Page 56 - CARILEC CE Journal CEMAY2021

AIM
The IUS Pilot Programme aims to test and illustrate that has not yet been sufficiently considered
proof-of-concept of several variations of an open regionally is the increasingly popular Energy Service
market platform and utility-based ESCO Model that Companies (ESCOs). ESCOs are an interesting vehicle
makes renewable energy (RE), energy efficiency (EE) for addressing regional energy security and EE
and demand response (DR) projects more accessible prerogatives. They advance EE enhancements that
to the average consumer. The Pilot Programme tests can generate energy savings in the long term for both
variations of the IUS Models in each member state businesses and domestic consumers and provide a
and its capacity to: structured means for coordinating and financing
sustainable energy projects.
1. Introduce a practical “delivery mechanism” for Despite the potential and the existence of regional
demand-side EE, RE and DR projects behind the demand for ESCO services, the ESCO Model has
meter in the CARICOM region in order to implement generally been hampered by its capital-intensive
energy policy goals. approach as well as the lack of capacity of existing
2. Facilitate a platform approach, which is open energy service providers to supply the broad range
to all qualified technology suppliers (not of skills needed to successfully implement a full suite
primarily the utility), which generates additional of projects under the ESCO Model. This, coupled with
business opportunities for project implementation. the lack of awareness, knowledge and trust in the
3. Finance up-front investments secured through ESCO Model, has impeded the growth and uptake
a regulated on-bill re-financing mechanism. of EE services. “Utility-based ESCOs” can play a
4. Enable utilities to extend their business models critical role as an intermediary between the energy
by providing energy services and scale up EE, RE service providers and (potential) clients to lower
and DR interventions. these barriers. They can help realise the latent and
5. Provide access to a regulated on-bill re-finance apparent demand for ESCO services and contribute
mechanism to different utility customer to achieving more sustainable energy uptake in the
segments voluntarily. region.
The IUS model offers the opportunity to secure
BACKGROUND critical financing and plug the technical capacity
On account of their status as Small Island Developing gap. In this way, the Caribbean region has the
States (SIDS), Caribbean nations face several chance to effectively address the energy trilemma
critical challenges, including energy security, – sustainability, equity and security. The shifting
disproportionately high reliance on imported fossil energy service paradigm in the region presents an
fuel energy sources, and limited access to affordable interesting opportunity for utilities to “bridge the
and reliable energy services in many territories. divide” and become a new energy service structure
Furthermore, relatively small populations and highly player.
fragmented, undiversified energy markets, intensify
the energy challenges experienced by many Member THE IDEA OF THE “UTILITY-BASED ESCO”
States. Utilities have an interest in replacing “lost revenues”
In a bid to address this confluence of challenges with new revenues from energy services. Moreover,
and respond to a rapidly evolving sustainable energy utilities also have lower cost of capital, economies of
landscape globally, many CARICOM governments scale to drive the volume required to attract outside
have initiated steps towards implementing RE partners and the institutional capacities required to
programmes. However, EE measures, which can carry out these programmes. Thus, it would be in
provide Member States with the meaningful utility’s best interest to be actively involved in current
opportunity to improve their energy security and ESCO pilot projects to test and implement possible
address many well-recognised energy challenges, IUS business models. The idea is to identify and
remain under-developed and under-utilised through describe an IUS model – and the respective variants
any measurable coordinated approach. thereof – for the CARICOM region capable of meeting
Many measures can be adopted within existing the needs of key stakeholders, including the utility,
legislative frameworks. One such mechanism customer, regulator, investors, technology partners

56