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Energy

Energy sector central to Haiti sustainable development

Overview

Energy is an essential infrastructure, central to Haiti's sustainable development. Within the Energy sector, the Power subsector has been characterized by less than 30% access overall (only about 5% in the rural areas), the need for grid rehabilitation, better power quality and increased generation.

At the same time, the energy market was estimated in 2009 to be a US$ 700 million market, one of the single largest sector markets in the country. A power sector expansion plan estimates the need for a 200 to 300 MW increase each year for the next 5 years to meet the growth objectives of the Haitian Government. When generation, transmission, distribution and commercialization are taken into account, this looks like a multi-billion dollar need for investment.

Taken by sector, the industry consumed 328 thousand toe (19% of the total final energy consumption), transportation sector 203 thousand toe (12%), households 1 094 thousand toe (65%) and services 62 thousand toe (4%).

The final energy intensity, final energy consumption per GDP, shows approximately 570 kgoe/1000 US$1995 in 2001, or the equivalent of 22.8 kgoe/1000 Gourdes. Compared to other countries in Latin America and Caribbean : Jamaica 431, Cuba 403, Guatemala 361, Dominican Republic 306, El Salvador 264, Mexico 195, Panama 195, Costa Rica 167, it shows a very inefficient use of energy in Haiti.

Per capita annual final electricity consumption is only 84 kWh in 2000 the least amount in the Caribbean area. Electricity consumption represents only 4% of the total final energy. Less than 30% of the households are connected (including illegal connections) to the grid and only 12.5% are regularly connected with meters. The largest sector for electricity consumption is industry (43%). But this sector represents only 10% of the GDP.

Opportunities and Perspectives

It is necessary to make changes in the Haitian energy sector. This present plan updating of the National Energy Sector Development Plan involves various stakeholders and aiming at establish:

  • a vision for the future of the energy sector and a consensus on options for sustainable development;
  • a priority for short and middle term actions;
  • the identification of a development partnership for the energy sector between the Government, private sector and donors.

HOUSEHOLD ENERGY

Fuel wood remains until now the most important source of energy of the country: the country's energy needs are met by about 80% with local biomass and hydroelectricity.

Firewood and charcoal

It is essential to reduce the use of firewood and charcoal by households and small and medium enterprises. Available alternatives are conservation and substitution.

Bagasse

Fuel consisting of the fibrous residue from sugar cane squeezed by the mill to extract the juice and having a calorific value of 7900 kJ / kg, bagasse will be valued and used as an alternative to firewood. The use of bagasse as an energy source in sugar mills and "guildives" for the production of alcohol will be systematized. Sugar mills' electricity production will be supported to obtain greater capacity in order to provide surrounding communities with electricity via mini-grids.

Waste to energy

Waste management is a serious problem faced daily by the Haitian urban communities. To help solve this problem the government is encouraging actions aiming at using waste:

  • As raw material for energy production (electricity, biogas 2, etc. ..) and as compost for agriculture.

ELECTRICITY

The current system of generation, transmission and distribution of electricity hinders progress and socioeconomic development of Haiti. This situation that the earthquake has worsened is mainly characterized by:

  • An extremely low rate of electrification (less than 30%);
  • A rate of electrification even lower in rural area;
  • An electricity supply intermittent, irregular and unreliable (in electrified areas);
  • Very high costs of electricity;
  • A fragmented grid;
  • Absence of an entity monitoring the sector's operation;
  • Electricity production based mainly on imported petroleum products (70% diesel or heavy fuel oil) at high cost for the country (almost 50% of the balance of payments to meet 20% of energy needs);
  • Production of electricity from polluting fossil fuels, hazardous to the environment and producing greenhouse gas emissions.

PETROLEUM PRODUCTS

Haiti, without domestic crude oil resources nor refining capacities, is highly vulnerable to the oil product disruptions and to the volatility of oil product prices. The country is mainly importing its petroleum products from Venezuela due to the preferential terms of "the Petro Caribe Accord" signed between the two countries. As long as this agreement remains favorable to the nation interests, Government intends to make every effort to meet its commitments and to benefit from advantages offered to the country.

RENEWABLE ENERGY

In 2008, Haitian Government has formally committed to the promotion of renewable energy. The use of these domestic energy resources provides access to the nation's energy autonomy. It allows conciliating energy supply and environmental protection while respecting the citizens' right to have access to energy resources. Initial investment costs are high, but already competitive in Haiti given the high costs of thermal generation. A major challenge remains the lack of knowledge of Haiti's regulatory and technology needs for the implementation of renewable energy technologies.

Energy policy components

Energy policy will ensure that by 2020 50% of electricity supply is generated using renewable energy.

Small hydro

The hydropower potential of the country must be exploited to increase the power production capacity.

Solar energy

Solar energy is probably the most abundant energy resource nationwide. However, considering the state-of-the-art technology to exploit this form of energy, the initial investment costs are high. Facilitate access to electricity generated from solar; especially in areas without other viable alternatives will result in an improved standard of living of the population.

Wind energy

The utilization of wind energy is a privileged axis. This resource must be developed in all regions of countries where viable economic potential will be highlighted

Biofuels

The cultivation of suitable crops to produce biofuels is a path to energy security and energy autonomy of the country. The purpose is to value the marginal lands not subject to any lucrative agricultural activity by providing opportunities for sustainable income to the population without interference with food production programs.

The recently installed Haitian Government has chosen to open the markets to private investment and has shown a willingness to collaborate with the private sector in Public-Private Partnerships.

This approach will do the following:

  1. Fosters a mixed public and private market promoting competition and creating jobs while offering electricity access to the population.
  2. Involves the private sector in sales to the customer as well as electricity generation and grid management.
  3. Ensures the public sector regulates the electricity subsector, making sure the interests of the consumers as well as that of the service providers are protected.
  4. Makes financial credit available to the consumer for purchase of renewable energy technology.
  5. Results in jobs created and funds injected into the economy.

Incentives

Investment in the energy sector will also benefit from generous incentives provided by the investment code under the section "other sectors and special regimes.

Procedure to apply for incentives

Form "other sectors and special regimes"

How CFI can assist you:

The energy sector in Haiti has great potential for growth and investment. CFI can assist investors in learning more about opportunities in the energy sector. CFI acts like a hub to cross-reference agencies and entities in order to provide business and legal information to investors. CFI provides help to investors by facilitating site selection or enterprise installation, choice of professional's advisors, site visits, follow-up of the project until achievement.