THE BLUE ECONOMY

I am not really a big fan of changing labels on global movements, because it takes an awfully long time for new ideas to catch on. 20 years ago, my classmates in the first graduating class of Environmental Studies at York University Canada were talking about 'green economics'. Precious few others were. Now, the concept of a 'green economy' is starting to go mainstream....which is good! But like most things, once it goes global and has a bunch of hands on it - the original concept gets washed out.

So as the Green Economy gets muddied by the Brown Economy (brown refers to the status quo for anyone asking) - the concept is revitalized with a new label:

THE BLUE ECONOMY.

I like it. And I like this minimalist video that explains so succinctly the common sense foundation to it all.

I am expecting to embark on a contract to draft an Economic Stimulus Plan for the Hotel Sector in Grenada starting Monday. I will do my best to integrate as much of this thinking into it as possible because it will save my clients money, open up new markets and protect the environment.

Let's see what a good saleswoman I am!?

Ethical Ideas Declares Energy Campaign a Success

In April of 2012, Ethical Ideas Consulting embarked on a journey with the Grenada Hotel and Tourism Association to address the major challenge of energy in the small island state of Grenada. Ethical Ideas started the campaign by facilitating agreement among members for an “Earth Day Declaration” that articulated the following:

Desire: Reduce Energy Costs


The Result: Grenada’s Hotels now have the opportunity to invest in 100kw renewable energy systems with net metering and a set price of XCD $0.54 cents per kilowatt hour.

Prior to the Campaign: Hotels could invest in renewable energy systems, but they had to sell 100% of the energy produced to the utility and buy it back with more than a 100% mark-up in cost.


Desire: Liberalize renewable energy, regulated by the Eastern Caribbean Electricity Regulatory Authority (ECERA).


The Result: Renewable energy has been liberalized through the use of ‘special purpose vehicles’ which are companies that are set up for a specific purpose (in this case it would be producing renewable energy). The new energy framework will be regulated by ECERA.


In addition to the lobby with the Government and GRENLEC, Ethical Ideas led the appeal on behalf of the Tourism Sector to have the Clinton Foundation come to Grenada. In addition to giving my most passionate elevator pitch ever to one of President Clinton’s Aides, several project outlines that have been developed for several Ethical Ideas clients were submitted to the Foundation to illustrate the sustainable potential of this small island state. Check them out, the Foundation is a GREAT organization: http://www.clintonfoundation.org/

The Minister of Finance informed the audience at the consultation for the New Energy Framework, that a Memorandum of Understanding (MOU) has been signed between Grenada and the Foundation. Negotiations of this type take place at the highest levels, and details have not yet been shared with any non-state actors.
The SIDSDock Proposal will hopefully be reviewed in April, and if that happens, the Sector should benefit from some grant/soft loan support for Energy Audits and retrofits. This will be great because it can yield 50% reductions in energy consumption.

All of this helps the Hotel Sector reach their goal to become the first zero carbon hotel sector in the Caribbean. Ethical Ideas is very pleased that the exhaustive lobby (captured in previous posts on this blog) has been successful and that all the players who dedicated themselves to making their desires heard have been rewarded. Politically motivated detractors might claim that realizing every single lobby point is luck – but in my experience – luck isn’t that thorough.

I wish I could thank everyone that helped on this campaign personally, but naming names on this small island state is a much bigger political act than anyone in a large country could imagine, and an election is on. So I will have to figure out how recognize people's efforts without blowing up a sand storm in the process. It may have to stand for now recognize the obvious fact that the nature of lobbying requires the input of others so there's a long list of people to be Thanked.

Government Consultation on Energy

The Government will be hosting a 'Public Discussion' with selected stakeholders (I am among them) to go over the contents of the 'A New Development Framework for the Energy Sector'circulated by the Government on December. This is being welcomed by all, since the published document raises as many questions as it answers. Recent statements made in the media by persons connected to this deal also suggest that the sale has not been officially completed. If there is a need to update or correct my previous posts on the subject following this meeting I will - so watch this space!

Greece: The odyssey - People & Power - Al Jazeera English

Greece: The odyssey - People & Power - Al Jazeera English


The link above will lead you to an interesting news documentary presented on Al Jazeera that profiles how Greek professionals - marginalized from their city jobs - are returning to the land with sustainable, entrepreneurial ideas. Grenada shares many economic similarities with Greece, including a culture rooted in the land.

MAJORITY SHARES IN GRENADA'S ELECTRICITY COMPANY SOLD OVER CHISTMAS

On November 27th, a Successor Agreement between the Government of Grenada and the Barbados based Light and Power Holdings Ltd. (LPH) was signed. This means that the majority shareholder in GRENLEC, which had been WRB Enterprises/Grenada Private Power Ltd has now sold their shares to a subsidiary of Canadian based EMERA. The subsidiary, Light and Power Holdings has purchased 61.4% of GRENLEC shares. The Government has one year to purchase the 11.4% shares to ensure EMERA/LPH are compliant with the 50% ownership policy. The Framework does not clearly stipulate the consequences if this did not happen.

The initial response by Grenadians following developments in the nation’s energy sector has been positive; as several local news and social media reported with a measure of jubilation that Grenada’s energy monopoly had been finally broken paving the way forward for renewable energy liberalization.

Has It?

It is commendable on the Government’s part to have released the most comprehensive map of Grenada’s energy framework that has ever been available to the public, although it was shared after the deal was signed. Analysts will certainly appreciate the detailed ownership profile and contextual background provided, that was intended to enable the public to understand the details of the transaction as they have occurred. But there is little question the intricacies of the Framework are still not simplified enough for general public consumption.

In the (apparent) attempt to be transparent, generalized statements and contradicting information has been presented, leaving a scrutinizing reader with as many questions as there are answers provided.

Our Renewable Future

The Successor Agreement between the Government and EMERA include a new interconnection policy that will provide an opportunity for citizens to invest in renewable energy, such as solar panels for systems up to 15 kilowatts. That’s great, since most households don’t need more than that, and the new policy allows householders to take the first draw of power on their systems and sell a portion of their surplus energy (if there is any) at a fixed rate. Hopefully, that will do a lot to stimulate business for solar energy retailers targeting the domestic market. There’s a ceiling to the growth however, capped at 5% of the peak demand (which is 30MW), until grid impact studies are done.

The questions raised in the new interconnection policy however include:

- Since the 5% cap will ‘be revised after consultation with GRENLEC on studies on grid stability thresholds’ we have to wonder who will conduct these studies? Will there be an independent review? Or will the lucky 5% be the only 5% that benefit from this policy?

- If we assume that a reasonable portion of the 5% would be reserved for household use, based on the cap established approximately 10 businesses could take advantage of the 100kW offer.

- Renewable Energy Special Purpose Vehicles (RESPV’s) are traditional renewable energy financing instruments, but they are also commonly used to financial liabilities that can skew corporations financial profile such as ENRON did. Does Grenada have sufficient financial legislation to protect the public from any inappropriate use of SPV’s?

- Who has the final say on who the RESPV partners are going to be?

Does Civil Society Get a Second Chance at Investing in Solar Farms?

One of the positive highlights could be the introduction of the RESVP Framework since it provides a policy opening for civil society stakeholders to invest in a renewable energy facility perhaps in a shared partnership with another private company and GRENLEC. The RESVP framework was likely agreed upon to facilitate Geothermal energy development and private equity investments in renewable energy. But - this might actually represent the lifting of the barrier my Hotel and Tourism clients faced when I tried to get a community solar farm set up for them. In 2012, independent energy generation was a NO-GO! Will we be able to re-open this door to reap the benefits of climate financing, collect undesignated revenues for social programming and economic growth while advancing a carbon neutral goal?

With respect to how the sale of the majority shares will affect Grenadian consumers on a more personal level, there isn’t much good news [yet]. EMERA has a controversial reputation in the other markets where they operate subsidiary utilities. One market even has their own consumer site operating, which can be found at this link: Grenadians might find themselves singing the words of Joni Mitchell “Don’t it always seem to go that you don’t know what you’ve got till it’s gone” but hopefully the strong and committed technical and management team at GRENLEC will help keep potential consumer concerns at bay as they begin operating with new owners.

There is no question ‘The New Developmental Framework for the Grenada’s Electricity Sector’ has several areas that require clarification. Recognizing that the Government’s announcement was trying to capture an enormous amount of information in a very short document, ambiguities are to be expected. The Government has organized a stakeholder consultation early next week, so further analysis on this aspect of the transaction will be reserved until then.

When President's Cry

Twenty seven lives, among them 18 innocent babies of heartbroken parents. As their loss brings the President of the United States to tears on National television we are reminded that the loss of innocent lives by violence of any means is harsh, inhumane and should not happen - for any reason.

"Oh The Places We'll Go!"

I'm sure Dr. Seuss won't mind me adapting the title of his ever-so-insightful children's poem, since it so perfectly mirrors the journey of my hotel clients. The most recent news comes in the form of a new conference hosted by the Grenada Private Sector Organization (GPSO). This is a coalition of the Hotel and Tourism Association, the Chamber of Commerce and the Employers Federation.

The focus of the press conference was to alert the public to the seriousness of the economic contraction in Grenada, including; the troublesome level of business closures to-date; and the further business closures anticipated in the future. Part of the critique presented by the GPSO in the press conference was an emphasis on the immediate need for solutions and the apparent lack of urgency on the part of the government. All around, most critics would say there's been a lot of meetings but those meetings had not resulted in action.

The media - not surprisingly - made the press conference a political issue, which is how the media works in an election year. Their reports focused on the criticism of the government with little coverage of the economic warning being issued. And so the circus began, with a series of back-and-forth's between Government Ministers and members of the private sector. Most of the melee has played out in the media, but in my case I had the honour of having a government Minister remark to my clients that the government was not happy they were employing me - inferring of course that it would be better for them to let me go. For fear of getting way off track - I will rant about my constitutional right to work another day(I illustrated Grenada's constitutional rights for a UNDP project in 2009, and I know that document well!).

According to the Government, they established a Hotel Sector Emergency Working Group that has had several meetings and tabled many ideas. This is completely true. However,in their view, this is an indication of their responsiveness and the reason why they believe the criticisms put towards them are unjustified. The trouble is, meetings without results aren't a solution.

As many of my clients have remarked behind closed doors "What constitutes an emergency for this government?".

Why the emergency? 1/3 of the hotels in Grenada have closed and many more are about to follow suit. The sector is the largest earner of foreign revenue in Grenada, and among the largest employers in a country with an unemployment rate soaring near 40%.

It doesn't take an economist to figure out what further closures could do to a small island micro-economy with a population of 100,000.

Thankfully though, even though a lot of government officials were annoyed - things are starting to change already. Whether that is seen as too little too late, or something being better than nothing is up to my clients.

A press release issued by the Government yesterday, announces that 8000 energy efficient LED lights have been donated to Government and that the GHTA will be getting some of them. That's good (and surprising) news, because the GHTA wasn't slated to get anything from this round of donations, we were up for the next round in a couple of months. Needless to say, the GHTA will sing the praises of the government if and when the LED's are given to them.

It's also encouraging to see the Energy Division informing us of a soft loan facility offered by the International Renewable Energy Agency (IRENA) for renewable energy investments. It would have been a great opportunity if the law (and GRENLEC) had given us permission to set up our solar farm, but since GRENLEC has refused even though the financing is out there to do it - we can't. I won't give up on this opportunity though since the best offer on the table from GRENLEC was 100kW solar panels on the rooftops of buildings. At the time we refused it because 100% of the energy produced from the system would be sold to GRENLEC at a rate they set (around $0.40 cents per kWh) and energy would be sold back to the hotels at approximately $1.10. It's not like other countries where you install a panel and use what you need and sell surplus to the utility if there is any.

So with our eyes turned to energy efficiency as a way to reduce consumption by as much as 50% - It's very encouraging to see that funding may soon be forthcoming from a government department to implement one energy audit conducted by the Caribbean Hotel and Tourism Association CHENACT Programme. The purpose will be to measure whether the forecast savings are realized when implemented as directed, how much disruption it causes to do so (for example, can the work be done with guests on the property)and to what extent savings are realized. After all, energy efficiency claims should be taken with a grain of salt, it would be really problematic if cash-strapped properties borrowed money to retrofit only to find that like many energy efficient cars - 30mpg advertised is actually 20mpg in real world situations.

We must also be encouraged that within the same two weeks, there's apparently been a conversation between the government and SIDSDock about the desire to assist the sector energy and economic recovery goals, with some speculation that funding might be organized through the Caribbean Development Bank also. I do hope this comes to fruition, but I remain concerned that the solutions will be soft-loan based.

The only soft loans the sector can consider now are ones to refinance existing debt. It is simply unsustainable to contemplate economic recovery solutions that are predicated on increasing debt.