: Hamlin
The central point of interest is in the most

mountainous part of the island but it may
not be practical to build wind farms there
as it is difficult terrain. For example, Grand
Etang with an elevation of 1,950 feet and
Mount St. Catherine at 2,756 feet are located in the centre of the island. There are
three points of interest along the northeastern corridor in the island of Carriacou.
SOLAR
Grenada benets from a high number of
The boundaries and names shown

on the maps on these pages do not
imply official acceptance or
endorsement by IRENA.
sunny days. It has a radiation on a horizontal surface around of 5.81 kilowatt hours
per square metre (Weisser, 2004). The
country has two main seasons - rainy and
sunny. Daily insolation ranges from between ve to seven kilowatt hours per
square metre, with a total annual insolation
of 2,120 kilowatt hours per square metre.
Although solar incidence is high in all the
inhabited areas of Grenada, the strongest
solar radiation is in the southern part of
the island and along the coast (gure 2.9).
GRENADA
35
Frequent cloudiness in the centre of the island means solar radiation is reduced.
However, that part of the island consists
mainly of rainforest and is sparsely inhabited. The resource potential of solar, together with falling investment costs for solar PV and the rising price for fossil fuels,
mean solar is a very attractive option.
MICRO-HYDRO
Precipitation in Grenada varies by season,

so there are uctuations in the ow of water in Grenadas rivers and streams. In the
dry season river ow is reduced. Since the
average annual rainfall varies from the long
term average, it is likely that the stream
ow will vary annually. Nevertheless,
Weisser (2004) concludes there is a constant base ow that facilitates pico and
micro-hydro plants. This is due to the
topology of the intake of the water source.
KEY STAKEHOLDERS
The table on pages 38-39 provides an

overview of the key stakeholders in the energy market. These stakeholders were involved with the development of the RRA.
Most of them participated through the
workshop or via an interview. The Table 2.3
describes the meeting with the Non-State
Actors Panel (NSAP), which provided further insight for the RRA.
IMPORTANCE OF CIVIL SOCIETY
Civil society and Non-Governmental Organisations (NGOs) are important stakeholders in the RRA in that they ensure so-
36
cial and environmental integrity are maintained as society moves towards wide-scale
renewable energy deployment. In a small
society, developments which can have both
positive and negative social and environmental impacts must be monitored closely
by independent organizations. Engaging a
wider cross-section of such org-anizations
at an early stage in the development of the
RRA is crucial. This ensured buy-in and
ownership of the RRA. The incorporation
of feedback from these organizations into
the RRA is important to the successful implementation of the recommendations contained in this document.
Thus a meeting was held to engage the
member organizations of the NSAP.
Its purpose was to build on the two-day
workshop in which there had been limited
representation of this umbrella body. The
membership of NSAP is diverse and consists of organizations such as the Agency
for Rural Transformation (ART); North East
Farmers Association; Grenada Association
of Poultry Producers; Grenada Network of
Rural Women Producers; National Development Foundation and Friends of the
Earth Grenada.
The key outcome of the meeting was the
validation of some specic recommendations coming out of the workshop. NSAP
and its representative members were particularly supportive of stand-alone renewable energy technologies, especially to provide an affordable and sustainable energy
supply to energy-poor individuals and communities.
Courtesy of GRENLEC
GRENADA
37
Table 2.3: Key stakeholders in

the Grenada Energy Market
Ministry of Finance, Planning, Economy, Energy and Cooperatives
w
w
The energy division within this ministry is responsible for the entire energy market including
electricity and other products.
The division is also responsible for the development and deployment of renewable energy.
Ministry of Agriculture
w
This ministry has an integral role in the energy market as it handles pumps for irrigation and
utilises a proportion of energy sources such as diesel.
Ministry of the Environment

w
w
This ministry is responsible for climate change issues intricately linked to the use of energy,
especially from fossil fuels.
The ministry has embarked on climate mitigation projects that include the use of renewable
energy sources.
Grenada Electricity Services (GRENLEC)

w
w
The company is the sole generator, supplier and retailer for electricity.
The company has a strategic role to play in the development of renewable energy in Grenada
and has established an interconnection policy to accommodate renewable energy generation
in the grid.
Grenada Solar Power Ltd (GRENSOL)

w
A privately owned solar energy company that has installed several PV systems under the
interconnection policy.
Grenada Hotel and Tourism Association (GHTA)

w
The GHTA consists of hotels and resorts and consumes high quantities of electricity. The GHTA
has expressed the need to move its members to renewable energy sources and is working on
projects with that aim.
Grenada Development Bank (GDB)

w
38
Government supported development bank that has the potential to be a key nancier for
renewable energy projects.
Grenada Industrial Development Corporation (GIDC)

w
The GIDC promotes and supports investments in Grenada and has identied the energy sector
as a lucrative sector for investment especially in the manufacture of solar systems.
Grenada Bureau of Standards (GDBS)

w
This body plays a key role, providing standards and certication to ensure good quality
renewable energy equipment is entering the market.
St. George's University (SGU)

w
The SGU has signed a Memorandum of Understanding with the government of Grenada to
collaborate on research and development in energy efficiency and renewable energy.
T. A. Marryshow Community College (TAMCC)

w
This institution trains technicians and technologists in trades such as electrical installation. It
also has the role of retraining technicians to install and maintain renewable energy
technologies.
Non State Actors Panel (NSAP)

w
The panel consists of NGOs, CBOs and other non-state related organisations. Its role is to
stimulate and promote the uptake of renewable energy technologies, especially in rural and
energy-poor communities.
Association of Architects
w
This association is critical to the installation of integrated renewable energy sources in

buildings.
GRENADA
39
Courtesy of GRENLEC
40
ENERGY POLICY AND

REGULATORY FRAMEWORK
A department of the government of

Grenada rst set up the countrys electricity
supply in 1928. In 1960, Grenada Electricity
Services was created by an act passed by
the Grenada Legislative Council. The company was incorporated as a public liability
company and as a subsidiary of the Commonwealth Development Corporation
(CDC). The government of Grenada was a
shareholder. In 1961, the Electricity Supply
Ordinance gave GRENLEC the sole and exclusive licence to generate, transmit, distribute and sell electricity for 80 years
(GRENLEC, 2011).
In 1982, the government became the sole
owner of GRENLEC. Later the government
decided to divest its shares as part of a
structural adjustment programme and an
effort to inject funds and facilitate technology input into the utility. GRENLEC became
a public company in 1993. In 1994, the government sold half of GRENLEC to a private
enterprise, retaining only 10 percent equity
and selling the remainder to other investors
including employees and ordinary Grenadians. During the same year, the government published a new Electricity Supply
Act (ESA). It provided GRENLEC with a licence to operate until 31 December 2073.
The act effectively maintained the monopolistic electricity market.
The ESA also sets out the mechanism for
determining tariffs. As part of the ESA a
Public Utilities Commission (PUC) was to
be established to which GRENLEC was to
apply for tariff adjustments. Although the
PUC was never established under the ESA,
there is currently a strong commitment to
establish one.
In addition, the current ESA states that the

sole operator - GRENLEC - can harness
hydro and wind power in any part of
Grenada free of charge. This clause is
controversial and sets the tone for creating
a monopolistic environment as wind and
hydro power develop. The ESA does not
specify this condition in relation to other
resources such as geothermal and solar.
With the current proposal to amend the
ESA this will change as explained later in
this section.
The ESA requires GRENLEC to maintain an
excess minimum generating capacity of 2030% above the daily average peak demand
of the previous year, providing an opportunity for renewables. Finally, under the
ESA, the government of Grenada has the
option to revoke the licence after 30 or 55
years. However, there are extreme penalties
for doing so, since the government of
Grenada must pay all shares and debentures to all shareholders as it purchases the
company.
An important development in recent
months has been the intention of WRB (the
majority shareholder in GRENLEC) to sell
its majority shares in GRENLEC. The government of Grenada has used the opportunity to craft a new framework for the
electricity sector that supports the governments policy for deploying renewable energy technologies. The main changes are
summarised in the box below and a full explanation can be found in Appendix B. An
important adjustment to the framework is
the government of Grenadas potential removal of restrictions to the entry of IPPs
using renewable energy. With these new
adjustments, Grenada will be rmly on the
path to realizing the action outlined in the
NEP.
GRENADA
41
ENERGY PLANNING
1960
An act is passed by the Grenada Legislative Council, establishing

GRENLEC
1961
The Electricity Supply Ordinance gives GRENLEC the sole and exclusive
licence to generate, transmit, distribute and sell electricity for 80 years
1982
The government of Grenada becomes the sole owner of GRENLEC
1994
The government of Grenada privatises GRENLEC and licences are renewed

for a further 80 years
2011
The government of Grenada adopts the rst National Energy Policy and
includes a target of 20% renewable energy in the electricity mix by 2020
2012
The government of Grenada announces the Greenada vision 2030 in which

Grenada will have 100% renewables to support transportation and
electricity
2012
The WRB announces the sale of its shares in GRENLEC. The government
uses the opportunity to develop a new framework that will amend the
1994 Electricty Supply Act and introduce RPS and FITS for RE
In 2011 the Grenada NEP was adopted by

the cabinet of the Grenada government.
The policy contains a ten year Sustainable
Energy Action Plan 2010 2020, which is
being implemented. This policy is the most
comprehensive approach to date that articulates the government of Grenadas intentions on energy in general and renewable energies in particular. In the NEP, the
government proposes to have 20% of all
domestic energy usage (electricity and
transport) originate from renewable energy
sources by 2020.
The NEP also outlines a strategic roadmap
for realizing this vision (gure 2.10). This
roadmap is focused mainly on the development of utility-based renewable energy.

Furthermore, the government of Grenada
announced its GREENADA VISION 2030 on
8 May 2012 at the Sustainable Energy for
All SIDS summit. This is a plan to make
Grenada one of the rst countries in the
world to go virtually 100% green in its energy sector (electricity and transport).
The government believes that this can be
achieved with relatively little capital investment2. This is because Grenada is endowed
with its own local renewable sources - such
as geothermal, wind, solar and ocean ther-
2 Meeting with Dr. Hugh Sealy, Energy Policy Adviser, Ministry of Energy, held on 20 December, 2012
42
Figure 2.10: Grenadas renewable energy roadmap
Offshore
petroleum
laws and
regulations
revised
Energy efficency
Bill, Geothermal
Bill, Revised
Electricity Supply
Act enacted
70% RE for
electricity
production in
Carriacou and
Petite Martinique
Strengthening
of public and
private energy
institutions
10% of
building with
RE technology
Minimum of 20%
electricity and
transportation
energy demand
met by PE
Commence
offshore
hydrocarbon
production
NATIONAL ENERGY EFFICIENCY PROGRAMME
GEOTHERMAL AND RENEWABLE ENERGY PROGRAMME

Grenada
National Energy
Joins
Policy adopted
after 18 months of ECERA
consultation
Offshore
licensing
round
completed
20 MW
geothermal
plant online
Vehicle fuel
efficiency
standards,
incentives
for hybrid
and electric
vehicles
introduced
1-3 MW
waste to
energy
plant online
Second
20MW
geothermal
plant online
OFFSHORE HYDROCARBON PROGRAMME

Source: Grenada 2020 vision paper
mal and also has a relatively small economy. In adddition, the small generating capacity in Grenada (around 50 megawatts)
allows for a smoother transition to RE without signicant stranded costs of fossil-fuel
generating units.
planning. This could potentially delay the

100% vision. Therefore, in the short term,
the government of Grenada is also focusing
on the distributed aspect of the
GREENADA plan while not losing sight of
the major utility scale projects.
GREENADA, the vision for 100% renewable

energy, consists of four major projects.
Three are focused on utility scale generation: geothermal, wind and waste-toenergy. The remaining project will depend
on distributed solar.
The Renewables Readiness Assessment

(RRA) will help the government of Grenada
realise its new drive to renewable energy
deployment. The RRA will help identify the
key barriers to renewables deployment and
make critical recommendations towards the
realization of the NEP and related strategies.
The nature of the projects, such as the geothermal plant, will require more extensive
GRENADA
43
Proposed framework for

Grenadas electricity sector
1.
An exclusive licence will be granted to GRENLEC to generate electricity from fossil fuels only and for all transmission, distribution
and supply for a period of 45 years. However, no future owner of
GRENLEC will have any exclusive licence for longer than 30 years.
2. The government of Grenada will legislate Renewable Electricity

Portfolio Standards in the amended ESA, with penalties for noncompliance. These standards will determine the amount of renewable energy that GRENLEC must use to generate electricity at different times in the future.
3. Renewable Energy Special Purpose Vehicles (RESPVs) will be established for electricity generation from renewable energy sources
including geothermal, wind, solar and waste materials.
4. No entity will be allowed to own more than 50% of GRENLEC or of
an RESPV without the consent of the government of Grenada.
5. The government anticipates that it will be a major shareholder in
these RESPVs.
6. An exclusive licence to explore geothermal resources and to produce
electricity from a geothermal resource will be granted to the geothermal RESPV and NOT directly to GRENLEC.
7.
44
LPH will be allowed to participate in the RESPVs up to a maximum

of 50% and will be allowed to be the managing partner. However, if
LPH fails to perform (by reaching key milestones and deadlines),
the government of Grenada will have the right to choose another
partner.
8. GRENLEC must purchase electricity from the RESPVs at a reasonable rate to be determined by the proposed independent regulatory authority, ECERA.
9. A new interconnection policy for distributed generation will be established.
10. The government intends to pursue a strategy for electric vehicles in Grenada. LPH has
indicated that there are currently active pilot projects for electric vehicles under way in
Emera-owned companies. Upon successful conclusion of discussions regarding
GRENLEC, it would be the intention to pursue this kind of initiative in Grenada too.
11. An insurance fund will be established using best actuarial practices for companies operating in jurisdictions with similar risk proles.
12. An employee share purchase plan will be maintained to allow employees to purchase
shares in GRENLEC that the government of Grenada may put up for sale.
13. GRENLEC will contribute at least ve percent of its income before taxes to local charities
within Grenada.
14. LPH will take steps to ensure that GRENLEC provides training locally and overseas, including Canada. This is to enable GRENLEC employees to improve and acquire technical
and management skills relating to the business.
15. When requested to so do, GRENLEC will apply a ten percent discount on the commercial
power rates charged to the government of Grenada. This provision will not apply to
street lighting or to statutory corporations. As indicated, the government intends to
empower ECERA when established to regulate all rates offered by GRENLEC.
16. The scope of what may be dened as repurchase events has been reduced, removing
those elements that are beyond the direct control of the government.
17. The length of time granted to the government of Grenada to assert its rst offer and
rst refusal rights has been increased from 30 to 90 days.
18. Inappropriate representations and warranties have been removed.
19. A robust compliance mechanism is to be inserted both into the successor agreement
and the amended Electricity Supply Act.
20. The establishment of an independent regulatory authority (ECERA or any other) with
the power to change the means of rate adjustment has been acknowledged.
GRENADA
45
FINANCE AND INVESTMENT
Grenada enjoys a very stable nancial landscape. The nancial system consists of
commercial banks, credit unions and a development bank. The commercial banking
system is regulated by the ECCB. This also
governs and regulates the commercial
banking system in St. Vincent, St. Lucia,
Dominica, St. Kitts and Nevis and Antigua.
The local credit unions and other organizations providing nance are regulated by
the Grenada Authority for the Regulation
of Financial Institutions (GARFIN).
Energy development has been highlighted
in the Grenada Investment Generation
Strategy 2012-2016 developed by the
Grenada Industrial Development Corporation (GIDC) in 2011. This organization stated
that there was tremendous potential for investment in renewable energy technologies
in particular. The GIDC was established to
encourage and facilitate investments in the
industrial sector. The strategy suggests
there are niche markets in the manufacture
of solar water heaters and in the operation
and maintenance of both solar water
heaters and PV systems. However, this will
require the development of a partnership
with GRENLEC.
Financing for such investments, especially
solar and wind projects, could be provided
by local nancial institutions. Nevertheless,
the cost of nance can be prohibitive at a
current interest rate of 10-12% per year. Affordable nance, however, may be granted
by the Grenada Development Bank (GDB),
which was established by the government
to provide funding and developmental assistance to local investors. However, the
GDB nds grant funding a challenge at the
moment mainly as a result of the global
economic situation.
46
Remittances in the island amount to nearly

four percent of GDP and represent an important resource within the country's balance of payments as well as for economic
development. As remittances have a signicant macroeconomic impact, they could
be put to productive use, such as the development of renewable energy.
The government of Grenada has identied
sources of funding from international organizations for RE development. One of
the most important of these is SIDS Dock,
a new funding mechanism established to
support SIDS sustainable energy programmes. It will assist SIDS in their transition to low emission, climate-resilient development and open up a pathway to
limiting temperature increases. SIDS Dock
is meant to serve as a docking station
through which SIDS can centralise learning
and technical abilities. It will also give them
access to global nancial ows, especially
through the carbon market. The Abu Dhabi
Fund for Development (ADFD) is also considered an important new source of potentially affordable nance.
One development partner active in the
Caribbean region is the German Agency
for International Cooperation (GIZ), which
has been working with the Caribbean Renewable Energy Development Programme
(CREDP). Iceland, Brazil and Denmark are
other countries that may offer bilateral assistance relating to Grenadas focus on RE.
Multilateral banks such as the International
Bank for Reconstruction and Development
(IBRD) and the International Development
Association of the World Bank are also involved and are funding Grenada and St.
Lucia in their development of the ECERA.
The Organization of American States (OAS)
has supported several technical assistance
programmes through the Caribbean Sustainable Energy Program (CSEP).
Grenada also has access to international

funding agencies such as the Clean Development Mechanism (CDM) of the United
Nations Framework Convention on Climate
Change (UNFCCC) and the Global Environment Facility (GEF). The government of
Grenada, with other CARICOM members,
has secured funding through the GEF for
the Energy for Sustainable Development in
Caribbean Buildings project (GEF ESD
Caribes Project). Grenada will focus on soft
loans for investments in renewable energy
projects. It will also focus on deploying
renewable energy in the health sector and
ensuring emergency shelters are functioning in the aftermath of natural disasters.
The government of Grenada has already
drawn funds from the African, Caribbean
and Pacic-European Union Energy Facility.
It managed to secure EUR 2.5 million as
match funding supporting the Carriacou
wind energy project.
In addition, the government of Grenada
provides a tax incentive (exemption of the
15% VAT) for people investing in renewable
energy and energy efficiency technologies.
This is to further support the development
of RE in the island.
RE FINANCING
Financing sources
w Bilateral and multilateral
funding donors
w GDB
w Private banks and
credit unions
A perception of high risk for RE
investments may prohibit
nancing opportunities
GIDC is looking to invest in
energy development
Funding has been secured under
the EU-ACP Energy Facility to
invest EUR 2.5M in a wind farm
on the island of Carriacou
Grenadas Ministry of Finance has also produced a list of energy efficient equipment,
including energy saving bulbs and renewable energy technologies, which are also
exempt from VAT.
GRENADA
47
48
III. MARKET DEVELOPMENT

AND TRANSITION BY SECTOR
ON-GRID ELECTRICITY
FROM GEOTHERMAL
A critical component of the government of Grenadas GREENADA vision

is to generate 60 - 70% of electricity from geothermal sources. The
proposal is to implement this project in two stages, one in 2014 and the
second in 2018. Initially a 20 megawatt plant was planned as the rst
phase of the project, with a further 20 megawatts planned for the
second stage. These projects were planned for the Mount St. Catherine
area. These plans have since been revised. In stage one the plant capacity
was reduced to a ten megawatt generating plant to be installed in the
fourth quarter of 2015.3 The reduced capacity of the plant was ... due
to caution over the sustainability of the resource.4
Geothermal has the best potential among renewables for providing
baseload electricity generation. However, a higher risk is associated
with geothermal. This is due to the high costs and risks of failure in
proving the existence of the resource, large upfront investments and
longer planning cycles.
The strategic approach proposed by the Government of Grenada is to
form a Special Purpose Vehicle (SPV) to harness geothermal potential.
To implement this project, a public-private-partnership is proposed. A
geothermal bill and a concessionary agreement are under way to facilitate the process. The bill will provide the legal framework for developing
the project and managing the resources. In the new developmental
framework, the government will negotiate a resource development
agreement with an entity established under the SPV.
This concessionary agreement is designed to reduce the risks to this
entity by dening a number of issues. These include how resources are
to be allocated and the period of access to the land and resources allowed to the entity established under the SPV. Hence the agreement
will guarantee the SPV entity access to the resource and allow it to op-
3 Status of Implementation of Grenadas Sustainable Energy Action Plan July 2012

4 Ibid
GRENADA
49
erate a plant over an extended period of

time.
These negotiations are ongoing and are
partially nanced by the OAS under the
Energy and Climate Partnership of the
Americas. The government of Grenada is
also assisted in its negotiations by the Clinton Foundation. The concessionary agreement further aims to provide GRENLEC
with the necessary guarantee to obtain nance for the project. The geothermal bill
needs parliamentary approval. Since this
approval is still outstanding, the signing of
the concessioary agreement is delayed. This
has further delayed progress with the geothermal project.
A second critical barrier to the development of the project, contained in the concessionary agreement, is the need for environmental and social impact assessments.
These assessments are usually costly; however, the developer has to bear the cost of
these assessments. In addition, the areas
selected for the geothermal project are environmentally and socially sensitive. The
Mount St. Catherine area contains a forest
reserve which is the most important habitat
for wild ora and fauna on the island and
is rich in biodiversity. It is also a major
tourist attraction and serves local communities by providing water and other resources. As a result, civil society organizations have called for a more comprehensive
national consultation on the geothermal
project.5
The environmental concerns relating to the
Mount St. Catherine area are signicant in
that access to the terrain for the project
site is difficult. Access will mean some collateral damage cannot be avoided. The
need to fell trees and pave over ground will

have to be carefully assessed to minimise
long-term environmental damage. Other
environmental concerns need to be addressed, including residue from drilling.
The government of Grenada has indicated
that if the environmental and social impact
assessments reveal adverse environmental
impacts that cannot be effectively mitigated, the geothermal project will grind to
a halt. The government will not consider
enhanced geothermal extraction that requires the rocks to be fractured and is associated with seismic activity.6
The development of geothermal in Grenada
also needs to be looked at from the perspective of project nance. This is an important consideration since the consumer
base is small (around 44,000 consumers).
If the cost of developing the project is to
be eventually recovered from consumers,
they are likely to be burdened with tariffs
which may not be signicantly lower than
the present tariff. The geothermal project
would enable the country to be self-sufficient in terms of energy and protect the
consumer from future volatility in oil prices.
However, the cost of capital for a geothermal project or any other kind of renewable
energy (e.g. wind) will be the single largest
portion of the tariff paid by the consumer.
Hence, access to affordable nance is critical.
Given the high cost associated with the
construction of the plant and with the present tariff, it is difficult to see immediate
price benets to the end users. Given their
small number, customers could end up paying signicant sums if the recovery of investment costs is to take place over a reasonable period of time. However, with grant
5 Friends of the Earth Grenada, writing in the Grenada Informer, 26 October 2012
6 McKay, David (2009) Alternative energy: without the hot air p 98
50
or concessionary funding and effective regulation of the utility, the benets to the end
user can be increased.
RECOMMENDED ACTION
No full inventory has been taken of the potential in the Mount St. Catherine area. This
can only be done after wells have been
drilled and tested. High capital expenditure
is required to drill wells, and the presence
of enthalpy (heat) is only conrmed once
this capital outlay has been made. Despite
the reliability of geothermal resources in
supplying baseload electricity, the risk associated with exploration and extraction is
high.
Even before starting the exploratory phase,
it is important to undertake a comprehensive and comparative analysis of costs and
benets of the geothermal plant compared
with fossil fuels and other renewables. The
outcome of this analysis should be made
public so that all stakeholders have a clear
understanding of the benets of the project. It is further recommended that the social and environmental costs and benets
be a critical component of this assessment
and results subject to a public consultation.
Given the peculiarity of geothermal resources and the low consumer base, it will
be in Grenadas interests to obtain concessionary or grant nance for the exploratory
and drilling phases. This means costs paid
by consumers only relate to investments
made to build and operate the power
plants.
While nalising the concessionary agreement, the government of Grenada will need
to provide adequate safeguards to ensure
there are no adverse environmental and
social impacts. In order to manage this geothermal initiative, Grenada will need to fur-
ther develop capacities at different levels.

These could include the public and private
sector as well as nancial institutions. Public
institutions should have the technical capacities to establish and monitor the necessary regulatory framework.
The capacity within the public sector to
make decisions on the results of the environmental and social impact assessments
are also required. Private institutions should
gain the necessary capacities to effectively
manage the very specialised geothermal
operations. Finally, nancial institutions
should increase their ability to assess risks
associated with nancing geothermal projects. However, to deal with the risks associated with geothermal projects a regional
approach is proposed. Several countries in
the region are at the exploration stage in
their development of geothermal. This
means the feasibility of a regional geothermal risk fund could be explored further.
ON-GRID ELECTRICITY
FROM WIND AND SOLAR
In order to stimulate the deployment of

grid-connected renewables, GRENLEC developed an interconnection policy in 2008.
This policy allowed customers in both the
domestic and commercial sectors to install
grid-tied renewable energy systems to a
maximum installed capacity of 300 kilowatts. Domestic customers were permitted
to install a maximum of 10 kilowatts, while
commercial customers could install as
much as 100 kilowatts. During this pilot
phase a xed option (net metering) scheme
was introduced.
The interconnection scheme entered a second phase with an increased allocation of
500 kilowatts of renewables in 2011-2012.
During this second phase, two schemes
were introduced: a xed option (net me-
GRENADA
51
tering) and a variable option (net billing).

Under the xed option, customers sold
electricity to GRENLEC at USD 0.17 per kilowatt hour for a xed period of ten years.
The variable option allowed GRENLEC to
deduct from the customers bill an adjusted
annual average avoided fuel cost, relating
to the previous year. (This represents fuel
GRENLEC has avoided burning).
This second phase resulted in limited installation of additional capacity, as consumers perceive the payback period as too
long and the scheme too risky. The government of Grenada is currently negotiating
a new and more equitable interconnection
policy with the proposed new majority
shareholder of GRENLEC. The details of this
new scheme are shown in the box on the
next page.
As part of the NEP, the government of
Grenada indicated in 2011 that as much as
20% of the electricity mix should come
from wind and ve percent from distributed
solar. Hence wind farm projects are now
planned for the islands of Grenada and Carriacou.
Solar and wind farms require the development of large plots of land. Given the characteristics of these islands, limited land is
available and it is usually prioritised for
agriculture and tourism. Other problems
associated with the development of solar
and wind projects are related to land
tenure. Much of the land suitable for wind
farm projects is privately owned and highly
priced. In addition, the process for obtaining lands owned by government can be
lengthy.
Wind and solar potential are abundant on
the eastern corridor of the three islands of
Grenada, Carriacou and Petite Martinique.
This is where the main settlements are con-
52
Image 1: GRENLEC micro wind turbine at

Fort Frederick, Grenada
Courtesy of GRENLEC
centrated. However the high investment

cost for these types of projects means concessionary nancing will be required to
make such projects a reality. Economies of
scale are another obstacle to the development of the technology. The Carriacou wind
project, for instance, is a relatively small
project. This presents a challenge to suppliers used to developing wind farms that
are more protable due to their larger scale
and capacity. This means the cost of supplying equipment to these small projects
may be relatively high.
Environmental and social concerns are
NEW INTERCONNECTION
POLICY
The following are indicative rates for
the interconnection of renewable energy sources to the GRENLEC grid:
w
An overall cap on distributed

generation will be initially set at
ve percent of peak generation
and will be revised after consultation with GRENLEC and studies on grid stability thresholds.
Maximum capacity will be 100

kilowatts for commercial establishments and 15 kilowatts for
households.
An excess net billing system will

be used. Owners of small generating systems will be allowed to
use the energy that they produce
and sell the excess to GRENLEC.
Distributed generators will only

be compensated for generation
up to 1.5 times their monthly
consumption.
A oor price of XCD 0.53 (USD

0.20) per kilowatt hour has been
established for the rst set of
contracts, with the ability to revise the oor in year ve of a ten
year purchase contract.
other critical barriers to the development

of wind farms in particular. Concerns include noise, aesthetics and disruption to the
ight paths of birds. Wind turbines have
been associated with low frequency noise
from continually rotating rotor blades. Their

high towers may spoil the view of an otherwise beautiful landscape. Civil society
groups usually draw attention to environmental problems, and their opposition to
these projects needs to be softened.
RECOMMENDED ACTION
The islands are perceived as having relatively good wind and solar potential, identied in the preliminary solar and wind resource maps. However, substantial efforts
are needed to make further ground assessments of these resources to develop sitespecic data. This would enable lower initial
investments in the development of the resource. Resource maps will also assist small
investors deciding whether to invest in a
particular resource or combination of resources based on location. To this end there
is a need to conduct more local research
with local expert organizations such as the
meteorological office to create comprehensive RE resource maps for Grenada.
Areas with high solar and wind potential
need to be identied on the basis of resource maps and present grid infrastructure. This will allow relevant authorities to
allocate parcels of land for the development
of RE projects. Buy-in from the relevant
government departments is required as
they can allocate RE projects to Crown
lands not already allocated for other development purposes. This will incentivise
potential investors to develop projects on
sites with high renewable energy potential
and free of land tenure issues.
GRENLEC has invested in installed capacity
using fossil fuel which will meet consumer
demand during the coming years. The current tariff structure and the fact that GRENLEC investment is already locked into diesel
generation means it has no incentive to
GRENADA
53
Image 2: Erecting wind test equipment in Carriacou [Above]

Image 3: Wind test tower in Carriacou [Above right top]
Image 4: Wind test tower erected in Grenada [Above bottom right]
Courtesy of GRENLEC
substitute fossil fuels for renewable energy.

The cost of renewables will only be marginally lower or equal to the current cost
of generating electricity from fossil fuels.
Introducing more renewables might not
lower the average electricity tariff and
therefore there is no additional benet to
the end user. In order to support
renewables development, the government
of Grenada should secure grant and concessionary funding leading to lower average consumer tariffs and creating a greater
buy-in for renewables.
In addition, nance made available to end

users wanting to invest in distributed
renewable energy technologies (especially
solar PV) at concessionary rates will lead
to more renewable energy within the grid.
Lending institutions such as the GDB can
accommodate this in the form of concessionary soft loans for investment in RE. The
government of Grenada has received grant
funding of USD 400,000 to provide such
soft loans through the GDB to potential investors7.
In addition to the newly agreed intercon-
7 Meeting with Hugh Sealy, Energy Policy Advisor, Minister for Energy, held on 21 December 2012
54
nection policy, the benets of VAT removal

should also be evaluated. Its payment can
be perceived as a barrier to the development of grid-connected PV, since customers in the scheme still have to pay it.
The government will have to speed up the
creation of an independent regulatory entity that has an overview and arranges pricing within the electricity market.
Capacity building is critical to the development of wind and solar. The meteorology
offices capacity to conduct a comprehensive RE potential assessment and mapping
needs to be further reinforced. Lending organizations such as the GDB will play an
important role in the development of the
sector. However, they need to further develop their capacities to assess risks associated with loans for renewable energy investments.
On a small island like Grenada which would
import most renewable energy equipment,
standards and quality assurance are critical
to protect consumers and the grid. The
Grenada Bureau of Standards (GDBS)
would need to register and implement the
standards ensuring the use of high quality
RE equipment and related technologies.
The capacity of the relevant staff within
the bureau would need to be enhanced.
Grenada has a very good technical institute
in T. A. Marryshow Community College
(TAMCC) which has been training technicians in many elds. This institute could
collaborate in training technicians in renewable energy technologies.
OFF-GRID/STAND-ALONE
APPLICATIONS
The NEP does not specify a strategy for

the deployment of stand-alone technologies, since there is already a high electricity
access rate (99.5%). However, at times
Image 5: Stand-alone system, 1.8kWp

Courtesy of www.grensol.com
when there may be no access to the grid,

such as in the aftermath of a hurricane,
stand-alone technologies will become very
benecial. Grenadas Ministry of Environment has therefore embarked on a project
to install solar PV on emergency shelters
and health stations. Its main objective is to
ensure there is adequate power available
in the aftermath of a hurricane, which may
make access to the grid impossible. The
government of Grenada has already secured about USD 300,000 for this project
under the GEF ESD Caribes Project. In addition, off-grid renewable energy technologies could also provide cheaper energy for
productive activities like agriculture and
sheries in isolated areas, which are not
grid-connected.
The ESA provides GRENLEC with the exclusive right to generate, transmit and distribute electricity throughout the island.
This implies that even if a commercial consumer like a hotel wants to set up an offgrid captive plant for its own consumption,
it would need to obtain permission from
GRENLEC. The consumer base in Grenada
is small and GRENLEC has already invested
in generating capacity to meet its require-
GRENADA
55
ments. This means it is not willing to give

such high energy consumers the option to
put up captive plants whilst also drawing
electricity from the grid. Given the intermittency of wind and solar, consumers will
need the utility as a back-up.
Off-grid solutions can provide electricity
where possible, especially for households
that do not have access to the grid. However this will require nancing. Yet the lack
of concessionary nance and after-sale
services is among the barriers to off-grid
technology deployment on the islands. The
lack of information on the potential of these
resources available to individuals and communities is another barrier to off-grid
renewable energy.
Communities need to be empowered with
reliable information on the resource potential of technologies considered here. This
will allow them to make well-informed decisions on the types of renewable energy
technologies and the most reliable and affordable combinations available. Most developments in stand-alone systems, particularly solar PV, have so far come through
NGOs, who are particularly interested in
the benets of these systems to local communities.
RECOMMENDATIONS
Barriers to nance must be removed in

order to deploy renewables off-grid. This
sector will for the most part target households, especially those with a low income.
This means development grant funds should be the main source of nance for projects in this area. People interested need to
make specic grant applications. Possible
sources of funding are the GEF under the
United Nations Development Programme
(UNDP), which offers grants of up to USD
50,000 for projects with a direct impact
56
on local communities. It focuses on environmental protection, such as the mitigation and adaptation of climate change. The
ACP EU Energy Facility has allocated a minimum of EUR 10 million for such projects.
To further support off-grid deployment,
business models that make use of inward
remittances should be actively promoted.
A policy to promote these business models
should be developed in collaboration with
the government of Grenada, NGOs and the
private sector.
The capacity of technicians developed for
grid applications can also be employed to
promote these niche applications. The need
to register appropriate standards and ensure quality renewable energy and energy
efficient equipment is also critical to support this proposed model.
THERMAL HEATING
AND COOLING
Solar hot water systems are commonly

used in middle to upper-income households and in hotels. Between 2000-2008,
the overall number of solar thermal collectors imported into Grenada increased by
400%. In 2008, 4,000 solar water heaters
were installed in Grenada. The NEP clearly
underlined the importance of solar water
heating. It is highlighted as a policy standpoint mandating the use of solar water
heaters in all government buildings, hotels
and other commercial buildings with a demand for hot water. However, it does not
have a provision for the residential sector.
Although it does promote energy-efficient
buildings and equipment, the NEP does not
promote the use of RE technologies for
cooling applications. The prospect for solar
cooling in the Grenada hotel sector could
be explored. However, since the initial cost
of the technology is higher than regular

units, incentives will be necessary to encourage the uptake of this technology.
The agriculture sector is critical to the NEP.
Policy goals call for the production and
manufacturing of primary, value-added
agricultural and tertiary goods and products in the most efficient and sustainable
manner viable. The potential for the use of
renewable energy technologies in the agricultural sector, especially solar drying for
agriculture produce, is good. In the spice
sector, the solar drying of mace from nutmeg is an example. However, other applications can benet from solar drying, such
as sheries and other condiments in the
agricultural sector.
Agricultural lands are primarily irrigated
using diesel pumps. The government of
Grenada seeks out projects to procure and
deliver small irrigation pumps to farmers,
albeit fossil fuel pumps. The hydraulic ramp
pump is a practical solution for farmers.
The farming community has high demand
at the moment for these pumps, which
could be complemented by the solar
pumps. The application of these technologies is however restricted by its upfront
cost and a lack of knowledge of its operation and long term benets.
There have also been other applications in
the past. For example, windmills were used
to pump rain water out of drains to prevent
ooding during heavy rains. Wind-powered
pumps were used in the town of Grenville,
St. Andrew, which is below sea level, to
assist the ow of water from the town during downpours.
Waste from the production of sugar cane
was used in the past as a fuel for boilers in
the production of rum. Running water was
also applied as the source of energy to

grind sugar cane for producing sugar and
rum. In some of the rum-producing factories, watermills are still used to grind sugar
cane to produce molasses.
RECOMMENDED ACTION
Further measures to encourage solar water

heating should be taken. Funding in the
form of soft loans can be made available
to people wishing to invest in solar water
heating and to build awareness of its potential benets. The model for this can be
taken from the Public Service Cooperative
Credit Union (PSCCU), which has received
grant funding from the OAS and the United
Nations International Development Organization (UNIDO). The loans are provided at
a low interest rate for a period up to ve
years. System costs and installation range
between USD 1,100 and USD 1,480. This
fund has been available since 2010. Other
institutions such as the GDB and credit
unions can use this model to provide affordable funding to investors in solar water
heating.
Solar cooling (or air conditioning) could
follow a similar path to solar water heating
but would have to be driven by the private
sector. As was previously mentioned, the
cost of solar cooling is high compared to
conventional systems. These investments
would, therefore, benet from more incentives. To this effect, these units could be
included in the list of items contributing to
energy efficiency and could benet from
VAT exemption.
Grenadas building code is silent on the use
of energy-efficient equipment, such as airconditioning, to improve overall energy efficiency in buildings. It is therefore recommended that consideration be given to the
GRENADA
57
inclusion of this critical component in the

building code. This will support the deployment of renewable energy systems in buildings. The issue of energy efficient builidngs
will be addressed through the GEF ESD
Caribes Project.
In the agricultural sector, the government
of Grenada can take the lead through the
Ministry of Agriculture. The government
can seek out nance for projects that utilise
RE technologies. It has been noted that the
cost of ramp pumps is extremely high. The
government of Grenada should provide scal incentives to make these pumps more
affordable, in keeping with the policy it previously articulated for the agricultural sector. For example, ramp pumps can also be
included in the list of energy efficient
equipment exempt from VAT.
The government may also receive funds or
donations of irrigation equipment. It could
request such funding be used to purchase
renewable energy powered pumps or that
pumps from donors be powered from renewable energy sources. This can then be
used to develop projects in collaboration
with farmers and the Ministry of Agriculture
and Energy to deploy the use of these
pumps on farms.
58
Cost/benet analyses must be conducted

in order to further support the resource development strategy. These should take the
form of comparative analyses between
present fossil fuel equipment and that of
proposed renewable energy technologies.
An analysis of the life cycle of this equipment should be considered, in which related environmental concerns must be an
integral component. These comparative
studies will assist in making decisions on a
life cycle basis rather than on the commonly-used rst cost basis.
To conclude, capacity building in all the relevant sectors must improve. The capacity
of technicians has to be increased to ensure
they have the ability to design, install, operate and maintain the technologies. The
necessary capacity requirements at the
GDBS needed to deal with new ramp pump
technology should be improved to ensure
quality renewable energy equipment is procured. Risk assessment capacity within
lending institutions is equally necessary.
Finally, institutional capacity needs to considered. This will include building capacity
within the Ministry of Energy by upgrading
the current energy division to a national
sustainable energy organization.
IV. RECOMMENDED ACTIONS

The measures recommended below were offered by the stakeholders
following the ndings of the RRA workshop.
ON-GRID ELECTRICITY: WIND, SOLAR AND GEOTHERMAL
w
Develop a comprehensive strategic plan to support a roadmap in

the NEP.
Set up an independent regulator for the electricity market.
Finalise the concessionary agreement for geothermal and conduct

appropriate environmental and social impact assessments (including
road access to the chosen site).
Allocate lands for RE development in zones with high renewable

resources such as wind and solar.
Finalise the review of the current interconnection policy to promote

business models that can increase the deployment of renewables.
Waive the payment of VAT in electricity bills paid by consumers

producing electricity using renewable energy.
Develop GDBS capacity to provide standards and ensure quality

renewable energy equipment.
Support TAMCC in developing a curriculum and training technicians

in renewable energy technologies.
GRENADA
59
Develop the capacity of the meteorological office to carry out comprehensive renewable energy resource assessments.
Source concessionary credit lines for
the GDB so that it can make soft loans
available for investment in renewable
energy technologies. Develop the capacity of lending agencies to assess associated risks.
OFF-GRID
w
60
Develop a business model to design

and install stand-alone renewable en-
ergy systems, especially in the household sector.

w
Promote solar pumps for farmers.
HEATING AND COOLING

w
Encourage building codes to be updated.
Encourage the uptake of solar water

heaters for domestic and commercial
water heating through an enabling policy framework.
V. BEST PRACTICES AND

FUTURE COOPERATION
GOOD PRACTICE CASE STUDIES

Good Practice Case Study 1:
The first phase interconnection policy
The rst stage of the GRENLEC interconnection policy was a good

example of a more economically viable interconnection business model.
Under this rst phase, customers in both the domestic and commercial
sectors were allowed to install grid-tied renewable energy systems up
to a maximum installed capacity of 300 kilowatts. Domestic customers
were permitted to install a maximum of 10 kilowatts, while commercial
customers could install as much as 100 kilowatts. During this initial
phase, a xed option (net metering) was introduced.
The programme was very popular; 54 customers responded, and they
are now generating electricity from solar. The allocated generation of
300 kilowatts was rapidly exhausted. According to GRENLEC, the
success of the programme prompted the establishment of a second
phase.
Good Practice Case Study 2:
A wind farm project in Carriacou
The wind farm project in Carriacou is a good example of a private/public

partnership. The government of Grenada was successful in securing
grant funding from the European Union. These funds attracted matchfunding from GRENLEC to develop a 1.1 megawatt wind farm on the
small island of Carriacou.
When this project is completed, the price of electricity to Carriacou
GRENADA
61
customers may be reduced. The avoided

fuel dependency will at least allow this
small island to have a more secure and independent electricity supply. Coupled with
these economic benets, the island will
move one step closer to becoming a green
economy.
NEXT STEPS
The RRA in Grenada assesses the current

situation while also providing a forwardlooking framework of action that will enhance deployment of renewables. It has enabled IRENA to work with the government
of Grenada to facilitate a coordinated approach for setting priorities. This can inform
their discussions and shape the dialogue
with funding agencies concerning the implementation of action and initiatives
emerging out of the RRA. In facilitating this
process, IRENA leverages its comparative
advantage as a unique inter-governmental
agency dedicated to the promotion of renewable energy by offering countries access to a global network with the capacity
to follow up on actions and share best practice. The involvement of key national stakeholders in assessing opportunities and challenges for deploying renewable energy
technologies in Grenada exemplies the
collaborative and holistic approach of the
RRA process.
The RRA ndings show that Grenada is taking a two-pronged approach to enhancing
deployment of renewable energy: utilityscale projects for geothermal and wind,
and distributed generation primarily using
solar PV technology. The RRA lays the foundation for broader private sector partici-
62
pation in the renewable energy sector and

also recommends that measures should be
put in motion to secure low cost nancing
for renewable energy projects and in parallel develop a strategy for building the capacity of various stakeholders.
The process and outcomes of the RRA has
generated signicant interest in Grenada;
the experience from this extensive process
of engagement with this country has, in
turn, helped strengthen the methodology.
IRENA will facilitate the interaction with
supporting entities, including international
funding agencies and the private sector in
order to further the implementation of action plans formulated by countries as a result of the RRA. Partnerships will be built
with organisations working in the region.
IRENA has indeed already initiated the
process and garnered some funding to support actions identied to take the geothermal development forward. Discussions with
the CARICOM are underway to see how the
RRA can enrich the regional plan for RE
deployment and assist in its implementation.
IRENA will also initiate the development of
advisory services as a follow up to the
RRAs. These will initially include: a capacity
needs assessment, resource assessment,
technology roadmaps, local content and nance. These advisory services will be offered to countries where RRAs have been
conducted and upon request. The RRA is
just the beginning of a structured engagement with the country and will enable
IRENA to respond with country-specic
support and advice in future.
Courtesy of GRENLEC
GRENADA
63
VI. REFERENCES AND BIBLIOGRAPHY

A Low Carbon Development Strategy for Grenada, Carriacou and Petite Martinique.
Central Statistics Office (2011) Table of Workers Remittances, Ministry of Finance, Planning, Economy, Energy and Co-operatives of Grenada.
Eastern Caribbean Central Bank (ECCB) 2012. Trade Data as at October 2012. [On line]
http://www.eccb-centralbank.org/Statistics/index.asp#tradedata (Accessed 28 January
2013)
E-book available at: www.withouthotair.com
Government of Grenada (2011), The National Energy Policy of Grenada.
Government of Grenada (2012),Grenada Gross Domestic Product by Economic Activity
2000-2012. Government of Grenada.
Government of Grenada.
Grenada Electricity Services (2011), the Power of Art. Generating Imagination.
Grenada Electricity Services (GRENLEC), Grenada.
Grenada Hotel and Tourism Association (GHTA) (2012), presentation by Mr. Russ Felden,
former president of the GHTA, delivered at the Consultation in Trade in Services in the
EPA, held at St. Georges University, Grenada 29 September 2012.
Grenada Industrial Development Corporation (2011) Grenada Investment Generation
Hamlin, Thomas (undated), Preliminary solar and wind resource assessment for Grenada,
Carriacou and Petite Martinique, UNDESA Division of Sustainable Development.
64
MacKay, D.J.C. (2009), Sustainable energy-without the hot air.

Nexant nal report (2010); Caribbean Regional Electricity Generation, Interconnections
and Fuel Supply Strategy.
OECS (undated), presentation on the Eastern Caribbean Energy Regulatory AuthorityECERA, Organization Eastern Caribbean States Secretariat.
Schwerin (2010), Solar Market Analysis.
Strategy 2012-2016, GIDC, Grenada.
Telesford, J.N (2004), Assessing the impacts of energy efficiency measures on electricity
consumption in two resorts in Grenada. Unpublished M.Sc. thesis, Brunel University, UK.
UNDESA (2012) Road Map on Building a Green Economy for Sustainable Development
in Carriacou and Petite Martinique, Grenada. Division for Sustainable Development of
UNDESA.
United Nations Department of Economic and Social Affairs (UNDESA) (2010), Trends in
Sustainable Development: Small Island Developing States (SIDS). UNDESA.
Vincent, A (undated), Investment Promotion Framework. Grenada Industrial Development
Corporation (GIDC).
Weisser (2004), An Analysis of Grenadas Power Sector and Energy Resources: a Role for
Renewable Energy Technologies. Int. J. Global Energy Issues, 21, 189-218.
GRENADA
65
Courtesy of GRENLEC
66
VII. ANNEXES
ANNEX A
DETAILED LIST OF RECOMMENDED ACTIONS
Action 1
Finalise the review of the current interconnection policy.
Renewable application
On-grid/solar and wind.
Description
A review of the current interconnection policy could include

an analysis of the pricing mechanism for electricity. Emphasis
could be placed on the fuel charge component of the tariff and
on the VAT. A comprehensive review of the tariff as it relates to
the three consumer types: residential; commercial and
industrial could also be conducted.
Case studies, such as in the hotel sector; private individuals

who are grid-connected and other commercial customers
could be provided to support the recommended action.
An analysis of the investments required by different types of

consumers.
The government of Grenada is now negotiating a new more

equitable interconnection policy with GRENLEC.
Government of Grenada (Ministry of Finance, Planning,

Economy and Energy)
GRENLEC
Renewable energy companies e.g. GRENSOL
Domestic consumers
GDB
Actors
Deadline
End 2013
Key risks and challenges
Amendment to the ESA, secure enactment and implementation

expeditiously.
GRENADA
67
Keys outcomes
Initiation of negotiations between the government of Grenada

and GRENLEC.
Stakeholder consultation to establish acceptance of

revised policy.
Revised interconnection policy implementation.
Action 2
Create and start up an independent electricity regulator.
On-grid solar and wind.
Description
At the moment, the electricity market is self-regulated by

GRENLEC under the 1994 ESA.
This action therefore calls for the creation of a regulator that will
independently regulate the uptake of renewable energy
technologies, especially the appropriate, economically viable
pricing tariff for the stakeholders involved.
Grenada is participating in the ECERA project, but there is need

to have the 1994 ESA adjusted, or to put in place new laws
outside of the geothermal act. This will govern the establishment
of the regulator and remove current barriers created by the
1994 ESA.
Actors
Government of Grenada (Ministry of Energy;

Ministry of Legal Affairs)
GRENLEC
GRENSOL
Deadline
Key outcomes
68
End 2013
w
Regulatory framework designed.
Unresolved ESA issues claried.
Regulatory framework discussed with key stakeholders.
Regulatory authority created.
Action 3
Finalise the concessionary agreement.
On-grid geothermal.
Description
The concessionary agreement currently being negotiated

between the government of Grenada and GRENLEC is
intended to provide concessionary rights to GRENLEC to
develop the geothermal resource in Grenada.
Before construction of the plant begins, these concessions must

be agreed. This action proposes that the whole project is
cancelled if the agreement is not mutual.
Physical Planning Unit
Department of Forestry
GRENLEC
Community-based organizations
NGOs
Actors
Deadline
End 2013
Keys for success
Concessionary terms agreed.
Geothermal act passed and published.
GRENADA
69
Action 4
Conduct appropriate environmental and social impact
assessments (including road access to the chosen site)
On-grid solar and wind
Description
EIAs and SIAs are critical at all stages of the project to ensure
competing resources are optimised.
EIAs and SIAs must also be discussed and buy-in sought with
the key stakeholders at each stage of the project life cycle or
development.
Physical Planning Unit
Department of Forestry
GRENLEC
NGOs
Actors
70
Deadline
End 2014
Keys for success
EIAs and SIAs conducted. EIA and SIA consultations held with
key stakeholders. Project begins.
Action 5
Allocate land for RE development in zones benetting
from high renewable resources such as wind
Description
Obtaining lands for the development of wind and solar farms is

a challenge for investors such as GRENLEC and GHTA. Added
to this is the challenge of building data for resource maps for
Grenada.
This action means the government of Grenada potentially

allocates lands through relevant authorities in zones with high
RE resource potential for the development of RE projects. This
action must be supported by comprehensive renewable energy
resource maps.
Actors
Ministry of Finance, Energy and Planning (Energy Division)
Ministry of Agriculture and Lands
GRENLEC
Renewable energy companies
Grenada Hotel and Tourism Association
Deadline
End 2013
Land tenure and the allocation of lands for competing

developments is sometimes a challenge to the government.
This may affect the allocation of land for new RE development.
Key outcomes
Land identied in areas with high RE resource potential.

The relevant allocation authority is engaged.
Lands are allocated.
GRENADA
71
Action 6
Develop GDBS capacity to provide standards development
and quality for RE equipment and technologies.
Description
GDBS was established to provide services to industry and

consumers, by ensuring fair trading in goods and services.
The GDBS Act authorises GDBS to carry out its work
mandating provision of quality and testing services, standards
development and implementation and inspection services.
Imports of high quality products must be ensured as Grenada

moves towards an electricity market utilizing renewable energy
equipment and technologies. This action is intended to improve
and increase the capacity of the GDBS to provide services such
as testing, third party verication, standards development and
adaptation to renewable energy products.
Actors
72
Capacity building required relates to human capacity and

necessary equipment to provide testing where applicable.
Grenada Bureau of Standards
Ministry of Energy
Ministry of Trade
Other external donors
Deadline
End 2013
Sourcing funds to develop the required capacity. This project, as

with all other capacity building recommendations, can be blocked
or delayed due to lack of funding.
Key outcomes
Project identied for capacity building within GDB.
Capacity building project designed.
Project discussed with key stakeholders.
Project submitted to donors for possible funding .
Action 7
Develop the capacity of TAMCC to provide curriculum
development and training for technicians in RE technologies.
Description
New renewable energy technologies will require the training

and retraining of technicians and technologists to design, install
and maintain RE technologies and associated equipment.
TAMCC is the college providing education and training to the

local population in technical areas such as electrical installation,
refrigeration and air conditioning, plumbing and other buildingrelated trades.
Actors
This action proposes to develop the teaching capacity and to

some extent research within TAMCC to develop training
courses geared towards training technicians and technologists
in renewable energy technologies.
TAMCC
Ministry of Energy
St. Georges University
Other external donors
Deadline
End 2013

Key outcomes
Conduct audit to determine a suitable curriculum.
Design projects to improve curriculum.
Identify material and equipment to supporting

curriculum delivery.
Identify human capacity needs.
Implement aspects of project that do not require funding.
Seek funding to further develop capacity

(equipment and training).
GRENADA
73
Action 8
Develop the capacity - equipment and human - within the meteorological office
and the Ministry of Agriculture to carry out a comprehensive RE resource
assessment that can be used to develop solar and wind maps for Grenada.
Description
A critical problem is the lack of reliable data to prove the

resource potential of renewable sources, especially wind
and solar.
This action proposes to upgrade where possible the skills

and equipment required to gather data on the islands
resource potential.
Resource maps generated by this exercise will be for public

use. They will assist all developers, including the domestic
consumer wishing to install renewable technologies, in
making an informed decision on investments.
Meteorological Office
Ministry of Lands and Agriculture
TAMCC
GDBS
TCommunity-based organizations
TNGOs
TGHTA
Actors
74
Deadline
End 2013

Key outcomes
Design project to conduct resource mapping.
Assess current institutional capacity.
Seek funding to realise the project.
Conduct data-gathering exercise.
Design maps.
Action 9
Source concessionary credit lines for the GDB to make available soft loans for
investments in RE technologies. Develop lending agency capacities to assess risks
associated with these loans by supporting their collaboration with the GDB.
Description
The initial cost for investing in renewable technologies can be

prohibitive, so there is a critical need to seek low cost funding
for investors, especially for the domestic consumers. The ability
to assess the risk associated with these investments within
Grenada funding agenciesis also limited.
GDB efforts to source concessionary credit lines have been

thwarted by the governments current economic
circumstances. The interconnection policy offered by
GRENLEC is unattractive and has prevented GDB from raising
grants that could be used to support RE investment.
This action thus proposes to assist the GDB and other funding
organizations in nding concessionary loans and where
possible grants for RE investments.
GDB
Government of Grenada (Ministry of Finance)
Private sector
GIDC
Private Banks Association
Credit unions
Actors
Deadline
Mid-2014
GRENADA
75
Key outcomes
Review the current funding landscape.
Develop a funding mechanism proposal.
Develop proposals for funding.
Submit funding proposals.
Seek partnerships with international funding agencies

with experience in RE investments.
Action 10
Develop a business model to design and install stand-alone RE systems, especially
in the household sector and in rural areas;test and rene the model by developing
and driving through a pilot project.
Off-grid wind/solar/hydro (micro renewables)
Description
There is no business model at present supporting

stand-alone RE systems, but the business prospect for
stand-alone generation is high. This is especially true for
some rural communities.
In 2011 there were approximately 38,000 domestic consumers

of electricity.
The ESA 1994 allows domestic consumers to generate their

own electricity, but customers wishing to do so most
disconnect from the grid.
This action consists of a comprehensive analysis of the present

situation and the development of an optimal business model
allowing individuals and communities to develop stand-alone
RE systems.
Note: the design of this business model is the basis for any other action relating to this issue, including nancial decisions.
Actors
76
Government of Grenada (Ministry of Finance and Energy,

Ministry of Social Development; Physical Planning Unit)
Private sector (Chamber of Commerce)
GIDC
NGOs
Deadline
End 2013
Key outcomes
Research prospects for stand-alone RE systems.
Design business models.
Design a pilot project.
Gather project data.
Rene business model.
Implement business model on a large scale.
Action 11
Encourage the uptake of solar water heaters for
domestic and commercial water heating
Heating and cooling/solar
Description
The PSCU is currently offering soft loans to its members for the
purchase and installation of solar water heaters. Most of the
PCSU 8,000 members are households.
The PSCU was able to secure a grant to provide the loans.

However, to date only around 20 members have secured loans
to install water heaters. The problem seems to be a lack of
awareness of the nancial benets of solar water heating.
Although the grant also provides for advertising the available loans,
the lack of uptake suggests that people are still not convinced of
the benets. This action therefore proposes to assist PSCU and
other organizations embarking on such projects to raise awareness
of solar water heating benets.
Actors
PSCU
GRENADA
77
Energy Division, Ministry of Finance, Planning, Economy,

Energy & Co-operatives
Companies and individuals selling solar water heaters
Deadline
Mid-2013
Key outcomes
Engage key stakeholders
Create an educational and awareness campaign
Action 12
Review the technologies past and present for farm pumps.
Motive (pumps) - solar/wind
Description
Renewable energy technologies have been used for irrigating

lands for farming and for other pumping applications like ood
prevention in low-lying areas.
This action calls for a review of these technologies with the aim
of powering them using renewables.
Ministry of Agriculture
Ministry of Energy
Ministry of Works
Actors
78
Deadline
End 2013
Key outcomes
National review established.
Review conducted.
Results and nding documented.
Review recommendations are adopted.
ANNEX B
Amendments to the present electricity sector
by the Government of Grenada
A NEW DEVELOPMENTAL FRAMEWORK

FOR GRENADAS ELECTRICITY SECTOR
THE OPPORTUNITY
In November 2012, GPP, the majority shareholders (50%) of GRENLEC

(gure 1 ), advised the government of Grenada that GPP wished to sell
all its shares in GRENLEC to Light & Power Holdings (LPH) of Barbados.
LPH is majority-owned by Emera Inc., a Canadian utility and energy
services company based in Halifax, Nova Scotia. It is the parent company
of the Barbados Light & Power Company and also has a 19.1% interest in
St. Lucia Electricity Services (LUCELEC).
The government of Grenada also became aware that the shares (11.4%)
owned by ECH were effectively controlled by the parent company of
GPP WRB Enterprises based in Florida. LPH had also expressed an
interest in purchasing these shares.
The pending sale of the GPP and ECH shares provided the government
of Grenada with the following options:
A. It could assert its time-limited right to submit a bid to purchase
these shares outright. However, GPP retained the right, without any
reasons given, to sell to another bidder.
B. It could use the opportunity to review and revise the ESA which
governs the relationship between the state and the electric utility.
Its purpose would be to negotiate a successor agreement with LPH
that was in the best interests of Grenada, provided that LPH met
the governments requirements for a Qualied Purchaser.
The government initially decided to pursue both options simultaneously,
with the view that a parallel approach increased its chances of fullling
the key objectives for the electricity sector.
Although the government of Grenada did formally submit a bid for 50%
of the shares held by GPP and 11.4% of the shares held by ECH, the preferred option was for the utility to continue to be run effectively by the
private sector. The government would have an increased role in guiding
GRENADA
79
Figure 1
Current
ownership in
GRENLEC
Share in %
policy direction and would establish an independent regulator to ensure effective

regulation of service provision and the setting of tariffs.
Therefore, over the last few weeks, the government has aggressively pursued option
B. The Office of the Attorney General and
the Ministry of Finance and Energy have
worked assiduously to prepare amendments to the ESA and have been in active
negotiations with the prospective purchaser LPH.
KEY OBJECTIVES
FOR GRENADAS
ELECTRICITY SECTOR
w
Ensuring efficient and reliable operation of the service
Ensuring that consumers pay a

fair and equitable rate
Making a transition to renewable

energy in the fuel mix used for
generation, in line with the National Energy Policy and
GREENADA Vision 2030
Facilitating distributed generation using renewable energy by

individual households and commercial establishments
On 27 December, the major terms and conditions of a successor agreement between

the government of Grenada and LPH were
agreed. An amended ESA will govern this
successor agreement.
EASTERN CARIBBEAN HOLDINGS
The shares (11.4%) owned by ECH represent

an opportunity for the government of
Grenada to increase its share ownership in
GRENLEC through the NIS or directly.
80
A NEW ELECTRICITY SECTOR FRAMEWORK

AMENDMENTS TO THE ESA AND A NEW SUCCESSOR AGREEMENT
2.1 ISSUES THAT NEEDED TO BE RESOLVED
The government identied the following aspects of the existing legal and contractual framework that were considered disadvantageous to the citizens of Grenada
Problems with the old framework.

1.
The period for the exclusive licence to generate, transmit, distribute and supply was too long and
could not be justied on commercial terms. The current licence was not due to expire until 2073
(60 years from now).
2. There was ambiguity as to whether any entity could own more than 50% of GRENLEC. It is this
governments policy to limit ownership by any entity to 50% without the written consent of the
government.
3. The government had very limited means of ensuring that the utility implemented national policy
by making a transition to renewable energy for its own generation and by allowing for IPPs using
renewable energy.
4. The interconnection policy being applied by GRENLEC for distributed generation by Micro-Independent Power Producers (MIPPs) has proved to be highly unattractive to consumers.
5. The means of insuring the utility assets was not as robust as desired.
6. The scope of what could be dened as repurchase events was too onerous.
7. Time restrictions on the government of Grenada to assert some of its rights were too stringent.
8. A number of government representations and warranties in the original Share Purchase Agreement,
including protection of the purchaser from environmental liability, were not appropriate to a Successor Agreement.
9. The compliance mechanism and penalties for non-performance on the part of GRENLEC were
non-existent or too weak.
10. The present agreement and legislation was written before the establishment of the Eastern
Caribbean Energy Regulatory Authority (ECERA) had been proposed. It is the government of
Grenadas intention to empower ECERA (when established by Grenada and St. Lucia in the next
24 months) to regulate the tariffs/rates set by GRENLEC.
GRENADA
81
Indicative rates for interconnection of

renewable energy sources to the
GRENLEC grid:
w
An overall cap on distributed generation will be initially set at ve

percent of peak generation and
will be revised after consultation
with GRENLEC and studies on grid
stability thresholds.
CONCLUSIONS
Maximum capacity will be 100

kilowatts for commercial establishments and 15 kilowatts for
households.
The government has moved swiftly and decisively to protect and enhance the interests
of its citizens in a sector that is vital to national security. Access to affordable, reliable
and clean energy is critical for the sustainable economic development of Grenada.
An excess net billing system will

be used. Owners of small generating systems will be allowed to
use the energy that they produce
and sell the excess to GRENLEC.
Amongst other changes, the new developmental framework for the electricity sector
provides the following benets:
Distributed generators will only

be compensated for generation
up to 1.5 times their monthly consumption.
A oor price of XCD 0.53 (USD

0.20) per kilowatt hour has been
established for the rst set of contracts, with the ability to revise
the oor in year ve of a ten year
In the new agreement, LPH will be allowed

to purchase initially both the GPP (50%)
and the ECH shares. However, in keeping
with the governments policy that no entity
shall own more than 50% of GRENLEC, the
new agreement blocks LPH from having
any voting rights associated with the ECH
shares. It also allows the government of
Grenada to purchase the former ECH shares
up to one year after the initial purchase is
concluded at the same price that LPH purchased them.
82
The government of Grenada intends to exercise its right to acquire the ECH shares.
It also intends to provide the general public
with the opportunity to purchase a portion
or all of the acquired ECH shares.
Strengthens the capacity of the government to implement the national energy policy. This is achieved by putting
the framework for connection of renewable sources of energy to the grid
in place and by introducing standards
and penalties for non-compliance.
Charts a clear path towards a low carbon economy by dening the commercial mechanisms that will be used to
facilitate the transition to renewable
energy.
Protects Grenadians by supporting the

establishment of an independent regulatory authority ECERA.
Empowers the ordinary citizen to own

and operate small electricity generation
systems using indigenous renewable
energy sources.
THE NEW FRAMEWORK FOR GRENADAS ELECTRICITY SECTOR
1.
An exclusive licence will be granted to GRENLEC to generate electricity from fossil fuels
only, and for all transmission, distribution and supply for a period of 45 years. However,
no future owner of GRENLEC will have any exclusive licence for longer than 30 years.
2. The government of Grenada will legislate Renewable Electricity Portfolio Standards in

the amended ESA, with penalties for non-compliance. These standards will determine
the amount of renewable energy that GRENLEC must use to generate electricity at
different times in the future.
3. Renewable Energy Special Purpose Vehicles (RESPVs) will be established for electricity
generation from renewable energy sources including geothermal, wind, solar and waste
materials.
4. No entity will be allowed to own more than 50% of GRENLEC or of an RESPV without
the consent of the government of Grenada .
5. The government of Grenada anticipates that it will be a major shareholder in these
RESPVs.
6. An exclusive licence to explore geothermal resources and to produce electricity from a
geothermal resource will be granted to the geothermal RESPV and NOT directly to
GRENLEC.
7.
LPH will be allowed to have a maximum 50% participation in the RESPVs and will be
allowed to be managing partner. However, if LPH fails to perform (by reaching key milestones and deadlines), the government of Grenada will have the right to choose another
partner.
8. GRENLEC must purchase electricity from the RESPVs at a reasonable rate to be determined by the proposed independent regulatory authority, ECERA.
9. A new interconnection policy for distributed generation will be established (indicative
terms are shown in the box on opposite page).
GRENADA
83
10. The government intends to pursue a strategy for electric vehicles in Grenada. LPH has
indicated that active pilot projects for electric vehicles are under way in Emera-owned
companies. Upon successful conclusion of discussions relating to GRENLEC, it has indicated it intends to pursue this kind of initiative in Grenada too.
11. A self-insurance fund will be established using best actuarial practices for companies
operating in jurisdictions with similar risk proles.
12. An Employee Share Purchase Plan will be maintained to allow employees to purchase
shares in GRENLEC that the government of Grenada may offer for sale.
13. GRENLEC will contribute at least ve percent of its net income before taxes to local
charities within Grenada.
14. LPH shall take steps to ensure GRENLEC provides training locally and overseas, including
Canada, so as to enable GRENLEC employees to improve and acquire their technical and
business management skills.
15. When requested to so do, GRENLEC will apply a ten percent discount on the commercial
power rates charged to the government of Grenada. This provision will not apply to
street lighting or to statutory corporations. As indicated, the government of Grenada intends to empower ECERA when established to regulate all rates offered by GRENLEC.
16. The scope of what may be dened as repurchase events has been reduced, removing
those elements that are beyond the direct control of the government of Grenada.
17. The length of time granted to the government of Grenada to assert its rights of rst offer
and rst refusal has been increased from 30 to 90 days.
18. Inappropriate representations and warranties have been removed.
19. A robust compliance mechanism is to be inserted both into the Successor Agreement
and the amended Electricity Supply Act.
20. The establishment of an independent regulatory authority (ECERA or any other) with
the power to change the means of rate adjustment has been acknowledged.
84
GRENADA
85
86
GRENADA
87
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GRENADA

RENEWABLES READINESS ASSESSMENT

II. ENERGY AND RENEWABLE ENERGY CONTEXT

III. MARKET DEVELOPMENT AND TRANSITION BY SECTOR

IV. RECOMMENDED ACTIONS

V. BEST PRACTICES AND FUTURE COOPERATION

VI. REFERENCES AND BIBLIOGRAPHY

ANNEX B: A NEW DEVELOPMENTAL FRAMEWORK

Caribbean Community and Common Market

GDP growth rates in 2003-2011

Characteristics of energy markets in a few Caribbean SIDS

GRENLEC micro wind turbine at Fort Frederick, Grenada

Comments or questions about this Renewables Readiness Assessment report

RENEWABLES READINESS ASSESSMENT

Tourism and hospitality services

RENEWABLES READINESS ASSESSMENT

The State of Grenada consists of three islands Grenada, Carriacou and

Grenadas commitment to the mission of the International Renewable Energy Agency

Geothermal resources in Grenada have the

RENEWABLES READINESS ASSESSMENT

Authority (ECERA). This initiative by the

As a result of the Renewables Readiness

Set up an independent regulator for

Finalise the concessionary agreement

Finalise the review of the present

Enhance human capacity to enable

Source concessionary loans and grants

USD 0.40 per kilowatt hour

RENEWABLES READINESS ASSESSMENT

The three islands of Grenada, Carriacou and Petite Martinique together

Figure 1.1: GDP growth rates 2003-2011

Source: Government of Grenada, 2012

the service sector are education (23.4%),

RENEWABLES READINESS ASSESSMENT

Figure 1.2: GDP contribution

Source: ECCB, 2011

Figure 1.3: Total fossil fuel imports (MTOE*)

*Million Tonnes of Oil Equivalent

same period if the multiplier effect is taken

foreign exchange, and will provide a more

A Renewables Readiness Assessment

RENEWABLES READINESS ASSESSMENT

emerging from the assessment is therefore

Grenadas Energy Prole

relation to renewable energy in particular. During the last day a discussion

USD 69.1 million

The RRA methodology has proved to

RENEWABLES READINESS ASSESSMENT

II.Energy and Renewable

Caribbean Islands are characterised by a high dependence on volatile

Another peculiarity of Caribbean electricity

Figure 2.1: Growth rates in net

According to a 2010 tariff survey by the

Source: ECCB, 2011

Delegates at the 44th meeting of the

RENEWABLES READINESS ASSESSMENT

Table 2.1: Characteristics of energy markets in a few Caribbean SIDS

Source: International Renewable Energy Agency (IRENA), 2012

Maximise economies of scale in regulating the electricity sector in the OECS;

Utilise more efficiently and effectively