Energy Aid in Caribbean and Pacific Small Island Developing States (SIDS) Keron Niles A thesis submitted for the degree of Doctor of Philosophy December 2012 Table of Contents Table of Contents.............................................................................................................. 3 Table of Figures ................................................................................................................ 8 Chapter 1. Introduction .............................................................................................. 16 1.1 Preamble to this research ................................................................................ 16 1.1.1 The Global Dominance of fossil fuels ...................................................... 16 1.1.2 The importance of international aid in a sustainable energy transition .... 17 1.1.3 Why a transition to sustainable energy in SIDS is required ..................... 17 1.2 Defining the research problem: the role of international aid in a sustainable energy transition in the power sector in Caribbean and Pacific SIDS. ....................... 19 1.3 Research Goal and Objectives ........................................................................ 21 1.4 Thesis Outline ................................................................................................. 21 Chapter 2. Research Methods..................................................................................... 23 2.1 Introduction .................................................................................................... 23 2.2 Definition of Key Terms & concepts ............................................................. 23 2.3 Project & Interview Data Collection: An Introduction .................................. 31 2.4 Project Data Collection Method ..................................................................... 32 2.4.1 Limitations of Project Data Collection Method ....................................... 37 2.5 Interview Data Collection Method ................................................................. 38 2.5.1.1 Limitations of Interview Data Collection Method ............................ 40 Chapter 3. Background and Context .......................................................................... 41 3.1 Chapter Introduction ....................................................................................... 41 3.2 Energy Use during the Colonial Era in the Caribbean & Pacific ................... 41 3.3 The Evolution of Energy Production: Globally and in Caribbean and Pacific SIDS ........................................................................................................................ 42 3.4 Energy Consumption in SIDS between 1970 and 2010 ................................. 43 3.4.1 Newly independent SIDS respond to Oil Price Shocks ............................ 43 3.4.1.1 The vulnerability of the Pacific Region to high oil prices ................ 44 3.4.1.2 The Unique case of the Caribbean: the role played by energy exporters in the region ........................................................................................ 44 3.4.2 Dependence on fossil fuels ....................................................................... 45 3.4.3 Why fossil fuel dependence is concerning – climate change & peak oil . 50 3.4.4 Mitigating impacts of climate change & peak oil - the role of renewable energy .................................................................................................................. 51 3.5 Development Constraints in SIDS .................................................................. 51 3 3.5.1 Geographical Isolation .............................................................................. 52 3.5.2 Dependence on Foreign Sources of Finance ............................................ 53 3.5.3 Population Growth .................................................................................... 56 3.5.4 Vulnerability to Natural Disasters ............................................................ 58 3.6 Mutually reinforcing impacts of climate change & peak oil on Tourism & Agriculture .................................................................................................................. 59 3.6.1.1 Tourism ............................................................................................. 59 3.6.1.2 Agriculture ........................................................................................ 62 3.7 International Aid – context ............................................................................. 65 3.8 Summary ......................................................................................................... 65 Chapter 4. Results (Project Data) ............................................................................... 67 4.1 Introduction .................................................................................................... 67 4.2 Quantity of Aid Awarded ............................................................................... 67 4.3 Energy Aid Disbursements between 1970 - 2010 & World Oil Prices .......... 68 4.4 Nature of Energy Aid ..................................................................................... 71 4.5 Energy Aid Disbursements by Type ............................................................... 77 4.6 Case Studies: Donor Entities and Energy Aid (1970 – 2010) ........................ 82 4.6.1 World Bank Group (WBG) ...................................................................... 83 4.6.1.1 World Bank Group (WBG) Energy Aid to the Caribbean and Pacific (1970 - 2010) ...................................................................................................... 83 4.6.1.2 Nature of WBG Energy Aid to the Caribbean & Pacific .................. 99 4.6.1.3 WBG Energy Aid Disbursements by Type ..................................... 103 4.6.1.4 Summary: WBG Energy Aid to the Caribbean & Pacific (1970 – 2010) ......................................................................................................... 105 4.6.2 Asian Development Bank ....................................................................... 107 4.6.2.1 Asian Development Bank Energy Aid to the Pacific (1970 - 2010) 107 4.6.2.2 Nature of ADB Energy Aid to the Pacific (1970 – 2010) ............... 130 4.6.2.3 ADB Energy Aid Disbursements by Type ...................................... 131 4.6.2.4 Summary ......................................................................................... 133 4.6.3 The Inter-American Development Bank ................................................ 134 4.6.3.1 Inter-American Development Bank Energy Aid to the Caribbean (1970 - 2010) .................................................................................................... 134 4.6.3.2 Nature of IDB Energy Aid to the Caribbean (1970 – 2010) ........... 153 4.6.3.3 IDB Energy Aid Disbursements by Type ....................................... 154 4.6.3.4 Summary ......................................................................................... 156 Chapter 5. Results (Interviews) ................................................................................ 157 5.1 Introduction .................................................................................................. 157 5.2 Barriers & Challenges to transitioning to Renewable Electricity ................. 165 4 5.2.1 Funding difficulties................................................................................. 167 5.2.2 Small Size ............................................................................................... 168 5.2.3 Human Resources ................................................................................... 169 5.2.4 Political will ............................................................................................ 170 5.2.5 Lack of clear policy and legislation ........................................................ 171 5.2.6 Dependence upon donors ........................................................................ 172 5.2.7 Lack of Project Management Skills........................................................ 172 5.2.8 Land Access ............................................................................................ 173 5.2.9 Supply of coconuts for Biofuels ............................................................. 174 5.2.10 Lack of Data ........................................................................................... 175 5.2.11 Other Barriers ......................................................................................... 175 5.2.11.1 Environmental Risks ....................................................................... 176 5.2.12 Summary ................................................................................................. 176 5.3 Oil Price Volatility: Impacts ......................................................................... 177 5.3.1 Impacts on the State ................................................................................ 177 5.3.2 Impacts on Power Utilities ..................................................................... 178 5.3.3 Impacts on End Users ............................................................................. 179 5.3.4 Summary ................................................................................................. 180 5.4 Perceived role & impact of aid ..................................................................... 180 5.4.1 Summary