Saint Lucia National Energy Policy From 2023 to 2030

5. Ensure a safe, reliable and affordable supply Key Indicators of NEP Achievements of petroleum products and their efficient and environmentally safe storage, handling and use. The NEP has several quantitative key indicators for increased renewable energy in the country’s energy

6. Ensure that human, technical and institutional sector, improved energy efficiency, and reduced GHG capacities are aligned with the needs of the energy sector and policy objectives, by integrating emissions by 2030, as shown in Figure 1. According to social and gender aspects into energy sector these indicators, the share of electricity from renewable development; and energy is expected to rise dramatically from only about 5 percent at present,7 to 50 percent by 2030.

7. Facilitate access to financing for renewable energy and energy efficiency. This ambitious expansion of renewable energy is expected to support an increase of around 10 to 33 Supporting these seven goals are 30 objectives. To percent of electric vehicles in the transport sector, attain these objectives, a detailed NEP Action Plan, depending on the type of vehicle. The NEP also places with 145 actions, will be implemented at the working strong emphasis on improving energy efficiency, calling level in the energy sector. Reflected in the design of for energy audits of government buildings, efficiency- the NEP are 12 core values defining the vision for the labelling of appliances, and public education on energy energy sector in 2030. These values fall into three conservation. broad categories: (i) improved management of energy demand and supply, (ii) institutional strengthening, and Decarbonisation of the energy sector, improved energy (iii) human resource development. efficiency, and enhancements to energy security are expected to help Saint Lucia not only prevent future growth of GHG emissions in the energy sector but also scale back considerably, targeting GHG emissions in 2030 that are seven percent below what they were in 2010. � FIGURE 1: KEY QUANTITATIVE INDICATORS OF EXPECTED NEP ACHIEVEMENTS BY 2030 50% 33% 30% 7% 20% 10% of to of total of the lower GHG reduction of the public electricity private government emissions in of energy transport fleet produced vehicles sold vehicle fleet the energy consumption powered by to be from to be electric to consist sector than in schools electricity renewable vehicles of electric in 2010 energy vehicles Sources: Mercados-Aries International, Technical assistance updating the National Energy Policy for Saint Lucia, June 14, 2022 and Government of Saint Lucia (2021), Saint Lucia’s First Biennial Update Report: Department of Sustainable Development, Ministry of Education, Innovation, Gender Relations and Sustainable Development. Saint Lucia | National Energy Policy 6 Potential Sources of Financing for Energy Transition In 2020, global financial flows for the transition In addition, the plan assesses the risks of not meeting from fossil fuels to renewable energy amounted to objectives—ranked as minor, medium, significant or $501 billion. Lending for sustainable energy reached critical—and proposes related mitigation measures. $321.4 billion in the first half of 2021, setting an all- time record. Major international financial institutions The ministry with responsibility for energy will have that have affirmed commitment to “green finance” overall responsibility for implementing the Action Plan and could be possible sources of financing for Saint for the NEP. A Monitoring and Reporting Group will Lucia’s energy transition, are: the World Bank, the Inter- be created to coordinate the actions of the various American Development Bank (IDB), the Development stakeholders and report on progress. Bank of Latin America (CAF), and the Caribbean This group will have an operating manual that will Development Bank (CDB). define its governance and procedures. It will meet on a quarterly basis to allow for timely identification of NEP’s Action Plan: Tracking the barriers and risks, evaluation of progress, and adoption of mitigation measures to address any risks identified. Energy Transition The Group will also issue annual reports, as well as a The Action Plan provides a detailed framework for midterm report in 2026 and a final report in 2030. These monitoring the NEP’s implementation. This plan reports will record the achievements of the NEP at the specifies dates for 145 actions associated with the 30 specified dates and recommend any adjustments to objectives supporting the NEP’s seven goals, along ensure full implementation of the Action Plan. with the institutional responsibility for each action. Photo: St. Lucia Electricity Services, Limited Saint Lucia | National Energy Policy 7 SAINT LUCIA NATIONAL ENERGY POLICY (2023–30) Country Context of the Policy Saint Lucia | National Energy Policy 8 COUNTRY CONTEXT OF THE POLICY The Economy In 2019, the cost of oil imports to Saint Lucia was about USD 105 million, accounting for 16.8 percent of annual Saint Lucia is a small island nation in the Eastern import expenses and about 5 percent of GDP (USD Caribbean with about 180,000 inhabitants. Endowed 2.1 billion). 15 with a dramatic volcanic, mountainous landscape and beautiful beaches, the country’s economy depends The economic slowdown starting in early 2020, as a heavily on tourism for income. With GDP at around result of the Covid-19 pandemic, led to a decrease in USD1.6 billion8 and per capita GDP of about USD 8,9529, the cost of oil imports to about USD 53.4 million 16, Saint Lucia is classified as an upper-middle income approximately 3.3 percent of the country’s GDP (USD country. The services sector accounts for about 72 1.6 billion).17 percent of Saint Lucia’s GDP, followed by the industrial sector at around 12 percent and the agricultural sector at close to 2 percent.10 The substantial dependence of the economy on tourism has made Saint Lucia highly vulnerable to factors outside of the country’s control. In 2018 and 2019, Saint Lucia’s real GDP grew at 2.6 percent and 1.7 percent, respectively. However, after the onset of the Covid-19 pandemic in 2020, real GDP fell by around 20 percent, its largest decline since 1980. This decline was mainly the result of a sharp reduction in tourism, which accounts for around 41 percent 11 of GDP, as international travel practically came to Photo: Simone D. McCourtie / World Bankk a halt over fears of the spread of the Covid-19 virus. During the pandemic, an estimated 45 percent of the The average annual price of OPEC crude oil rose from population stopped working.12 With the contraction about USD 42 per barrel in 2020 to USD100 per barrel in of GDP, public debt rose to about 87 percent of GDP, 2022.18 The value of imports of mineral fuels, lubricants after hovering around 60 percent in previous years.13 and related materials in 2022 increased to USD 546.1 million, representing 24.3 percent of total imports, higher than the average of 18.9 percent in the period Macroeconomic Impact of the 2015 to 2019 (Economic and Social Review, 2022). Given a Energy Sector predominantly oil-based power system, electricity prices are high, ranging from USD 0.28-0.33/kWh. In addition Saint Lucia depends on imported petroleum products to placing a heavy financial burden on households, high for over 90 percent of its energy supply. The share electricity prices can impede Saint Lucia’s competitiveness of GDP absorbed by the cost of oil imports has been and growth. More than 55 percent of companies in Saint volatile since 2006, reaching as high as the equivalent Lucia have identified high electricity prices as a constraint of 23 percent of GDP.14 to doing business in the country.19 Saint Lucia | National Energy Policy 9 Overview of the Energy Sector Saint Lucia’s primary energy supply amounts to about The transport sector is the largest consumer of 8,000 terajoules (TJ), of which 92 percent comes from petroleum products and the electricity sector is the imported oil and 8 percent comes from renewable second largest.22 Saint Lucia’s considerable renewable energy sources.20 Per capita energy use is estimated energy potential will support the country’s transition at about 1,936 kWh. 21 Total installed capacity for away from its current high dependence on fossil fuels. electricity generation in Saint Lucia is 93.1 MW. About As shown in Table 1, the country’s estimated total 95 percent of this capacity consists of fossil fuel- renewable energy potential for power generation is generating units operated by the national power utility, 769.2 MW,23 most of which is geothermal (680 MW). St. Lucia Electricity Services, Limited (LUCELEC). The However, the potential of solar and wind in power remaining five percent of installed generating capacity generation is also substantial, at 36 MW and 42 MW, uses solar energy. respectively. � TABLE 1: SAINT LUCIA’S ESTIMATED RENEWABLE ENERGY POTENTIAL FOR POWER GENERATION RENEWABLE ENERGY SOURCE MW Geothermal 680.0 Wind 42.0 Solar 36.0 Biomass/Waste 11.2 Total 769.2 Source: Caribbean Centre for Renewable Energy & Energy Efficiency (CCREEE), Saint Lucia 2021 Energy Report Card. The Electricity Sector Saint Lucia Electricity Services, Limited (LUCELEC) has an exclusive license to generate electricity from fossil fuels, as well as transmit, distribute, and sell electricity. The formation of LUCELEC, in 1964, unified and centrally managed numerous small power generators. In the 1970s, the company faced rapidly rising demand for power to meet the needs of the growing hotel industry and banana plantations, sectors that were spurring economic growth. Electricity demand grew by an average of 30 percent in this decade, requiring Photo: St. Lucia Electricity Services, Limited a doubling of power generating capacity every three years. In the 1980s, facing rapidly developing technology, In 2022, LUCELEC’S installed capacity of fossil fuel-based the company recognized the need for better trained generation reached 88.4 MW, and peak demand was staff and initiated a craft apprenticeship program. In 61.88 MW. Annual electricity generation is 409 TWh. 1990, LUCELEC commissioned a new generation and LUCELEC opened a 3-MW solar farm in 2018, which transmission system, which raised overall operational generated 6.6 TWh in 2022, avoiding the use of 340,000 standards. The electricity sector accounts for 39 percent imperial gallons of diesel oil, resulting in cost savings of total petroleum consumption in Saint Lucia.24 equivalent to USD 1.43 million. Saint Lucia | National Energy Policy 10 The Transport Sector Residential and Commercial Sectors The transport sector has grown steadily in recent years, The commercial sector is the largest consumer of mainly as a result of increased imports of used vehicles electricity, using an estimated 48 percent, followed by for private use. This sector is the largest consumer of the residential sector at 37 percent. Electricity is mainly petroleum products in Saint Lucia, accounting for 54 used for lighting and powering equipment; however, percent of fossil fuel consumption in road, air and most people use LPG-fuelled stoves for cooking. 27 marine transport. Road transport alone accounts for about 38 percent of fossil fuel consumption. Saint Lucia has approximately 84,00025 registered vehicles.26 The GHG Emissions cars account for 61 percent; sport utility vehicles (SUVs): Table 2 shows Saint Lucia’s GHG emissions inventory for 20 percent; trucks 13 percent; and buses 2 percent. The 2021. Carbon dioxide accounts for about 99 percent of remaining four percent consists of motorcycles, tractor all GHG emissions. The energy and road transportation trailers, and construction vehicles. Saint Lucia has at sectors are the largest emitters of carbon dioxide. These least 400 electric cars and hybrid vehicles, accounting sectors combined account for 77 percent of the total. for less than one percent of all vehicles. � TABLE 2: SAINT LUCIA’S GHG INVENTORY (2021) IN GIGAGRAMS OF CO2 EQUIVALENT CARBON NITROUS SECTOR METHANE TOTAL DIOXIDE OXIDE Energy 249.4 0.22 0.65 250.27 Manufacturing Industries and 12.5 0.02 0.05 11.57 Construction Civil Aviation (Domestic) 5.1 0 0.04 5.14 Road Transportation 245.1 1.33 2 248.43 Navigation 3.6 0.01 0.03 3.64 Commercial/Institutional 5.3 0.01 0 5.31 Residential 19.5 3.9 0.72 24.12 Agriculture/Forestry/Fishing 6.6 0.01 0.02 6.63 Marine International Bunker 3.6 NA NA 3.60 Aviation International Bunker 90.0 0 0 90.00 Total 639.7 5.5 3.51 648.71 Source: CCREEE, Saint Lucia’s Energy Report Card for 2021. Saint Lucia | National Energy Policy 11 SAINT LUCIA NATIONAL ENERGY POLICY (2023–30) Global Context of the Energy Transition Saint Lucia | National Energy Policy 12 GLOBAL CONTEXT OF THE ENERGY TRANSITION Climate Change Concerns Climate change resulting from carbon emissions is a The price declined from an annual average of USD 61.4/ global concern and the use of non-renewable fossil barrel in 2019 to an average of USD 41.3/per barrel in fuels in the energy sector is a major source of carbon 2020. But in 2021, the oil price rebounded to USD 69.1/ emissions.28 The transition away from an energy mix per barrel, slightly higher than in 2019. Following the based primarily on fossil fuels has become the pillar escalation of the conflict in Ukraine in early in 2022, of mitigation initiatives at the international level. This the annual average oil price for that year soared to trend is particularly relevant for Saint Lucia as a Small USD 97.1/barrel. The monthly average for May, 2023, Island Developing State (SIDS), given its vulnerability the most recent available, is USD 74.1/barrel. to climate change consequences like rising sea levels and the increase in extreme weather events. Saint A publication of the International Energy Agency Lucia is also vulnerable to the volatility of prices in the (IEA), Oil 2023,29 reporting on the outlook for global international oil market. oil supply to 2028, has placed energy security at the forefront of energy policy, creating a strong incentive for governments to pursue a “low emissions future” The Impact of Volatile International in the energy sector. Many governments seem to be Oil Prices responding to this call; in recent years, investment in clean energy appears to be accelerating faster than According to World Bank commodity price data, the investment in fossil fuels. average international oil price fluctuated markedly between 2019 and the first half of 2023 (Figure 2). � FIGURE 2: AVERAGE INTERNATIONAL OIL PRICE, 2019-2023 (IN USD/BARREL) Source: World Bank Commodity Price Data. (Annual averages for 2019-2022 and for 2023, the monthly average for May). Saint Lucia | National Energy Policy 13 The Paris Agreement Sustainable Development Goals Saint Lucia became a signatory to the United Nations (SDGS) of the United Nations Framework Convention on Climate Change (UNFCCC) The NEP supports a subset of the 17 SDGs shown below in 1993, and ratified the Paris Agreement in 2016. The (Figure 3), most notably: climate action, affordable country’s first Nationally Determined Contribution and clean energy, sustainable cities and communities, (NDC) set a reduction target of 16 percent against industry, innovation and infrastructure, and responsible the Business as Usual (BAU) emissions projections consumption and production. by 2025 and a 23 percent reduction by 2030. Saint Lucia’s Partnership Plan for Nationally Determined ICONS Contributions to emissions reduction (NDCPP) was ICONS 40 approved by the Cabinet in 2019. � FIGURE 3: COLOUR 17 ICONS: SUSTAINABLE VERSION DEVELOPMENT GOALS OF THE UNITED NATIONS. Source: When an icon is United on a square, that Nations Departmentsquare must ofbe proportional Economic1 x 1.and Social Affairs, Sustainable Development, The 17 Goals. The white icon should be contained by its defined colour, or black background. Do not alter the colours of the SDG icons. Financing the Energy Transition In January 2018, the United Nations launched a revised design of Icon 10, as seen on this page The availability of financing for energy transition is of These institutions include the World Bank, the Inter- paramount importance, as the creation of more resilient American Development Bank (IBD), the Development energy systems will require capital-intensive projects to Bank of Latin America (CAF), and the Caribbean develop and deploy clean-energy technologies: primary Development Bank (CDB). renewable energy, electric vehicles, energy-efficiency measures, and hydrogen technologies. Carbon markets, trading systems in which companies or individuals compensate for the GHG emissions by Global financial flows towards decarbonised energy purchasing credits from entities that reduce or remove transition totalled USD 501 billion in 2020, and lending their carbon emissions, recorded a notional value of for sustainable development reached USD 321.4 billion emissions traded amounting to more than USD 1 in the first half of 2021,30 setting an all-time record for billion in 2021. These markets are expected to continue such financial flows. The main international financial expanding, with an increase in the price of CO2eq per institutions have affirmed their commitment to “green ton over the next ten years, as offsetting obligations finance”31 for developing countries. becomes more stringent globally.32 Saint Lucia | National Energy Policy 14 SAINT LUCIA NATIONAL ENERGY POLICY (2023–30) Introduction to the Policy Saint Lucia | National Energy Policy 15 INTRODUCTION TO THE POLICY Energy Vision for 2030 Goals, Objectives and Actions Saint Lucia’s National Energy Policy (NEP) provides a Supporting the Energy Vision path to attaining the vision of the energy sector by 2030: Based on the aforementioned core values, Figure 4 a modern energy sector based on cost minimization, provides a schematic overview of the NEP strategy energy security, and local enfranchisement. This will to improve the country’s energy sector by 2030. The require a sustained transition from an economy that strategy is built around the following seven goals: is highly dependent on imported fossil fuels to a substantially decarbonised economy by 2030. ▶ Ensure a secure, reliable, affordable, transparent, greener, and Energy efficiency across all end-use sectors and increased resilient electricity sector. substitution of renewable energy resources for fossil ▶ Decarbonise thermal applications. fuels will help achieve this decarbonisation, with a focus on 30 objectives supported by 145 actions (NEP). ▶ Make reduction of energy intensity a key driver for decarbonisation. Renewable energy sources, which account for less than ▶ Decarbonise the transport sector. 10 percent of primary energy supply for electricity production, will gain a more prominent role, increasing ▶ Ensure a safe, reliable, and affordable supply to around 50 percent of primary energy supply in the of petroleum products and their efficient power sector by 2030, in line with the goals of the NEP. and environmentally safe storage, handling and use during the transition phase. The NEP puts energy sector resilience at the centre ▶ Ensure that human, technical, and of energy planning. In addition to making Saint institutional capacities are aligned with Lucia less vulnerable to international oil price rises, the needs of the energy sector and decarbonisation will help the country meet its NDC objectives of the policy by integrating for GHG reduction, in line with its Paris Agreement social and gender aspects in the obligations. Decreased vulnerability to the rises in oil development of the energy sector. prices will help keep energy affordable for households and allow businesses to remain competitive. ▶ Facilitate access to renewable energy and energy-efficiency measures. Core Values The foundation of the NEP is a set of 12 core values, (Figure 4), which can be divided into three main categories: (i) improved energy demand and supply management, (ii) institutional strengthening, and (iii) human resource development. Saint Lucia | National Energy Policy 16 � FIGURE 4: CORE VALUES REFLECTED IN SAINT LUCIA’S NEP Improved Energy Demand Institutional Human Resource and Supply Management Strengthening Development Reliability, resiliency, and Transparency and consistency Education, public awareness, affordability of energy services. in legal and regulatory and capacity-building. frameworks. Efficiency in production and Maximum level of collaboration Promotion of investments with a consumption of energy in all and coordination across sector high level of local participation. sectors. authorities. Security of energy supply A multidisciplinary and cross- by reducing dependency on cutting sector approach. imported fossil fuels. Maximum development of Regulatory and price stability renewable energy sources in within the sector. all sectors. Systematic development of energy infrastructure prioritising the use of renewable energy sources. Environmental and social protection. Photo: Simone D. McCourtie / World Bankk Saint Lucia | National Energy Policy 17 � FIGURE 5: SEVEN GOALS SUPPORTING SAINT LUCIA’S ENERGY VISION FOR 2030 SAINT LUCIA’S ENERGY VISION FOR 2030 A modern, sustainable, energy sector based on cost minimisation, local enfranchisement, and energy security. Supporting Ensure a secure, reliable, affordable, transparent, greener, Objectives 5 GOAL 1 and resilient energy sector. Related Actions 33 Supporting Objectives 4 Decarbonise thermal applications. GOAL 2 Related Actions 15 Supporting Make reduction in energy intensity a key driver Objectives 10 GOAL 3 of decarbonisation. Related Actions 49 Supporting Objectives 3 Decarbonise the transport sector. GOAL 4 Related Actions 20 Supporting Ensure a safe, reliable, transparent, and affordable supply of Objectives 2 petroleum products along with their efficient, environmentally GOAL 5 safe storage, handling and use during the transition phase. Related Actions 8 Ensure that human, technical, and institutional capacities are Supporting aligned with the needs of the energy sector and objectives of Objectives 4 GOAL 6 the national energy policy by integrating social and gender aspects in the development of the sector. Related Actions 15 Supporting Facilitate access to funding for renewable energy and Objectives 2 GOAL 7 energy-efficiency (EE) measures. Related Actions 5 Saint Lucia | National Energy Policy 18 SAINT LUCIA NATIONAL ENERGY POLICY (2023–30) Goals and Objectives Saint Lucia | National Energy Policy 19 POLICY GOALS AND OBJECTIVES Ensure a secure, reliable, affordable, transparent, greener, GOAL 1: and resilient energy sector OBJECTIVE 1 Meet the target of 50% penetration of renewable energy in the electricity mix by 2030. Establish a consistent and stable legal framework that enhances predictability in the OBJECTIVE 2 energy sector and fosters investments in renewable energy. OBJECTIVE 3 Ensure a stable, predictable and consistent institutional framework. OBJECTIVE 4 Reduce the environmental impact of electricity production and distribution. OBJECTIVE 5 Integrate resilience considerations into energy planning. Objective 1: Meet the target of 50 percent In addition, the development of distributed energy penetration of renewable energy sources in resources (DERs), such as rooftop solar energy, will be the electricity mix by 2030. promoted, to be installed by individual customers of the power utility, businesses or municipalities, in order The path to Saint Lucia’s planned energy transition to help reduce electricity bills and the amount of power requires massive deployment of an applicable set of generated by fossil fuels. proven clean-energy technologies, taking advantage of the country’s full renewable energy potential, Integrating such large amounts of variable renewable particularly solar, wind, and geothermal resources. energy into the network will require measures to ensure grid stability and enhanced resilience of the This will help align the country’s energy sector devel- system. An appropriate mix of technologies needs to be opment with its nationally determined contributions carefully identified and the inclusion of grid-tied energy (NDCs), under the Paris Agreement. Decreasing the storage systems—battery energy storage systems (BESS), current heavy reliance on imported petroleum products or other types of feasible energy storage—should be will make Saint Lucia’s power supply more resilient and central to the overall system. reliable. When installed, this renewable energy capacity is also expected to help mitigate and resolve potential These measures will help compensate for the variability service disruptions. of renewable energy generation, providing support to the grid at peak hours (often off-solar hours), and To achieve this, the NEP has established a target of 50 contribute to the quality and reliability the system. percent penetration of renewable energy sources in the electricity matrix by 2030. Renewable electricity To facilitate investments in renewable energy projects, capacity in Saint Lucia will be developed on-grid at Saint Lucia will develop an appropriate fiscal structure, utility scale, managed by LUCELEC, and by independent primary and secondary legislation, and technical power producers (IPPs). capacity-building programmes to promote the participation of local developers and empower them as active players in the transition. Saint Lucia | National Energy Policy 20 Objective 2: Establish a consistent and implementation need to be properly and consistently stable legal framework that enhances assigned, preferably within a single authority, in order predictability in the sector and fosters to facilitate coordination to a progressive reduction of fossil fuels and integration of more renewable energy. investments in renewable energy. The Ministry of Sustainable Development, Energy, The electricity sector is currently governed by the Science and Technology will be assigned the planning Electricity Supply Act, which entered into force in 1994 function, which will also encompass markets for and was amended in 2016, and the National Utilities electricity and oil, as well gas, should a gas market Regulatory Commission Act (the NURC Act) of 2016. be developed. A new bill establishing the legal and The amendments to the Electricity Supply Act have institutional frameworks for the petroleum sector limited the monopoly of LUCELEC in renewable energy will be submitted to Parliament in the near future. generation, opening up generation to other suppliers. However, no major changes are expected. However, these amendments have not established the related licensing and market entry requirements, The National Utilities Regulatory Commission (NURC) including procurement, applicable to independent is the legislated regulator of electricity supply services power producers (IPPs), and self-generators who wish in Saint Lucia. This commission is responsible for to obtain a licence to generate power from renewable addressing consumer complaints and granting licenses energy sources. for generating, transmitting, and distributing electricity as prescribed by the NURC Act of 2016. The NURC serves The absence of an appropriate legal framework for as a guarantor of transparency of operations in the the electricity sector and for the renewable energy electricity sector. subsector, is a challenge for renewable energy projects and related decarbonisation of the energy sector. This legislative gap has a direct impact on investments and Objective 4: Reduce the environmental on the country´s ability to replace imported fossil fuels impact of electricity generation and with locally-generated renewable energy, ultimately distribution. impacting energy supply security and resilience. Burning fossil fuels results in the release of harmful A draft revised Electricity Act has been prepared gases into the atmosphere, with negative impacts on to address and solve this problem; it is expected to the environment. Carbon dioxide, sulphur dioxide, and be finalised and sent to Parliament for discussion nitrogen oxide, from the combustion of fossil fuels, are and enactment by December 2023. The regulations contributors to increased GHG emissions, leading to necessary to implement the new Act, many of which poor air and water quality. have already been prepared, will likely be approved at the same time. The Geothermal Resources Development Greener energy technologies, for example, using Bill, an important milestone for the development renewable energy instead of fossil fuels in power of geothermal energy, drafted in 2011, will also be generation, or using fossil fuels with a lower sulphur finalised and sent to Parliament in 2025 for enactment. content, will help reduce pollution during the transition to energy sector decarbonisation. Objective 3: Ensure a stable, predictable and Batteries needed to store the energy from greener consistent institutional framework. technologies need to be carefully handled according to a dedicated waste management plan. Safe storage, The transition to a decarbonised and resilient energy disposal of oil, decommissioning of existing generation sector requires appropriate resource planning as well as and distribution assets associated with the use of fossil adoption and implementation of a comprehensive cross- fuels also need meticulous care and disposal. Sound sector policy. Within this framework, the functions and environmental standards governing these, and other roles of authorities and stakeholders involved in policy environmental considerations will be adopted. Saint Lucia | National Energy Policy 21 Objective 5: Integrate resilience Resilience focuses on preparing for, absorbing, considerations into energy planning. adapting to, and recovering from low-probability, high-consequence disruptive events. Saint Lucia’s location in the hurricane zone of the Caribbean makes it vulnerable to extreme weather It is, therefore, necessary to integrate resilience events, more recently exacerbated by climate change. considerations into energy planning as well as Devastating hurricanes and floods have caused human operational protocols and processes in the energy losses and destroyed infrastructure in many Caribbean sector. Resilience planning should also focus on the islands. Based on current climate projections, the need for cybersecurity analysis, especially for the Caribbean region is anticipated to face increased protection of the national grid in the event of cyber- extreme weather events, threatening critical life-line attacks. Accompanying legislation to this effect must infrastructure, including energy systems. be established. GOAL 2: Decarbonise thermal applications OBJECTIVE 1 Promote installation of solar water heaters. OBJECTIVE 2 Promote the use of innovative thermal applications in residential and commercial sectors. OBJECTIVE 3 Promote the use of efficient cooking technologies. OBJECTIVE 4 Promote the use of innovative thermal applications in the industrial and tourism sectors. The provision of thermal energy for day-to-day activities, The involvement of more local entities in the assembly such as water heating, air conditioning and cooking is and installation of SWH will contribute to the a major use of energy for households and industry. overall improvement of the economy through skill Harnessing the power of the sun in applications other enhancement and job creation. than electricity generation, such as solar water heating, is a goal that Saint Lucia is also pursuing as part of the The NEP will include measures to incentivise the impor- envisaged energy transition. tation of SWH equipment. These measures, in addition to a reduction in the import duty for this equipment, include a proper assessment of training and standard- Objective 1: Promote the installation of solar isation needs, the implementation of public aware- water heaters. ness campaigns, and the establishment of targets for SWH installation applicable to governmental buildings, Solar water heating (SWH) is a proven and affordable hospitals, schools, etc. These users will be leaders in technology, the simplest and most efficient way to demonstrating the viability of the SWH technology. provide hot water to residential, commercial and government buildings. Its expanded use will contribute to reducing electricity consumption, by using the sun’s thermal energy to directly heat water, instead of a hot water tank powered by electricity. SWH is both sustainable and cost effective. Saint Lucia | National Energy Policy 22 Objective 2: Promote the use of innovative Objective 4: Promote the use of innovative thermal applications in the residential and thermal applications in industrial and commercial sectors. tourism sectors. Alternative energy sources to meet thermal demand Decarbonisation requires a cross-sectoral approach to needed in the residential and commercial sectors should identify technologies most suitable to each economic be further explored and promoted. These sources could sector and to assess the extent to which advances in include solar-assisted, air-conditioning systems, based each sector will help attain decarbonisation goals. The on absorption, or conventional compression systems industrial and the tourism sectors, which are major powered by solar photovoltaic panels. contributors to the economy, will receive particular attention. Sustainable tourism will be promoted to Promoting the use of innovative thermal applications market Saint Lucia as a green destination, as tourists can have multiple benefits for Saint Lucia given the become more environmentally aware and appreciative expected potential for large-scale exploitation of of environmentally conscious tourism opportunities. renewable energy. These benefits include improving the country’s energy resilience, further developing the Solar thermal systems can satisfy a large demand for private sector, and incentivising consumers to invest in heat in industrial and agricultural processes, comple- applications that will allow them to reduce their energy menting energy-efficiency measures as part of a decar- consumption. bonisation strategy. These systems can provide heating, hot water, and steam for curing, drying, washing, boil- In addition to existing renewable technologies, con- ing, pasteurisation and sterilisation in the agriculture, sidered economically viable in Saint Lucia, emerging textile, hospitality and food processing industries. technologies such as those for geothermal, tidal, and ocean thermal energy could also assist with the country’s energy transition. Feasibility of these tech- nologies could be further developed during the NEP’s implementation period (2023 to 2030). Objective 3: Promote the use of efficient cooking technologies. Saint Lucia relies heavily on the use of liquefied petroleum gas (LPG) for cooking. The replacement of LPG-fuelled kitchen stoves by energy-efficient, electric Photo: St. Lucia Electricity Services, Limited stoves will support the decarbonisation process of the electricity sector and will help reduce dependency on Saint Lucia’s energy intensity of 3.51 BTU/ USD$ is well imported fossil fuels. below the weighted average for CARICOM countries. However, the ability to decrease electricity consumption Substituting electricity for LPG in cooking will be by energy-efficiency improvements to buildings or combined with more efficient cooking technologies the use of more efficient appliances can add value to in order to address the financial needs of vulnerable the island’s competitive advantage and increase the sectors of the population. Increased usage of electric resilience of a power system, while lessening the adverse stoves on the electricity grid must also be factored impact of the energy sector on the environment. into electricity planning given the potential increase in electricity demand, requiring reinforcements in local The NEP incorporates these energy-efficiency measures, grids. The use of biogas from agriculture or waste will helping to enhance the energy sector’s sustainability also be explored as an option for decarbonising cooking. on the demand side and on the supply side. Saint Lucia | National Energy Policy 23 GOAL 3: Make reduction in energy intensity a key driver of decarbonisation OBJECTIVE 1 Define and approve energy-efficiency targets. OBJECTIVE 2 Demonstrate government leadership in energy-efficiency measures. OBJECTIVE 3 Ensure that appliances are as energy efficient as possible. Reduce or eliminate soft barriers to the uptake of energy conservation OBJECTIVE 4 and efficiency projects. OBJECTIVE 5 Promote the use of energy-efficient technologies in water production. OBJECTIVE 6 Ensure that energy-efficiency is incentivised through the correct tariff mechanism. OBJECTIVE 7 Reduce the fuel consumption of vehicles with internal combustion engines. OBJECTIVE 8 Retrofit existing buildings for energy-efficiency enhancement. OBJECTIVE 9 Apply energy-efficiency measures in new buildings. Develop a suitable, effective regulatory and institutional framework to ensure timely, OBJECTIVE 10 systematic implementation of energy-efficiency measures. Objective 1: Define and approve energy- The ministry with responsibility for the energy sector efficiency targets. must inform, educate, and promote energy-efficiency policies throughout Saint Lucia’s society. The Govern- There are significant opportunities for improving ment will take a leading role in the implementation of energy efficiency in all sectors of Saint Lucia’s economy: proposed energy-efficiency plans to take the following tourism, healthcare, building construction, transport, actions to promote sustainable generation of energy:33 industry, electricity generation, and manufacturing. Such improvements require adoption of corresponding ▶ A 20 percent reduction of energy energy-efficiency targets and implementation of a consumption in schools, by 2030. monitoring mechanism to ensure their achievement. ▶ Replacement of 30 percent of the Therefore, new energy-efficiency targets aligned with government transport fleet with international standards will be established to reduce electric vehicles, by 2030. the energy intensity of the country and, consequently, ▶ Energy audits of government-occupied its dependence on imported fossil fuels. buildings, including schools, by 2025. ▶ Lighting retrofits in all government- Objective 2: Demonstrate government occupied buildings. leadership in energy-efficiency measures. ▶ Installation of 400 kW of solar- Broad-based adoption of energy-efficiency measures PV systems in schools, averaging will be a critical element in the development of a about 10 kW across 40 schools. sustainable energy sector. Saint Lucia | National Energy Policy 24 Objective 3: Ensure that appliances are Objective 5: Promote the use of energy- as energy efficient as possible. efficient technologies in water treatment and production. The NEP will take the following measures to promote the use of efficient appliances and other The NEP will address the need for energy-efficient electrical equipment: practices in the production of clean water and ▶ Energy use in buildings: retrofitting building prospects for renewable energy use in collaboration appliances, replacing fluorescent bulbs with with agencies managing Saint Lucia’s water sector. LED lights, installing solar water heaters, etc. Solar-powered systems offer a route to inexpensive water treatments and will help improve resilience in ▶ Electricity generation and distribution: the water sector. Desalination of water at utility scale using more efficient equipment, such as will also be explored. variable frequency pumps, breakers with timers, waste-heat recovery, etc. These technologies can increase energy efficiency Objective 6: Ensure that energy efficiency of power generation from the current level is incentivised through the correct of about 40 percent (in conventional fossil- tariff mechanism. fuel fired power plants) to up to 80 percent. Applying economically efficient rates consistent with ▶ Energy-efficiency labelling of appliances: long-term costs incurred by energy providers is essential In order to ensure that appliances comply for the deployment of renewable energy technologies with the latest energy efficiency and and storage systems. At the same time, the NEP, international environmental standards, together with the regulatory authority, will evaluate requirements for labelling energy use of the cost of energy products to the various end-use imported appliances will be strengthened. sectors, to ensure that while supporting the energy transition, they do not place an excessive financial Objective 4: Reduce or eliminate burden on residential consumers and that they allow soft barriers to the uptake of energy businesses to stay competitive. conservation and efficiency projects. The current tariff scheme, with a single component Implementing energy-efficiency measures will require based on energy consumption, promotes inefficient elimination of soft barriers, such as the lack of energy use and could have negative consequences for appropriate information or qualified personnel, as energy sustainability in Saint Lucia. It also undermines well as the absence of adequate economic incentives. potential competition from alternative supply options The general public must perceive the substantial and weakens the finances of energy providers by benefits of efficient energy use to the economy and the hampering full cost recovery for services provided. environment. A public education program explaining Without an appropriate tariff mechanism, an increasing these benefits will therefore, be critical to success. number of distributed solar-PV (DPV) systems may impede a utility from meeting its fixed costs. Demand-side management is the modification of consumer energy use through education and To remove the negative aspects of the current behavioural change. Energy-efficiency measures and tariff regime, new energy tariffs will be developed financing incentives, such as utility tariff restructuring in collaboration with the NURC, setting prices that (e.g., time-of-day tariffs or incentivising the use will incentivise energy efficiency, allowing cost of batteries) will help shift energy demand to off- recovery and a fair financial return to utilities, while peak hours or reduce peak load and use the stored remaining affordable for consumers and encouraging energy from renewable energy sources at certain entrepreneurship. The current subsidy structure in the times of the day. tariff regime and the proposed measures to incentivise the electrification of the economy will be revised to protect the welfare of low-income consumers. Saint Lucia | National Energy Policy 25 Objective 7: Reduce the fuel consumption of Saint Lucia has already adopted standards for light- vehicles with internal combustion engines. emitting diode (LED) and compact fluorescent light (CFL) bulbs, air-conditioning units, refrigerators, etc. The road transport sector accounts for about 38 percent Retrofitting existing buildings using these standards of petroleum consumption in Saint Lucia based on the and the adopted CARICOM Regional Energy Efficiency country’s most recent available energy balance (2018). Building Code (CREEBC) will be promoted. The share of hybrid/electric vehicles remains negligible, while the number of vehicles with internal combustion Objective 9: Apply energy-efficiency engines (ICEs) is increasing. Saint Lucia´s Biennial Update Report to the United Nations Framework Convention measures in new buildings. on Climate Change of 2021 (BUR) states that, in 2018, New construction projects provide the opportunity there were twice as many vehicles as there were in to incorporate from inception or planning, the most 2000, and that “… the official databases do not contain recent energy-efficient designs, modern technologies, accurate information on vehicles taken off the roads and eco-friendly materials. due to accidents, obsolescence, and other factors, nor do they reflect the number of unlicensed vehicles.” This As indicated above, Saint Lucia has adopted the deficiency will be addressed through the development CREEBC, which sets guidelines for its member states, and implementation of a novel transport policy. establishing minimum energy-efficiency requirements for the building envelope, aligned with the mechanical, There are multiple ways to promote greater energy lighting, and water-heating systems present in the efficiency in the transport sector, including: (i) definition tropical climate zone. of efficiency standards; (ii) promotion of import, trade, and use of vehicles that comply with these standards; The Government of Saint Lucia, through the Planning (iii) the adoption of a mandatory labelling system to Division and the Saint Lucia Bureau of Standards, provide reliable information on fuel consumption; intends to transition from voluntary to mandatory and (iv) sustainable driving awareness campaigns. standards for energy efficiency. Obligatory vehicle inspections and the establishment of minimum standards to pass these inspections will be Objective 10: Develop a suitable, effective enhanced through regulation to ensure that vehicles regulatory and institutional framework meet specific minimum energy-efficiency standards. to ensure the timely, systematic implementation of energy-efficiency Objective 8: Retrofit existing buildings for measures. energy-efficiency enhancement. Reducing the energy intensity of Saint Lucia’s economy Existing buildings may require upgrades to improve will require legislative measures along with appointed their energy efficiency for a variety of reasons: an agencies capable of monitoring and enforcing inadequate thermal envelope,34 inefficient cooling standards. The Energy Efficiency Bill was drafted in 2015 systems, non-solar PV-based hot water systems, old but has not yet been presented for public consultation. electrical installations, incandescent and fluorescent This draft will be revised, consulted upon, and finalized bulbs, the lack of smart appliances, or outdated before being sent to Parliament for enactment. The electrical cabling, all of which may contribute to high bill will define functions for agencies responsible for electricity costs. adopting and implementing energy-efficiency measures and related training for staff. The NEP will focus on building capacity for energy efficiency and conducting standardised energy audits geared towards understanding energy usage in government-owned and occupied buildings, while identifying opportunities to improve energy efficiency and the comfort of tenants. Saint Lucia | National Energy Policy 26 GOAL 4: Decarbonise the transport sector OBJECTIVE 1 Promote the use of alternative fuels where feasible. OBJECTIVE 2 Minimise the time use of vehicles. Encourage the adoption of a greater percentage of electric vehicles and hybrids OBJECTIVE 3 in the national vehicle fleet and establish a framework for the development of sustainable road transport. Saint Lucia is planning a shift to a greener transport Objective 2: Minimise the time use sector by improving the efficiency of vehicles running of vehicles. on fossil fuels in the short term, and encouraging, over the long term, the switch to electric vehicles in the Considerable quantities of fuel are wasted during traffic public and private sectors. congestion. A congestion analysis and the introduction of mechanisms to reduce congestion are therefore critical to diminishing the intensity of fossil-fuel use Objective 1: Promote the use of alternative in the transport sector. The use of public transport, fuels where feasible. in addition to reducing the fossil fuel consumption Harnessing the potential to develop alternative of individual vehicles, cuts traffic congestion and, fuels for powering motor vehicles, such as biodiesel consequently, air pollution. At the same time, the use or bioethanol made from local biomass, or green of single-person automobiles should be limited and hydrogen, obtained from splitting water into hydrogen carpooling options should be encouraged through and oxygen using renewable energy, will strengthen the related public education campaigns and incentives. transport sector’s energy resilience while reducing its Promoting public transport may require improvements carbon emissions, in line with Saint Lucia’s NDC targets. to transport infrastructure, area coverage, and Resource availability and economic feasibility of timetables as well as the provision of economic producing biofuels in the country will need to be incentives. These improvements and incentives evaluated, based on crop availability and the scale should be supplemented with educational campaigns of the potential operation. The evaluation may also to increase public awareness of the benefits to extend to the analysis of Sargassum seaweed as a minimizing the use of individual vehicles that run on potential substrate for the production of biofuels. fossil fuels, given that the culture of the car35 could prove to be a major barrier to widespread adoption Legislation for the production of biofuels will be of public transport. aligned to the objectives of promoting alternative fuels that can be locally developed. It will also tie in In addition to the promotion of public transport, with the legal framework required to support fuel bicycles and energy-charged, single-person transport diversification in a safe and sustainable way, respectful that is not fossil-fuel intensive, such as e-scooters, of the environment and the health of Saint Lucians. e-bikes, or e-motorbikes, should be encouraged. Small, single-person transport using electricity will become even more advantageous as the electricity sector increasingly substitutes renewable energy for fossil fuels in power generation. Saint Lucia | National Energy Policy 27 Objective 3: Encourage the adoption of a Furthermore, in 2018, 15 automotive technicians were greater percentage of electric and hybrid trained in the operation of electric and hybrid vehicles vehicles in the national fleet and establish by the Institute of the Motor Industry in the U.K. There are plans to continue with capacity-building for the use a framework for the development of of these new technologies. sustainable road transport. Also in 2018, the Government of Saint Lucia completed The Biennial Update Report (BUR) of the United its Fleet Transition Study, which analysed the possibility Nations Framework Convention on Climate Change of transitioning from ICE vehicles to electric vehicles. (UNFCC), has established targets for penetration of A pilot project to analyse a variety of technologies electric vehicles in Saint Lucia’s vehicle fleet by 2030. for this transition has been designed. The study The achievement of these targets will require incentives has recommended the replacement of 131 existing for the purchase of electric/hybrid vehicles and related conventional vehicles in the Government´s fleet with public awareness campaigns. electric vehicles. New targets for the share of electric The targets for electric vehicles in the transport sector vehicles in the government transport fleet and in public by 2030 are: 33 percent share of all private vehicle sales, and private transport will be established by 2025. 30 percent of the government vehicle fleet, and 10 In 2014, the Government introduced tax incentives to percent of the public transport and taxi fleet. encourage the purchase and use of hybrid vehicles as The Government has already adopted some measures well as vehicles that allow operation on sustainable supporting the switch to electric vehicles in cooperation fuels, and will study the need for additional incentives. with international institutions. These include the The Government will adopt a new transport policy installation of a solar carport adjacent to the building by 2025. This policy will address electrical mobility, of the Ministry of Infrastructure and the purchase of including the identification of options for infrastructure three electric vehicles for demonstration purposes, and charging stations (on-grid and off-grid), entities to promote the use of electric vehicles on the island. that might be authorised to operate electricity LUCELEC has also ventured into this initiative, with recharging stations, and the corresponding legal, the installation of additional charging stations for institutional, and regulatory frameworks necessary electric vehicles throughout the island, and strategies for the policy’s implementation. for expansion. Ensure a safe, reliable, and affordable supply of petroleum products along GOAL 5: with their efficient, environmentally safe storage, handling, and use during the transition phase OBJECTIVE 1 Foster a resilient and transparent supply of oil products. OBJECTIVE 2 Ensure that oil supply meets the required environmental criteria. The value of petroleum products imported into Saint period to a larger share of renewable energy in Saint Lucia during 2020 accounted for 4.81 percent of the Lucia’s energy mix, security of supply as well as safety country’s GDP. Phasing out the use of petroleum and environmental protection in the use of these products will take many years and during the transition products will continue to be a major concern. Saint Lucia | National Energy Policy 28 Objective 1: Foster a resilient and Objective 2: Ensure that oil supply meets the transparent supply of oil products. required environmental criteria. Procurement, handling, and storage of petroleum Petroleum products transported by ships risk spillage products, as well as local transportation, will be and related environmental disasters. Oil spills can managed in a safe, environmentally-friendly manner. devastate marine ecosystems, resulting in tremendous The level of local stock must be continuously evaluated, environmental losses, which, in addition to severely and a minimum level should be defined by an authority harming animal and plant life, ultimately can be to be established. The evaluation should address storage extremely detrimental to the tourism sector. To prevent capacity, seasonal needs, costs of new storage, and the such incidents, clear standards and protocols for the risk of supply constraints, as the economy gradually safe supply of petroleum products will be compulsory shifts away from petroleum products. Updated for all stakeholders involved in petroleum transport: regulations will be issued to ensure predictability in cargo companies, harbour authorities, environmental the supply mechanism for all stakeholders involved in entities, ship maintenance companies, and others. the petroleum subsector. Imports of petroleum products will comply with The mechanism to index local fuel prices to international environmental standards, according to international prices, including a cap on fuel prices to address best practices. Likewise, proper disaster management affordability issues, will be continuously monitored to plans will need to be defined and updated periodically. ensure its effectiveness and efficiency. An authority will be appointed to monitor compliance with mandatory environmental criteria for transport and storage of petroleum products. Ensure that human, technical and institutional capacities are aligned with the GOAL 6: needs of the energy sector and objectives of the national energy policy, by the integration of social and gender aspects in the development of the sector OBJECTIVE 1 Improve education on sustainable energy issues. Ensure that the institutions required to implement the training programmes in the Action OBJECTIVE 2 Plan have sufficient and adequately trained staff. Ensure adequate education on the content of the national energy policy so that OBJECTIVE 3 it is widely known and accepted by society. OBJECTIVE 4 Promote a gender balance in the energy sector. Objective 1: Improve education on sustainable energy issues. Measures to decarbonise Saint Lucia’s economy and Public awareness campaigns on the importance of build its resilience will require an understanding energy sustainability to the country’s future are critical of certain issues that are likely not known to the to achieving the NEP’s goals and objectives. general public. Saint Lucia | National Energy Policy 29 Objective 2: Ensure that the institutions Objective 4: Promote gender balance in the required to implement the training energy sector. programmes in the Action Plan have The capacity-building element of the NEP aims for sufficient and adequately trained staff. greater gender balance in the energy sector. All official entities implementing the NEP Action Plan in Gender imbalances in certain professions persist at the the transport sector must be coordinated, trained and global level. The restricted opportunities available to adequately staffed. Private institutions and individuals women compared to those available to men stem from involved with the NEP may also need capacity-building; a wide range of complex issues, including financial these include car dealers, mechanics, and insurance resources, educational capital, career projection based companies. Some educational campaigns have already on representation, biased perception of capability, been developed by the authorities in the transport and self-censorship. In Saint Lucia, women represent sector, e.g., training for technicians on electric and 51.3 percent36 of the population but only 22 percent hybrid vehicles. However, the Government is committed are enrolled in tertiary education.37 Only 16 percent to extending training to all entities responsible for of the seats in Saint Lucia’s national Parliament are fulfilling NEP objectives. held by women.38 Objective 3: Ensure adequate education on Because women traditionally have been less engaged the content of the national energy policy in science, technology, engineering and mathematics (STEM) than men, the share of women in the workforce so that it is widely known and accepted by of Saint Lucia’s energy sector is only 31.7 percent.39 As society. part of its capacity-building effort, the NEP will seek To ensure the involvement of civil society in the NEP’s greater representation of women in the energy sector, implementation, the Government is responsible for especially in STEM-related positions. developing and implementing plans to disseminate its content at all levels of education, including schools, universities, and training courses for public administration. Stakeholder engagement is a critical element in the effective execution of the NEP and its accompanying actions. This engagement must take place at all stages of project development in the energy sector. A participatory role in decision-making for the energy sector by all Saint Lucians is key to the NEP’s acceptance and successful implementation. Saint Lucia | National Energy Policy 30 Facilitate access to financing for renewable energy GOAL 7: and energy-efficiency measures OBJECTIVE 1 Facilitate local financing and enfranchisement for green-energy projects. OBJECTIVE 2 Facilitate access to innovative ways of financing green-energy projects. At its core, the NEP seeks to ensure that energy is The Government may also help develop a local financing affordable to all Saint Lucians, as well as promote market for green-energy projects by providing insurance entrepreneurship that will allow wealth generated to financial institutions that cannot tolerate the residual by the transition to a decarbonised economy to risk of using their own funds or multilateral funding. remain within the country as much as possible. With The latter can be used in many ways to leverage local these considerations in mind, the NEP will explore a financing capabilities and promote a local financial variety of business models and financial instruments market. Options include: (i) blending funds, (ii) for decarbonisation to provide incentives for the absorbing some risks, or (iii) syndicating green bonds. majority of Saint Lucians to participate in the energy Many bilateral and multilateral development finance transition process. institutions (DFIs) have renewed their commitments to significantly increase financing for climate-related investments in the short term and to work towards Objective 1: Facilitate local financing and making all development bank finance compatible with enfranchisement for green-energy projects. the SDGs of the United Nations in the long term. There are numerous financial instruments to support climate actions and green economic growth. Traditional debt instruments are actively used to channel most of global, climate-related finance (66 percent of total), primarily through project-level debts and balance- sheet borrowings, as well as project debt subsidisation. The second largest instrument is equity financing (29 percent). Risk management tools, such as state guarantees, represent a small share of total climate- related finance.40 Attracting private investment to Saint Lucia’s low- Photo: Simone D. McCourtie / World Bankk carbon energy path will be a major challenge given that local financing of green-energy projects has been Lending for renewable energy development is not limited. The country’s banking industry, not accustomed new to Saint Lucia. For example, the Saint Lucian to financing these types of projects, tends to overstate Development Bank offers blended financing comprised their risks. Government policies will help address of grant and loan financing for energy efficiency barriers to financing green-energy projects due to and renewable energy projects in the residential, limited knowledge, by training financial institutions in commercial, and agricultural sectors. The focus of this risk assessment and mitigation measures for investment lending is on buildings: lighting replacement, improved projects to develop renewable energy resources and cooling equipment, photovoltaic pumps, solar water improve energy efficiency. heaters, solar dryers, low-flow plumbing technology, mini hydro, wind energy, and biogas systems. Saint Lucia | National Energy Policy 31 As indigenous financial institutions gradually modify Identifying multiple beneficiaries and monetising the their lending products to facilitate green financing, benefits are at the core of innovation in financing green there are avenues opening for a greater level of infrastructure. Carbon markets provide a clear example domestic entrepreneurship in green projects, thus of this: in these markets, demand is created by those promoting local enfranchisement. The Government who want to offset CO2 emissions due to country or will lend support to this by exploring incentives that regional regulations, or to ESG policies. can spur greater involvement in the provision of green services by Saint Lucians. Compliance markets established by the Kyoto Protocol, such as the Clean Development Mechanism (CDM)/ When implementing the NEP, ways to channel local Joint Implementation (JII), are currently limited to savings to green-energy funding will be explored. specific regions and are difficult to access. Companies The local banking industry will take the leading role can participate in the voluntary carbon market either to ensure that lack of financing will not be a barrier individually or as part of an industry-wide scheme, to successful transition to a sustainable energy such as the Carbon Offsetting and Reduction Scheme sector by 2030. for International Aviation, which is more fluid, as it is unrestrained by boundaries set by nation states or political unions. Objective 2: Facilitate access to innovative ways of financing green-energy projects. The voluntary carbon market has grown rapidly in the last five years, and is expected to reach USD 50 To meet growing demand for energy financing, new billion in 2030.42 Carbon markets were in the spotlight financial instruments, such as green bonds and carbon at the 26 th Conference of Parties (COP26), held in market instruments, have been established, along with Glasgow, Scotland in 2021, a conference consisting of new financial institutions, such as green banks and representatives from countries that have signed the green funds. In recent years, green financial products United Nations Framework Convention on Climate or services, in support of sustainable development, have Change (UNFCCC). At this conference, parties to the been booming. The expansion of environmental, social Paris Agreement of 2015 agreed on the rulebook for and governance (ESG) policies in companies and funds Article 6, determining how carbon credits may be used (e.g., pension funds) has triggered investor appetite for and traded under the Agreement. such instruments. One example is the issuance of green bonds, which surpassed USD 500 billion in 2021 and it Voluntary carbon markets are private initiatives that are is expected to increase tenfold by the end of 2025.41 not regulated by governments. However, governments can harness such markets to scale up emission reductions The private international financial sector views green and direct finance into sectors where it is needed funding as the financing instrument projected to most. For example, under the new Article 6 Rulebook, have the highest growth in the coming years. And, governments will be responsible for determining multilateral funding in this field is expected to rise. For which carbon credits may be used for climate-change example, the Green Climate Fund is already operating mitigation commitments. Similarly, awareness of the in Saint Lucia, facilitating resilience-linked investments. existence of such markets, as well as assistance to local However, in many cases, projects are not well enough private investors, will be promoted. structured to apply for such funding or are unknown to the financing source. In such cases, government intervention can have high added value. Saint Lucia | National Energy Policy 32

ANNEX 1: PROFILE OF SAINT LUCIA’S ENERGY SECTOR43 National Energy Policy (2023) Updated NDC (2021) Energy Policies National Energy Transition Strategy (2018) National Energy Policy (2010) Saint Lucia Climate Change Adaptation Policy (2015) Electricity Supply Act (2008) Key Legislation and Regulations Electricity Supply Act Amendment (2016) NURC Act of 2016 Electric Power Company Saint Lucia Electricity Services Limited (LUCELEC) Regulator National Utility Regulatory Commission (NURC) Energy Division Key Government Entities Department of Public Utilities Department of Transport Installed Electricity Generating Capacity (2022) 88.4 MW (diesel) Peak Electricity Demand (2022) 61.8 MW Utility-Scale Renewable Energy Capacity (2022) 3.3 MW 3 MW Distributed Electricity Generation (2022) 1.67 MW Electricity System Losses (2020) 5.74%1 Energy Use Per Capita (2021) 1,826.5 kWh Diesel Consumed for Electricity Generation (2022) 20,750,985 (imperial gallons) Domestic rates ($US 0.31-0.33) Commercial rates ($US 0.35-0.36) Cost of Electricity per kWh2 Hotel/industrial rates ($US 0.361-0.369) Streetlighting ($US 0.367) Exemptions from import duties (and Value Added Incentives for PV Systems Tax (VAT) as of August 2023 Incentives for Electric and Hybrid Vehicles Import duties at 5% Value of Diesel imports (2020) 3 $66,119,532.64 EC Total Gasoline Sold (2019) 13,844,999 (imperial gallons) 1 LUCELEC, Reliability in Disruption,2020 Annual Report 2 July 2023 rates following a fuel surcharge adjustment 3 Data obtained from Saint Lucia’s CCREEE 2021 Energy Report Card Saint Lucia | National Energy Policy 33

ANNEX 2: FOSSIL FUEL CONSUMPTION IN SAINT LUCIA, BY SECTOR (2018) (in thousand barrels of oil equivalent) Total Gasoline Aviation Sector Sector Diesel Oil Jet Fuel Kerosene LPG Petroleum (unleaded) Gasoline Share (%) Products Transport Road Transport 388.2 178 566.2 37.7 International Aviation 14.5 205.9 220.4 14.7 Domestic Aviation 0.8 10.8 11.6 0.8 International Maritime Navigation 8 8 0.5 Domestic Maritime Navigation 8 8 0.5 Transport Subtotal 388.2 15.3 194 216.7 814.2 54.2 Electric Power Production 587.8 587.8 39.1 Agriculture 14.6 14.6 1.0 Manufacturing 0.9 16.4 4.8 22.1 1.5 Commercial 13.72 13.72 0.9 Residential 50.57 50.57 3.4 All Sectors 777.3 30.6 1006.8 433.4 4.8 64.29 1502.99 100.0 Source: Saint Lucia’s Energy Balance (2000–2018). Saint Lucia | National Energy Policy 34 ENDNOTES Endnotes 1 World Bank, Public Documents, Saint Lucia, April 2021. This document discusses key conditions and challenges to Saint Lucia’s economy in 2020 as well as projections through 2024/25. https://pubdocs.worldbank.org/en/681431582655269212/mpo-lca.pdf 2 Ibid., Table 2: Saint Lucia/macro poverty outlook indicators. 3 Mercados-Aries International, “Technical Assistance Updating the National Energy Policy for Saint Lucia,” June 14, 2022, page 11, Figure 4. 4 Statista, Change in OPEC Crude Oil Prices from 1960 to 2023. https://www.statista. com/statistics/262858/change-in-opec-crude-oil-prices-since-1960/ 5 World Bank, Press Release, « World Bank Approves US$ 21.9 Million to Fund Geothermal Energy Exploration in Saint Lucia. » https://www.worldbank.org/en/news/press-release/2021/07/28/ world-bank-approves-us-21-9-million-to-fund-geothermal-energy-exploration-in-saint-lucia 6 International Renewable Energy Agency (IRENA), Energy Profile, Saint Lucia (2020). https://www. irena.org/-/media/Files/IRENA/Agency/Statistics/Statistical_Profiles/Central%20America%20and%20 the%20Caribbean/Saint%20Lucia_Central%20America%20and%20the%20Caribbean_RE_SP.pdf 7 Caribbean Centre for Renewable Energy and Energy Efficiency (CCREEE), “St. Lucia, Energy Report Card (ERD) 2021. https://cekh.ccreee.org/wp-content/uploads/2023/08/ERC_St.Lucia_Final_003.pdf 8 World Bank, Databank,GDP (Current US$) – Saint Lucia. https://data. worldbank.org/indicator/NY.GDP.MKTP.CD?locations=LC 9 World Bank, Databank,GDP per capita (current US $)-St. Lucia. https:// data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=LC 10 Statista, Saint Lucia: Share of economic sectors in gross domestic product (GDP) from 2012 to 2022. https://www.statista.com/statistics/730757/share-of-economic-sectors-in-gdp-in- saint-lucia/#:~:text=This%20statistic%20shows%20the%20share%20of%20economic%20 sectors,and%20the%20services%20sector%20contributed%20about%2072.16%20percent 11 Op. cit. World Bank, Public Documents, Saint Lucia. https://pubdocs. worldbank.org/en/681431582655269212/mpo-lca.pdf 12 Ibid., “Recent Developments” section. 13 Ibid., Table 2: Saint Lucia/macro poverty outlook indicators. 14 Mercados-Aries International, “Technical Assistance Updating the National Energy Policy for Saint Lucia,” June 14, 2022, Page 11, Figure 4. 15 Ibid., page 10. 16 World Bank, “World Integrated Trade Solutions,” Trade Summary for Saint Lucia. https:// wits.worldbank.org/CountryProfile/en/Country/LCA/Year/2020/Summary 17 Op.cit., World Bank, Databank, GDP for Saint Lucia. 18 Op. cit., Statista, Change in average annual OPEC crude oil prices. 19 Op. Cit., World Bank, Press Release on funding for geothermal exploration. 20 Op. cit., IRENA (data for 2019). 21 Op. cit., CCREEE, Saint Lucia - 2021 Energy Report Card 22 Government of Saint Lucia, First Biennial Update Report (BUR), in fulfilment of obligations under the UNFCCC, September 2021. https://unfccc.int/sites/default/files/ resource/Saint%20Lucia%27s%20Final%20BUR%20revised%20Dec%202021.pdf 23 Caribbean Centre for Renewable Energy & Energy Efficiency (CCREEE), Saint Lucia 2020 Energy Report Card. Saint Lucia | National Energy Policy 35 24 Based on the energy consumption figures in Annex 2, according to the latest energy balance available (2018). 25 Op. cit., CCREEE, Saint Lucia - 2021 Energy Report Card. 26 Government of Saint Lucia, digigov website: http://digigov.govt.lc 27 According to the 2010 Census. 28 World Resources Institute, “4 Charts Explain Greenhouse Gas Emissions by Countries and Sectors,” February 6, 2020. https://www.wri.org/insights/4- charts-explain-greenhouse-gas-emissions-countries-and-sectors 29 International Energy Agency (IEA, “Oil 2023: Analysis and forecast to 2028.” https://www.iea.org/reports/oil-2023. 30 World Economic Forum, Financing the Transition to a Net-Zero Future, October 14, 2021. https://www.weforum.org/reports/financing-the-transition-to-a-net-zero-future 31 According to the World Economic Forum, “green finance” is “any structured financial activity – a product or service – that’s been created to ensure a better environmental outcome. It includes an array of loans, debt mechanisms and investments that are used to encourage the development of green projects or minimize the impact on the climate of more regular projects. Or a combination of both.” 32 Bloomberg NEF, “Long-Term Carbon Offset Outlook 2022.” 33 Op. cit., UNFCCC, Saint Lucia. 34 A physical separator between conditioned indoor environments and unconditioned outdoor environments. 35 Understood as the “need” of a person to possess and use his or her own vehicle for daily activities, rather than public transportation. 36 Country Meters, Saint Lucia Population. https://countrymeters.info/en/Saint_Lucia 37 World Bank, Databank, School enrollment, tertiary, female (% gross)-St. Lucia. https://data.worldbank.org/indicator/SE.TER.ENRR.FE?locations=LC 38 World Bank, Databank, Proportion of seats held by women in national parliaments (%)- St. Lucia. https://data.worldbank.org/indicator/SG.GEN.PARL.ZS?locations=LC 39 This includes 34.6 percent in managerial positions, 31.2 percent at the supervisory level, 11.4 percent in technical functions, and 66.2 percent in administrative functions, according to CARICOM’s CCREEE (Energy Report Card, Saint Lucia, 2020). 40 See: Climate Policy Initiative. https://unfccc.int/documents/460900 41 See; Climate Bonds Initiative. https://www.climatebonds.net 42 See: Christopher Blaufelder, Cindy Levy, Peter Mannion, and Dickon Pinner, “A blueprint for scaling voluntary carbon markets to meet the climate challenge,” Mckinsey &Company, January 2021. https://www.mckinsey.com/~/media/mckinsey/business%20functions/ sustainability/our%20insights/a%20blueprint%20for%20scaling%20voluntary%20 carbon%20markets%20to%20meet%20the%20climate%20challenge/a-blueprint-for- scaling-voluntary-carbon-markets-to-meet-the-climate-challenge.pdf?shouldIndex 43 Data on the power sector and diesel used in power generation are from LUCELEC’s 2022 annual report, except for data on electricity losses, obtained from 2019 and 2020 Saint Lucia Energy Report Cards by CARICOM’s Caribbean Centre for Renewable Energy and Energy Efficiency, and the Energy Balance Survey submitted by Buckeye Partners, Saint Lucia. Saint Lucia | National Energy Policy 36 Government of Saint Lucia Saint Lucia | National Energy Policy 37