November 6-12 is Energy Week in the Caribbean.
The winds of change are blowing in Haiti’s energy sector. President Joseph Martelly identified four priorities for his term: education, employment, environment and rule of law (Education, Emploi, Environnement, Etat de Droit – four “E”s in French). Last month, as the President attended a workshop on energy organized by Rene Jean-Jumeau, the recently nominated Secretary of State for Energy, he added energy as the fifth “E”. He emphasized the impact of the current energy situation on Haiti’s decreasing forest cover as trees are cut for the production of charcoal, and the importance of transitioning to a modern and resource efficient energy supply. President Martelly concluded, “Electricity is needed to develop Haiti’s industry, and cast away the darkness of moonless nights.” This added priority was also reflected in the general policy statement from the Prime Minister Garry Conille on October 11th, where he mentioned the development of alternative sources of energy (notably) and the improvement of the country’s electricity supply as national priorities.
Haiti’s energy sector is marked by very low per/capita energy consumption, a very low electrification rate, a high dependency on fossil fuels with the highest energy intensity ininin the whole Latin America and Caribbean (LAC) region, and high supply prices. Haiti’s energy sector is primarily reliant on charcoal, which represents 75 percent of the country’s final energy consumption and, along with fuel wood, often constitutes the only source of energy for households living in rural areas. Intensive use of charcoal has been hugely detrimental to the vegetation cover of Haiti. Over 70 percent of Haiti’s 10 million people live without access to the electricity grid, which has led President Martelly to comment, “in terms of energy, Haiti is still in the Middle Ages.” About 63 percent of electricity generation in the country is based on imported diesel fuel, mainly from Venezuela. Hydropower constitutes 37 percent of the country’s electricity generation. A recent WorldBank/Nexant report identified imported distillate to be the most expensive fossil fuel resource option for Haiti in the future, after LNG and coal, with a forecasted levelized price of US $22.45/GJ over 2014-2028.
Cheaper and cleaner energy supply options exist for Haiti. Our studies, as well as recent reports by the Haitian government and the WorldBank/Nexant, all determined that Haiti has significant potential for a variety of clean, cost-effective, decentralized energy options. Worldwatch is currently performing wind and solar resources assessments for Haiti. Early results of these assessments presented by the Worldwatch team at the energy workshop highlighted that wind resource maps showed a strong potential, with three regions in Haiti that have particularly high wind potential at 5 kilometer resolution: the northwest, the southwest, and the areas just north and east of Port-au-Prince, and that nearly all of Haiti has high levels of Global Horizontal Irradiance (GHI), which is the type of radiation applicable to solar photovoltaic (PV) development. Development of solar technologies allows for decentralized power production that can power micro-grids and reduce the interconnection burden on the unreliable central grid. Distributed energy systems are also generally faster to build than large utility scale projects, which would allow Haiti to electrify as a quicker rate.
The livelihoods of the Haitian people and the nation’s sustained economic growth depend on a reliable supply of electricity at affordable prices. For risk management and pricing stability of the electricity tariff, as well as better access to electricity in rural areas, Haiti needs to diversify its energy sources. To develop these resources, the Haitian government needs to create a legislative and policy environment that can harness this alternative resource potential. Worldwide, renewable energy deployment has consistently been a policy-driven process. The design of supportive policies, as well as their effective implementation, has been essential for countries that are today’s renewable technology leaders. The recent creation of the position of Secretary of State for Energy marks a positive development in the strengthening of capacities and executive power on energy issues in Haiti. We see the following issues as key areas where the new energy administration could make progress rapidly:
- An electricity planning process that lays all the available options on the table and integrates renewable energy technologies, conventional energy sources, and energy efficiency options into electricity planning and analyzes their socio-environmental impacts. Rather than using the traditional electricity planning method focused on least-cost supply expansion, power planners in the United States, Europe have used a methodology called integrated resources planning (IRP) that seeks to integrate a broader range of technological options, including technologies for energy efficiency as well as decentralized non-utility generating sources into the mix of potential resources. Also, IRP integrates a broader range of cost components, including environmental and social costs in the best option selection criteria. In IRP, energy efficiency measures and clean decentralized energy are given as much weight as conventional centralized power plants. The investment in electricity infrastructure is chosen based on the criteria that they provide secure energy services at the lowest economic, environmental, and social costs and risks.
- Assess current policy barriers and needs for legislative reform: many of the past laws, such as the organic law of August 20th 1989 defining the responsibilities of Électricité d’Haïti (EDH), or other measures such as the level of taxes for imported equipment, are hindering the development of alternative sources of fuels and decentralized generation in the country. The current set of energy regulations needs to be reassessed and examined through an inclusive and transparent process. This assessment will help identify needs for legislative reforms creating a new policy framework that encourages the exploitation of renewable resources as well as the facilitation of energy access in rural areas.
- Develop “investment grade” policies to incentivize local cleaner sources of energy: domestic policy is the key determinant of whether and under which conditions investors will deploy their capital. However, not all policies are created equal. Past studies have shown that to overcome investors’ risk aversion, countries must deploy “investment grade” policies, or in other words, policies that are able to provide long-term certainty on the scale and implementation of the incentives associated with renewable energies.
- Assess financing needs and barriers to attract investments in the energy sector: renewable sources of energies contribute to reducing electricity poverty in rural areas through off-grid generation systems. However, Haiti’s market for renewable technologies is nascent, and slow to develop partly due to a lack of consumer financing options and information. While developing the political framework for energy, a dialogue should be established including participants from the banking sector, political realm, private sector and prospective customers in order to begin a comprehensive review of the financial barriers for developing renewable energies faced by various actors in the sector. In the aftermath of the earthquake, large amounts of capital have been pledged and committed by the international community to support Haiti’s reconstruction. US $351 million have been signed, out of the US $579 million pledged to the Haiti Reconstruction Fund. Given the importance of the energy sector for the reconstruction and development of the country, the government of Haiti needs to channel and use these international funds strategically to create the conditions that attract domestic and foreign private capital.
- Design policies that encourage rural energy development: Nearly all of Haiti’s rural population does not have access to electricity. However, rural populations have untapped natural resources such as bagasse, rice husks, biofuels, and animal manure that can contribute to the power mix, if only there was a market for their power production. This could be achieved by developing an incentive program to develop power from local resources, and by rewarding power production from even very small producers like in the VSPP (Very Small Power Producer) program in Thailand. This can help develop local engineering and project development capacity.
- Provide education on energy: investing in a newer generation of scientists, technicians and politicians who are well educated on energy issues will allow a progressive strengthening of local capacities. The Worldwatch Institute has started a discussion with the Faculty of Sciences of the State University of Haiti to develop a new syllabus focused on sustainable energy solutions.
At this crucial time, the Worldwatch Institute has been invited to Port-au-Prince to participate in an entire week of discussions about the state and future of the energy sector involving high-level ministerial panels as well as citizen grassroots engagement initiatives. We will highlight the many ways by which renewable energies can contribute to Haiti’s development and suggest appropriate policies to harness Haiti’s renewable energy potential. We will keep posting news from the ground. And stay tuned for my presentation on Tuesday morning!