The Renewable Energy Industry in CARIFORUM Countries

COUNTRY INDICATOR ANALYSIS

f)

Excluding any impacts of foreign investment on countries, foreign firms who make investments in RE generally mobilize their own technical resources, particularly when utilizing technologies other than PV. The region is lacking in skills for less popular technologies like geothermal, wind, hydropower and waste to-energy (WtE). As a result, local RECs are not able to benefit from these opportunities. All countries included in the study, which have developed or updated their energy policies in the last 10 years, have made provision for the interconnection of utility scale IPPs. This has created opportunities which are advertised internationally, especially given the need for large investments to pursue local RE targets. As expected, IPP projects are spread across the technologies. However, PV is the only preferred technology common to all 15 countries. This would suggest that there are significantopportunities for local RECs to install PV systems on behalf of foreign investors and local investors as well. There is no way to accurately predict the volume of expected work from PV installations since most governments have not specified these types of details (e.g. percentages per technology). The financial reality is that whichever technology from the list of preferred options attracts the required investment, will most likely be implemented. It may be fair to conclude that significant opportunity exists for RECs who offer these services in the future. On average only about 2 of these subcontracting assignments have occurred in about half the territories. Unfortunately, there has been some negative feedback about being offered very unfavourable terms and conditions. Foreign Direct Investment (FDI) remains relevant to all territories since they all encourage the presence of utility scale IPP regardless of whether smaller distributed systems are promoted or not. The major portion of the investment is in equipment, which is sourced internationally, resulting in a minor monetary investment. These foreign developers dominate the design, engineering and procurement stages of the value chain for IPP projects. Ongoing economic activity post implementation (maintenance, operations) represents an offset to the local revenues generated from energy sales to the utility. While these investments will help the region to achieve its energy transformation goals, there is a long-term negative net flow of foreign currency via repatriation if saving from fuel imports are excluded. An in-depth impact assessment may be useful. The PSI group in two other countries have reported courting foreign firms which were interested in their local market, but no progress has been made. In some cases, the foreign firms have unrealistic expectations about the role of the PSI in securing business for them. Those countries with unfavourable regulatory environments are generally ignored by foreign entities.

g)

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The Renewable Energy Industry in CARIFORUM Countries