Minister Joy Grant’s Address at Private Sector Forum on Renewable Energy Initiatives Print E-mail
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Thursday, 07 February 2013 00:00

Hon.My Ministry is a young, multi-faceted organization, which has been entrusted with responsibility for the areas of energy, science and technology and public utilities.  Although distinct, these are all inter-related in that they are central to the future economic and social development of Belize, and play, or have the potential to play a significant role in the daily lives of our people.  Today, we are focusing on energy in view of its importance as the driver for all sectors of our economy and thus of the economic and social development of our country. Improving our energy security and ensuring access to affordable and reliable energy are critical prerequisites to securing the future well-being of Belizeans.

This is the first of three private sector forums that the Ministry of Energy, Science and Technology and Public Utilities (MESTPU) will host in Belize this year. These sessions are very timely as they come after the very successful second annual private sector forum held in November of last year at which the Prime Minister, Hon. Dean Barrow, in his keynote address outlined this Government’s agenda for working collaboratively with this very important constituency.  It is essential that we inspire new forms of public-private partnerships and institute new public policy measures to overcome systemic challenges at the country level.

The important role of the private sector in the development of a country is no longer the topic for philosophical debate.  It is accepted as fact that for a country to grow and develop, there has to be open channels of communication and meaningful exchange of ideas leading to concrete plans and actions between Government, individual companies and or private sector representative groupings.

Belize is facing the issue of increasing demand for energy together with the increasing costs of fossil based energy. This energy dilemma has to be considered from several different perspectives, including increasing national petroleum production. To this end, six exploration wells will be drilled during 2013. We know that the demand for energy in Belize will increase by no less than 4% annually. This means that we need to be aggressive in seeking new sources of energy now to be able to meet this demand. This provides us the unique opportunity to review sources and costs critically so that increased power generation will reduce the cost of power to consumers and increase our competitiveness as a nation. Development is stymied without reliable and competitively priced energy.  A priority of this Government is also to ensure that all sectors of society, including the urban and rural poor, have access to energy. This will only be achieved by creating a shared understanding of the role of the private sector and promoting the business opportunities in achieving sustainable energy for all.

However, with the extremely volatile and escalating global prices of fossil fuels, our energy security can only be improved by increasing our domestic production of renewable energy sources. Countries in Central America are well positioned to harness renewable energy.  Belize is no exception. Already, we are utilizing solar, hydro and biomass to provide power. There is interest in producing wind energy while we investigate geothermal and ocean thermal energy conversion (OTEC) potential. The Ministry is actively promoting the transition to renewable energy. This transition from a fossil-based economy to a low carbon economy is a central tenet of the National Energy Policy. Renewable energy is moving from niche to mainstream markets based on the maturity of a range of technological innovative solutions. We recognize the need for more R&D and invite business and academia to partner with us in this regard. We need to institutionalize mechanisms such as feed-in tariffs and net metering, which allow investors to sell excess energy to the grid, thereby reducing the cost of power for their business operations. Today, renewable energy provides business opportunities as well as development benefits, particularly in small open economies like ours, where resource endowments exist and local conditions allow for a comparative advantage.

Energy efficiency is the key factor in reducing energy intensity. Increased energy efficiency produces benefits for the government, industry and consumers. The deployment of existing energy efficiency technologies is a near-term cost–efficient option for achieving enhanced competitiveness as well as addressing national energy needs.  Energy efficiency is the most readily available solution to meet the increasing energy demand here at home.  Energy efficiency accounts for one third of the total low-cost opportunities available based on available technologies. Energy efficiency, very importantly, can also create jobs in manufacturing, services and related sectors.

In the last decade, energy audits have become very popular.  An energy audit is a comprehensive review of energy use in a building with a view to making changes, including retrofitting, so that efficiencies are realized in energy use while at the same time transitioning from the use of fossil fuels to renewables where possible.

The business case has to always be made in this regard for the Government, the local business and the individual. We have to demonstrate that retrofitting reduces recurrent energy expenses and improves profitability in the short to medium term.  The MESTPU will be actively promoting these audits in the next three years as part of our strategy to reduce energy use countrywide by 30% by 2030.

The Government has a very important role to play.  It has to create the enabling environment. This is an often used and perhaps overused phrase that has come to mean a lot or nothing over time. In this context, I use it to encapsulate one of the most important roles of Government, which is the removal of broad based regulatory uncertainty by initiating various legal and fiscal policy measures which will set up an investment-friendly political environment.  The National Energy Policy and Strategic Plan clearly state that Government has to create the fiscal space for businesses to incubate and grow. This means reviewing laws, incentive programs and banking arrangements.  In the MESTPU, then, we must collaborate with other countries in the Caribbean and Central America who are also reviewing the legislation on their books to identify the areas that need to be changed to reflect the realities of this decade: a reality which includes the high cost of our national energy bill, the high cost of implementing adaptation measures to counter the negative impacts of climate change and the fierce competition for foreign investment.  At the Ministry, we are also engaging a consultant to review the incentive package currently available to determine whether changes, if enacted, will result in the transition to more energy efficient technologies being adopted.

 This exercise will also ensure that the financial impact to government will be revenue neutral in the short run and result in increased revenues from business in the medium term. It is very exciting and gratifying to know that this is possible as it has been done by others.

Working with the other relevant Ministries, we are planning to promote the study of STEM (science, technology, engineering and mathematics) disciplines for our young people to be innovative and bold in their thinking.  We are a very smart people, who with the right incentives and ongoing assistance will be second to none in our accomplishments.

It is no secret that there are limited public sector funds available for energy investments. Globally, investment in renewable energy accounted for 44% of all new energy generated capacity last year, up from 34% in 2011 and 10% in 2004. The private sector invested twice as much as Government in renewable energy. In Belize, renewable energy investment has been negligible but that is about to change in a very significant way. However, with smart policies and the right financial instruments, the private sector will be able to leverage funds for investment in clean energy projects. There is a need for the inflow of foreign and local investment in the sector. The private sector needs to be able to access funding at competitive rates. Without access to competitive financing, a fledging business has a one in ten chance of succeeding. The cost and quantum of borrowing are significant in any business plan. If there are international sources of concessionary funding available for the energy sector, then meeting the requirements to access these funds should be a priority.

We in the Government aim to engage with leaders in industry, including entrepreneurs and proprietors, to foster interactive dialogue so that we forge strong partnerships between the public and private sectors.  Such engagement and partnerships will lead to greater understanding and heightened trust. It is crucial that we are able to point to a few projects/initiatives that are successful because of a meaningful relationship.

Your success in the private sector, by being more energy efficient, will mean increased profits and economic growth.  It will also increase jobs and generate a number of additional ancillary business opportunities, including training and foreign exchange generation.  

Today, we want to hear from you in the working groups. We need your input to advance the Ministry’s agenda with the private sector as we strive to meet the country’s growing energy needs in the most efficient manner and to provide enhanced energy security by diversifying the energy portfolio.
Thank you.