Green Energy Policy in Green Energy Policy in Aruba Aruba

Towards A Sustainable Energy Generation

“the journey to sustainability knows no finish line, only higher levels”

25 September 2013

Franklin HoevertszUtilities Aruba N.V.

Utilities Aruba N.V.Utilities Aruba N.V.

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Power & water: strongly dependent on Power & water: strongly dependent on

fossil fuel costsfossil fuel costs

• Power and water are mainly produced with Heavy Fuel Oil (HFO)

• Inefficient production technologies (being phased out)

• Utility tariffs are strongly dependent on HFO prices

• Utility tariffs are after personnel costs the highest costs for the tourism industry (70% GDP)

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Government intervention in tariff

Vision of the Government of Aruba

Achieve full sustainability in Energy Generation

• Short term approach: Slow down of the rise or a responsible reduction of the utility tariffs

• Mid-term aproach:o Reduction of the tariffs to affordable levelso More efficient, i.e. cheaper, power and water production methodso Cleaner (Greener) fuels and production methodso Reduction of the dependency on fossil fuels o Continuous reduction of greenhouse gas emissions

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Short Term ApproachShort Term Approach• The slowdown of the rise of

tariffs temporarily shielded local businesses and private consumers from the rise of utility costs and prices

• Thanks to more efficient production technologies and reduction of HFO prices, water and power tariffs have decreased with respectively approximately 30% and 15% in Q3 and Q4 of 2012.

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• Dialogue with social partners and stakeholders on actions to be taken

( Case of August 2011: partial increase of tariffs)

o Utility tariffs remained frozen for the remainder of 2011 and in part of 2012.

o WEB and ELMAR temporarily absorbed the increase of HFO prices and will be allowed to recoup the advanced costs of fuel

Mid-long term: various complementary Mid-long term: various complementary

measuresmeasures

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100 m3 100 m3

Conventional MSF Waterplant

NewSWRO Plant

Vs.Supply Side: Increase production Supply Side: Increase production

efficiencyefficiency

Power production

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RECIPS GENERATORConventional

Boiler / Turbine Generators

1 MWh 1 MWh

NewReciprocating Engines

Vs.

DONE

Water production

DONE

SWRO

Supply Side: Increase production Supply Side: Increase production

efficiencyefficiency

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Increase in production efficiency will result in reduction of the HFO consumption and HFO costs

Forecast

Supply Side: Substitute of HFO with Supply Side: Substitute of HFO with

Natural GasNatural Gas

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• HFO is at the moment as expensive crude oil

• Transportation techno-logies is making Natural Gas (NG) more and more available to the world market

• Increasing Global NG

reserves have boosted the potential supply

Supply Side: Renewable EnergySupply Side: Renewable Energy

WindWind

• In 2014 an additional wind park will be operational. This will double the wind power contribution to 36 %

• Aruba will then be one

of the countries with a high percentage of RE penetration.

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• Since 2009 Aruba has a 30 MW wind park, ope-rated by an Indepen-dant Power Producer (IPP)

• The IPP sells the power for a price that is fixed for 20 years

Supply Side: Renewable EnergySupply Side: Renewable Energy

SolarSolar

AAA solar Park 3.3 MW

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• The prices for photovoltaic panels (PV panels) have been going down while the efficiency is going up.

• Aruba has approximately 3000 hours of sun per year

• Initiatives to utilize this potential on top of, government owned homes, the base of the Royal Marines and the office of the our nature reserve, Parke Arikok

• Private businesses are also picking up on this opportunity

• Goal to increase this natural resource by installing as much as possible solar panels on government buildings

Supply Side: Renewable EnergySupply Side: Renewable Energy

Waste to Energy (W2E)Waste to Energy (W2E)• With a population of 100,000

people and more than one million tourists a year, Aruba produces large quantities of waste. Until now, this waste is land filled

• In 2014 companies will be invited to tender for the building and operation of a Waste to Energy (W2E) plant.

• In the W2E plant old and new waste will be gasified.

• The gas will be piped to the power company for combustion and subsequent power generation

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From vision to resultsA greener portfolio

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Demand sideDemand sideHunto nos ta spaar

Smart metering

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The Government of Aruba is aware that drastic reductions of the utility tariffs may induce consumers to spend more water and energy and thus in the end have equal or higher utility costs than before.

To mitigate this risk various activities have started in order to manage the utility demand of consumers

Demand side: increased awarenessDemand side: increased awareness

• At this moment, the level of fundamental and practical knowledge on water and power needs improvement

• At the invitation of he Government of Aruba, TNO, the Dutch Institute for Applied Scientific Research, has established a subsidiary on Aruba

• One of the first deliverables of TNO has been the design of a Road Map to Sustainable Energy on Aruba

• TNO will soon, in cooperation with all stakeholders, initiate the “Living Lab” where in 20 private homes all kinds of energy efficient and energy saving devices will be tested

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Demand side: increased awarenessDemand side: increased awareness

• For the 4rd consecutive year the Aruban Government will organize the Aruban Green Energy Conference to be held Oct. 9 - 11, this time the conference will be held in Partnership with the Caribbean renewable Energy Forum

• Previous key note speakers were Al Gore and H.R.H. King Willem Alexander

• Key notes speaker for 2013 will be:

o H.E. M. Eman, Prime Minister of Aruba

o Ms. M. Van der Hoeven, Executive Director International Energy Agency

o Prof. dr. Dimitris Papastefanakis, Center for Renewable Energy Resources and Saving Greece

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Demand side: incentives & substitionDemand side: incentives & substition

Substitute of streetlights for LED Lights and substitute of other devices• At present 99% of all streetlights are high wattage mercury vapor lamps.•In the coming years all the mercury vapor lights will be replaced by low wattage LED streetlights•This will result in a 40% to 50% reduction of power use for street lighting.•ELMAR has already placed 1000 energy efficient LED street lights•On a case by case basis government buildings will be retrofitted with more efficient devices, e.g. inverter AC’s

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Incentives for more efficient equipmentIn order to stimulate the use of more efficient equipment the Government has lowered the import duties on amongst others:•photo voltaic panels;•Hybrid;•inverter air conditioners;•and electric cars;

Strategic partners are joining usStrategic partners are joining us

““we have to do it our self but we can’t do it alone”we have to do it our self but we can’t do it alone”

The island of Aruba is committed to increase its sustainability and reducing its carbon foot print in collaboration with strategic partners in order to overcome challenges in renewable and transitional energy.

Our partners:•TNO• Carbon War Room (CWR)• Dutch Gasunie•Anthony Veder•SHELL BV•ECLAC•EBN•SODM•REPSOL•CREF

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H.E. Mike Eman, Prime minister of Aruba and Sir Richard Branson (founder CWR)