Despite the well-recognized potential for, and steps to promote, energy efficiency – such as tax and other incentives for energy efficient equipment, as well as energy standards and labeling – progress in deployment has been slow. This is mainly due to an over-reliance on a risk averse private sector to carry out EE projects in the absence of a suitable market framework, which lack such options as ESCOs, to support them. Frequently, the private sector lacks access to financing and the institutional and technical capacity to carry out these projects. The utility on the other hand is facing a future where they will see revenues decline due to loss of load from the penetration of both renewables and efficiency. There is an opportunity for the utility to become a player within the emerging energy service paradigm within the region.
An Integrated Utility Service (IUS) Model could be a “delivery or implementation mechanism” for demand side renewable and energy efficiency projects as well as new and additional business model for utilities in a rapidly changing environment.
In the past decade, different stakeholders have conducted research and developed concepts for “kick starting” the ESCO markets within the Caribbean Community. There have been focus on private as well as public ESCOs. The approach within this initiative is to concentrate on the IUS model and to develop concepts under the regional strategy on sustainable energy, for which energy efficiency is a key component. This would provide congruence between the policy designs and the model, ensuring that national-level incentives for energy efficient technologies, as well as the appropriate regulations and standards for consumer protection, are “suitably supported”. The connection with the Sustainable Energy Strategy and Policy of the CDB is also critical to the fundraising that is necessary for the project to be successful.The intention is to support and facilitate the implementation of a Pilot IUS model through two or more utilities within the region. There is an expectation that the pilot can be up-scaled to other utilities, if successful concept proofs are realised.
Phase I which was designed as a scoping or Readiness Assessment Task, was completed in 2017 with the following milestones:
1.Collection of available information on the ESCO experience of the Caribbean, [Draft Synthesis Report, December 2016];
2. Understanding the key objectives and needs of the main stakeholders, through discussions during a Scoping Mission [March–April, 2017];
3. Preparation of a Synthesis Report, to include outcomes from the aforementioned Scoping Mission [April 2017];
4. Conduct of a Knowledge Exchange Workshop with stakeholders to discuss the “applicable IUS options for the region” for validation and finalization [May 2017]; and
5. Preparation of a Proposal for the IUS model, to be piloted in two or more utilities [June 2017].
Implementation of pilot projects in Barbados, Belize and Guyana will be supported in Phase II in 2019.