Despite our efforts to diversify our energy sources at the national level, Dominica still remains heavily dependent on imported fossil fuels for energy. The lack of diversity in the current energy scenario of Dominica exposes the country to the volatility of global fossil fuel prices, instability in supply due to delayed shipments, higher greenhouse gas emissions, and high cost of electricity to consumers.
With the importance of energy as a critical input into virtually all sectors of any economy, the current energy situation in Dominica directly undermines efforts to improve the island's economic competitiveness, investor attractiveness and ability to fully integrate into the global economy.
The Government of the Commonwealth of Dominica is aware of the crippling economic and environmental effects of the continued use of fossil fuels as the main energy source. In response, it has outlined in its commitment to pursue renewable sources in its Medium Term Economic Strategy, which states that major investments in electricity generation and distribution are necessary to facilitate the requirements for the further diversification of the economy.
This project seeks to catalyze and accelerate the development of indigenous energy resources and increase the use of renewable energy as well as energy efficiency and conservations.
Project Objective
The objective of the LCDP Project is the removal of the policy, technical and financial barriers to energy-efficient applications and solar-photovoltaic technologies in Dominica's streets, outdoor areas and public buildings nationwide, initially targeting up to five communities for further scale up.
Barrier Analysis
Regulatory, policy and legal:
- There is no detailed sustainable energy action plan that would allow policy makers to define the pace of RE development in terms of annual installed capacity
- Lack of standards for importation of RE and EE equipment and its installation using best practices
- No information on the impact of knowledge of the impact of higher levels of IRE into grid
- No Policy on feed-in tariff to safeguard cost recovery of IPPs feeding into the national grid
Institutional, Knowledge, Awareness:
- There is a need for more capacity strengthening and exposure to more diverse sources of energy-related technical advice or mechanisms for receiving sound advice
- There is need for an established Department of Environment and Climate Change with legal mandate to implement a low carbon climate resilient policy
- General lack of awareness and knowledge of the EE and RE methods to reduce high electricity costs
- The financial community, including lending institutions do not have sufficient knowledge to asses RE and EE loan risks, and returns on these type of investments
Market and Financial:
- Large upfront investment costs in RE and EE technology
- Lack of effective government financial incentives that would catalyze these investments
- Public sector investments are often constrained by limited budgets
- Alternate public-sector financing mechanisms, such as Energy Performance Contracting or Third Party Ownership, have not been extensively tested in Dominica
Project Components
Component 1
Institutional and technical knowledge, awareness and Capacity for Energy Efficient application a and Renewable Energy Technologies
- This component is intended to address the barriers associated with the lack of technical knowledges and capacity in Dominica to plan, design, implement, operate and maintain RE/EE projects
Component 2/p>
Policy measures and enforcement of EE applications and RETs
- This component would address gaps in existing policies and standards that have not provided the necessary confidence for investors and donors into low carbon deployment in the Dominica energy market
Component 3
Financing options and mechanisms for EE applications and RET diffusion
- This component would address the financial barriers and the associated lack of financial incentives for EE applications and RE installations in Dominica
Project Main Activities
Under Component 1
Technical Barriers (Knowledge, Awareness, Practice)
- Desk study of selected EE applications and RETs
- Pilot EE applications and RET with battery storage
- Knowledge transfer of demonstrated EE applications and RET
Under Component 2
Policy Barriers (Policy, Enforcement, Institutional
- A strengthened “Department of Climate Change, Environment and Natural Resource Management
- Develop specific action plans for implementing low carbon development
- Develop Minimum Energy Performance Standards (MEPS ) for EE and RE Products
Under Component 3
Financial Barriers (Financial and Institutional Mechanisms)
- Prepare plans for scaled up RE and EE installations
- Establish Climate Change Trust Fund Secretariat
- Promotion and Use of the CCTF for scaling-up low carbon development
