Action Plan - Euro-Caribbean Island Cooperation on Sustainable Energies

D 8.5

- St. Lucia -

Action Plan

OPET LATIN AMERICA (OLA) Caribbean Action Plan Future and Follow up Actions

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INSULA – International Scientific Council for Island Development Other Partners EREC - European Renewable Energy Council ICAEN – Institut Català d’Energia SODEAN- Sociedad para el Desarrollo Energético de Andalucía, S.A. AREAM - Agência Regional da Energia e Ambiente da Região Autónoma da Madeira Instituto para la Diversificación y Ahorro de la Energía CO-ORDINATOR Authors: Cipriano Marín, Alfredo Curbelo, Daniel Satué (2002)

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SUMMARY Cuba Cuba has many political and social policies which set it apart from other developing countries and which provide opportunities as well as challenges. Local investment in education and health, for example, has resulted in social development indicators that meet and even surpass those of developed countries. Recent attention to the development of institutions, laws, policies and capacity in the protection of the environment have been notable for a country pulling itself out of a severe economic crisis. There is a high degree of capacity to design and manage local projects, and projects based upon mutually supported goals are generally efficiently and effectively executed with significant impact.

Two main programmes make up the framework of the present energy scene. In 1993 the Council of Ministries and the National Assembly of the Popular Power approved the “Development Programme of National Energy Sources” (Programa de Desarrollo de las Fuentes Nacionales de Energía), whose bases are the increase of energy efficiency, exploitation and rational use of Cuban oil and the development of renewable energy sources. Huge importance is given to the biomass of sugar cane and all possible ways to use other renewable sources are included. Another significant fact is the approval in 1997 of the Law for the Protection of the Environment and it is necessary to emphasise the “Electricity Saving” programme. Both programmes aim to reduce energy dependence and minimise its impact on economy. Jointly with, and parallel to these programmes which determine a large part of the last years’ energy policy, there is the framework that regulates investment and operation of foreign bodies and companies, constituted by Law No. 77 de 1955, that establishes the juridical-economical reference procedure for project development, obviously including those carried out jointly with European bodies.

This exceptional Cuban situation, marked by its economical and political peculiarities, and the international isolation framework of the last decades have completely conditioned energy policy, putting the saving and management of the scarce primary source at the centre of all decisions and actions. This is shown by the surprising fact that the GDP Energy Intensity has been even decreasing. From the point of view of a sustainable energy development strategy, this necessity-marked attitude can be considered as positive, but it influences negatively when it is time to take leap toward a policy of maximum penetration of renewables as a logical solution, since, in this type of situations short-term strategies have priority on the need to plan in the medium-long term, as required by a renewables-addressed policy.

The OPET-OLA Caribbean meeting, held in Havana in November 2004 in the framework of the regional initiative EuroCaribbean RES Co-operation, together with the several missions carried out, allowed fulfilling a joint work with the main institutions, responsible people and experts, which main conclusions are collected in this Plan of Action.

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Focusing on the situation in Cuba, the following barriers can be pointed out for the setting up of renewable energy projects jointly with the European industry: •

• •

•

• • • • • •

The potential of renewables is conditioned by the need of short-term solutions vexing the present situation. This involves a certain institutional ignorance of or lack of interest in the possibilities offered by some renewable sources such as windpower, in comparison with more immediate solutions.

The structure and strategy of energy planning is strongly centralised within the administrative, political and legal systems, clashing with the local and sometimes very widespread character of many RET application.

Lack of renewable energy planning with a sufficient time scale for allowing the development of projects. In other words, there is a need for an immediate integrated strategy for renewables covering the different dimensions (technological, economic resources, regulatory) and clearly determining the role and possibilities of the different technological, investors and market stakeholders.

In the case of electric generation based on RES, there is not tariff framework that guarantees the payment of generated power to an independent producer (external to the UNE-Unión Eléctrica Nacional) that would stimulate the development of large-scale investments, giving the sufficient security and guarantees to the interested operators and manufacturers.

Insufficient development of national companies and clear definition of their role in the market of renewables.

Difficulty for foreign companies to establish direct agreements with local operators.

Administrative complexity for project development and establishment of agreement.

Lack of a clear definition of incentives.

Need for the development of technical and administrative legislation and regulations to create a favourable framework for RES. Important technological limitations derived from the present state of power generation plants.

On the contrary, there are certain conditions that make it possible for Cuba to show off their huge development of renewable energy: • • • • • • •

Growth of the demand and limited availability of non renewable sources.

Low quality and scarcity of the crude oil available. Increase of prices in the International Market.

Existence of plenty of renewable resources.

Isolation of the country, both for its condition as an island and for the international political situation.

Excellent training of Cuban professionals.

High scientific level of Cuban professionals.

High organisational and resource mobilisation planning capacity.

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• • • • •

Excellent level of coordination between responsible programmes and institutions.

Checked rigorous capability to follow up projects.

Favourable attitude of the experts with responsibility in administration in Cuba.

Highly favourable expectations for foreign companies/enterprises.

Existence of a portfolio of viable and well analysed projects that can constitute the basis for the large-scale take-off of renewables. Within this portfolio of projects there are major opportunities for the development of windpower and cogeneration, exploitation of biomass, biofuels, hydropower, as well as new market niches for solar market, such as the tourist sector. (Annex 1 Cuba Portfolio).

St. Lucia The main reference for energy policy in St. Lucia is the Sustainable Energy Plan (SEP).

It was developed in response to St. Lucia’s commitment issued at the 1998 Conference of Parties (COP5) to become a “clean energy demonstration country.” The National Energy Policy establishes the goals and procedures for the energy sector in St. Lucia. It defines the priorities for the development and operation of a cost effective and reliable energy sector, while balancing the affects on the national and global environment. This policy applies to all energy use and related aspects in the nation of Saint Lucia.

Among the main advantages of St. Lucia is the existence of a regulatory framework favourable to RES implementation and to the creation of a strategy of energy sustainability, developed as an essential side of the Sustainable Energy Plan of St. Lucia.

Its main elements are: • Development of the Renewable Energy Portfolio Standard (RPS) • Development of Policies to Enable Auto-Generation (or Co-Generation) • Development of Policies to Enable Independent Power Production • Establish Renewable Energy Regulations and a Regulatory Authority • Development of Solar Hot Water System Tax Relief Policy Beside a good regulatory framework there is a portfolio of projects containing outstanding initiatives such as a major geothermic exploitation and the first wind farm of the island, which has already been subject of public bidding.

Among the main barriers which have to be faced for a favourable cooperation with the European industry there are: • The scale of the projects • The state of infrastructures • Ignorance of the possibilities offered by the European industry and market, a general problem within the CARICOM area.

• Limited technical training.

• Lack of project developers.

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•

Insufficient availability and management of relevant energy data.

The presence of these scenarios brings to the conclusion that there are very good possibilities to develop projects in the area, as it was made clear in the framework agreement contained in the EuroCaribbean RES Co-operation Memorandum.

The European Union at present is one of the world main research and development centres dealing with renewable energies and efficient use of energy, as well as one of the major supporters of policies and programmes aiming to foster their introduction in the energy system. This has allowed developing during the last 10 years an European industry that is world leader in these fields, and with an growing capacity to increase the presence of these new technologies in the international energy market (the enclosed Annex 2 – Info ICAEN contains a general view of the subject).

For this reason the experience accumulated by the EU, especially after the ratification of the Kyoto Protocol and the development of CDM, can now develop a big market niche and open areas for cooperation in the above context, also taking into account that islands are always the international candidates to become Sustainable Energy Communities.

Overcoming the above barriers to create a favourable framework is certainly possible and realistic. In this sense, and following the spirit of the EuroCaribbean RES Forum, it cannot be forgotten that Caribbean islands and the states they represent have always to be considered as a whole, making up a scale and area of considerable size.

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INDEX 1. Introduction ....................................................................................................... 8 2. Biomass for Power Generation 2.1. Context ....................................................................................................................... 9 2.2. Identification of Barriers ..........................................................................................10 2.3. Action Plans and Lines of Future Actions ................................................................11

3. Waste to Energy (Biogas) 2.1. Context .......................................................................................................................12 2.2. Identification of Barriers ..........................................................................................13 2.3. Action Plans and Lines of Future Actions ................................................................13 2.4. St. Lucia Oweview ....................................................................................................13

4. Transports-Bio-fuels (Ethanol) 2.1. Context .......................................................................................................................14 2.2. Identification of Barriers ..........................................................................................14 2.3. Action Plans and Lines of Future Actions ................................................................14 2.4. St. Lucia Oweview ....................................................................................................15

5. Wind Power 2.1. Context .......................................................................................................................16 2.2. Identification of Barriers ..........................................................................................18 2.3. Action Plans and Lines of Future Actions ................................................................18 2.4. St. Lucia Oweview ....................................................................................................19

6. Solar (PV and Thermal) 6.1. Context .......................................................................................................................20 6.2. Identification of Barriers ..........................................................................................21 6.3. Action Plans and Lines of Future Actions ................................................................21 6.4. St. Lucia Oweview ....................................................................................................22

7. Hydropower 7.1. Context .......................................................................................................................23 7.2. Identification of Barriers ..........................................................................................23 7.3. Action Plans and Lines of Future Actions ................................................................23 7.4. St. Lucia Oweview ....................................................................................................25

8. Geothermal (St. Lucia) 8.1. Context .......................................................................................................................26 8.2. Identification of Barriers ..........................................................................................26 8.3. Action Plans and Lines of Future Actions ................................................................26

9. Tourim sector, energy-water binomial and 100% RES initiatives. .................... 28

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1. Introduction The preparation of the Market Outlook Report, corresponding to Deliverable D3.1 of the Workpackage IA5 on Caribbean lead to the characterization of the current situation regarding a number of target technologies and renewable energies: energy efficiency, biomass for power generation, biofuels, waste to energy conversion, wind power, solar, cogeneration. The Market Outlook Report included for each of these areas the identification of the current legal and technological situation in Cuba and St. Lucia as well as barriers that currently prevent a deeper development of these areas, ultimately leading to a more sustainable development, as well as a stronger penetration of EU technologies in the Caribbean.

Having characterized the current situation and identified the main barrier, this document enlarges the analysis regarding the barriers and presents possible lines for future actions to remove these barriers. This identification and analysis is done per target area, meaning that after this introduction, this document includes seven chapters each one devoted to a specific technology or renewable energy.

Apart from the proposal of future actions to remove the identified barriers specific of each renewable energy technology target, this document also includes in chapter 9 specific considerations related with actions within the tourist sector, water-energy binomial and 100% RES actions.

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2. Biomass for Power Generation 2.1. Context Sugar industry is the main source of renewable energy for electricity generation in Cuba. The Bagasse (crushed sugar cane) exploitation for energy production purpose plays an important role in the electric production system of the island, reaching 600 MW (930 GWh) in 2002. In the same year, 26.2% of the primary energy consumed in Cuba came from this source.

The use of biomass is focused on the electricity generation of heat supply for industrial purposes and cooking. In fact, the sugar industry produces around 73% of the energy that is consumed.

There are currently 72 sugar mills interconnected to the national grid that receive and consume electricity from this utility. Estimated cogeneration levels during sugar cane production average 27.8 KW/milled sugar cane tonnes, accounting for nearly 98% of total energy consumption during this production.

But, for a better exploitation of the existing potential, there is an urgent need to improve efficiency, through reinstallation and new turbo generators, as well as substitution of boilers and accession of new ones. Another good possibility of energy exploitation within the process of modernisation of the Cuban sugar industry lies in the possibility to produce alcohol as fuel, and its potential export.

There are other biomass products available: wood (3 million square metres annually), rice shells and in lesser quantity: sawdust, wood shavings, coffee bran, coco rind, among others.

Biomass potential in Cuba Energy potential ktoe/year 2,800 490 280 1,110 61 4,741

Husks of sugar cane Rests from cane harvesting Biogas production Wood Charcoal Total potential

2.2. Identification of Barriers Energy exploitation from biomass, in particular from sugarcane, is a basic feature of the national energy system, although an appropriate exploitation of its full potential has to face several barriers such as:

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• • • • • •

Technological obsolescence, in particular with regard to boilers, drastically limiting the efficiency of the system.

Lack of synchronisation between sugar plants.

Isolation of several plants within the national electric system.

Financial difficulties related with technological renovation, in particular regarding co-generation possibilities.

Problems regarding sugar commercialisation and low prices in the international market, which affect the profitability of this trade unit.

Lack of a concrete specific and clear framework for possible foreign operators, with regard to both technological and electric supply, as well as the tariff framework, with the reference of Law 77 of the Republic of Cuba.

2.3. Action Plans and Lines of Future Actions The strategy to follow passes through remodelling of the sector and introduction of an integrated concept of energy - sugar biomass. It involves: • Remodelling the Energy Basis existing in the Sugar Mill; and • New Co-generating Power Plants annexed to Sugar Mills.

The Energy Basis Remodelling projects consist of increasing sugar production energy use efficiency, enhancing steam and electricity cogeneration efficiency, and consuming sugar cane harvest wastes in sugar mills. All this is intended to have steam generating capacities from bagasse left from sugar cane production time. Such capacities together with left biomass would help generate electricity in a condensing turbine generator with all-year operation capacity. Surplus electricity would be delivered to the National Electricity Utility (SEN).

The New Electricity Cogenerating Power Plants proposed, consist of Power Plants designed for all-year operation, using sugar cane biomass as a main fuel that may be complemented with forest wastes or other local biomass available. These power plants must be adjacent to sugar mills in order to meet the heat and electricity demand required for sugar cane production, and in turn receive sugar cane biomass during harvest time, surplus electricity being sold to SEN. When sugar cane harvest time is over, these power plants would sell heat and electricity to existing by-product production and buy sugar cane biomass or other biomass to be used as fuel, according to their needs.

Within this framework, two objectives are outlined: Decrease of steam consumption from sugar production at levels of 320 kg/tcm or less.

• Increase the thermal efficiency of the steam generators from 85 to 90% for decreasing the fuel indexes (fibre) at levels of 2.2 t vapour/t fibre (50% moisture).

• Applying cogeneration all year in new installations, with conventional and advanced technologies like gasification – gas turbine – combined cycle (using co-generation groups of an average of 50MW).

• Advance towards an integrated energy-sugar concept with maximum efficiency: cogeneration, self-consumption and alcohol production.

•

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To undertake this programme, three new power plants between 20 and 40 MW (88 MW en total) and three more projects dealing with Energy Basis Remodelling, for a total of 27 MW (energy efficiency, and enhancing steam and electricity cogeneration) have been identified for a first implementation phase.

So as to achieve the Power Development Programme long-term objectives, 34 sugar mills have been selected for electricity cogeneration projects, the mills installed capacity being estimated to increase in some 1,000 MW, consuming biomass as a fuel and operating throughout the year.

Other lines of action under way, related with this field, are: • Use of energy plantations as a basic source in specific sectors, and integrated projects such as the one on Isla de La Juventud. • Improvement of efficiency in the exploitation of wood biomass (pellets).

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3. Waste to Energy (Biogas) 3.1. Context Biogas applications in Cuba are divided in two large sectors: a) energy exploitation from fermentation of agro-industrial wastes. b) energy exploitation from treatment of Urban Solid Waste In both cases the environmental component is a priority factor for the implementation of these solutions, to eliminate polluting wastes of the agro-industrial sector, or to guarantee degasification of rubbish dumps in urban areas. All the above of course is in addition to the small domestic applications that are operating even since 1990. The major advantages of biogas are: farm sanitation; waste treatment; production of organic fertilizers; and use of biogas as possible cooking fuel.

Energy valorisation of Urban Solid Waste is a common practice all over Europe where EU Directives and legal regulations oblige waste reduction. This experience can and must be of utmost importance at the moment to establish cooperation initiatives within this sector in the Caribbean area, linked to the new idea of clean and sustainable city.

With regard to agro-industrial waste exploitation for biogas production, the following processes stand out: a) biogas production starting from vinasses of alcohol distilleries. b) bio-metanisation of liquid wastes of sugar production. c) biogas production from livestock waste, such as pig manure.

Cuba relies on several experimental plants working in these fields, including plants having an industrial production capacity using UASB-type reactors, such as the Heriberto Duquesne plant.

Peculiarly, biogas use not only minimises domestic services and kitchen needs, but also allows covering the acetylene deficit. As an added advantage, it can be considered that the level of technological know-how in this sector is really high.

3.2. Identification of Barriers • • •

Priority-related problems for the integral development of biogas in the agroindustrial sector, within the national context.

High investment requirements for industrial plants.

Limited availability of advanced technologies regarding control systems.

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3.3. Action Plans and Lines of Future Actions The strategies and lines of action set by MINAZ (Ministerio de AzĂşcar) are fundamentally based on the promotion of UASB reactors in the agro-industrial plants with a high potential of energy valorisation, and in particular including this strategy in the integral concept of bioenergy exploitation of agroindustrial waste, including bagasse exploitation for power generation.

Another big working front regards the energy valorisation of urban solid wastes. On this line, the energy authorities of Havana have selected a far-reaching reference project. The dump currently in exploitation at Guanabacoa, in eastern Havana, is depleting and in poorest sanitary conditions. Therefore, they were engaged in the construction of a new dump, in order to replace the older one. The new dump to the East will contain approximately 300 daily tonnes from Eastern Havana, Regla, Guanabacoa, San Miguel Municipalities. That anticipates that the dump energetic recovery will be economically viable.

Experiences and studies evidence that methane proportion will be over 50%, the other biogas components being Carbon Dioxide, Nitrogen, Oxygen and other components to a lesser extent. The estimated Equivalent CO2 reduction on the basis of CH4 nonemissions for this reference project is 176,000 CO2 tonnes/year. European experience can be very significant for this project.

The segment of possible European technological transfer that is still to be evaluated regards gasification and pyrolisis of urban solid waste.

3.4. St. Lucia overwiev In St. Lucia the situation regarding biogas is quite different. The use of biogas is known in St. Lucia. During the 1980s several farmers exploited biogas to satisfy a portion of their energy demand. Over the years, the German agency GTZ, through the Caribbean Development Bank, has provided assistance to selected enterprises in St. Lucia. Biogas, however, cannot make significant contribution to the national energy situation, but can improve the performance of the agricultural enterprises where digesters are located.

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4. Transports-Bio-fuels (Ethanol) 4.1. Context The Cuban sugar industry has the potential to produce significant quantities of ethanol by fermenting sugar cane wastes or bagasse. The crisis in the sugar industry that saw a gradual fall in sugar exports and the price of sugar on the International Market, offers an excellent opportunity to convert part of this output into energy crops.

According to MINAZ and CETRA (Centre for Transport Research and Development), the energy that could be produced from converting some of these resources into ethanol would make it possible to open up two new essential fronts for renewables and for reducing energy dependency: a) Replace petrol with ethanol with a progressive conversion of the fleet of vehicles, thus generalising the use of ethanol in the domestic collective and freight transport system. b) Open up prospects for a possible export of ethanol as an automotive bio-fuel to other countries, that is, change part of the sugar exports for the energy version of the same product.

In this context, it is worth remembering that the European Directive (2003/03/EC) on the use of bio-fuels and other renewable fuels predicts that bio-fuels will account for 5.57% of overall fossil fuel consumption in EU-25 by 2010, some 50 billion litres a year. This estimate is based on the verified consumption of bio-fuels in 2001. Current European production does not even reach 5% of this amount, so, unless EU Member States just ignore the Directive, it will be impossible to reach the minimum target values required.

4.2 Identification of Barriers The enormous potential presented by harnessing this energy vector faces a series of technological, financial and trading relations related problems: • The obsolescence of the current fleet of collective transport vehicles. • Need for investment to develop the industrial production of ethanol. • Lack of a market framework and fluid relations to establish processes for striking long term commercial production agreements with Europe. An essential condition for addressing these initiatives on a suitable scale.

4.3. Action Plans and Lines of Future Actions Concerning the replacement of petrol with ethanol in the transport system, it has been decided to address this transformation by starting with an initial pilot project with a very high possibility of being replicated:

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Most of the urban transport vehicles are currently diesel-powered but they can be converted to ethanol with a series of technical modifications to the engine and the fuel and air supply systems. The pilot project consisting of converting this 50-vehicle fleet can be carried out within a year. The project will not only provide cleaner transport in the city of Havana; it will also be a pilot project for assessing the potential for larger scale ethanol-substitution programmes in Cuba.

The project also provides other benefits: • Substituting ethanol for gasoline in an internal-combustion engine reduces CO2 emissions by 50%.

• Pure ethanol is a clean burning fuel, thus considerably reducing vehicle emissions other than CO2. Therefore, this project will improve air quality in urban areas where these vehicles are used (e.g. CO2, NO2, HC, SOx, etc).

• Creating an alternative fuel fleet reduces Cuba’s dependence on imported fuel oil, availability and fluctuations in market prices.

• It generates short term employment and development opportunities for people specialising in converting vehicles to ethanol.

The co-operation relations and opportunities for technological co-operation with Europe could play an important role in this strategy with the mid term introduction of more advanced engines for transport systems; engines that also use these fuels (hybrid vehicles, for instance). We would like to stress that the tourist areas could be a really important niche, both as a demonstration area and as a market for these applications, given the fact that innovation is readily accepted, as are the financial capacities that innovation generates.

With regard to the export of ethanol as a bio-fuel, the top priority line of work lies in making the appropriate explorations for establishing a suitable commercial framework, with sufficient guarantees to tackle the projects. The line of industrial technological cooperation with Europe, however, is more limited as cheaper technologies are available on the market, such as Brazilian technology.

4.4.St. Lucia overwiev The case of St. Lucia is quite different. The available amounts of biomass are quite small for undertaking bio-fuel strategies of some magnitude. On the other hand, forecasts of the island’s Sustainable Energy Development Plan set the need for a specific strategy of sustainable mobility and clean transport, considering the tourist areas as preferential for pilot projects. European experiences and products in the area of the implementation of hybrid or electric vehicles can be clearly replicated in this context. With regard to fuel-cells, in both cases, perspectives should be considered in the medium or large term. The European experience in sustainable mobility

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5. Wind power 5.1. Context In Cuba before the 1990s, there were very few precedents of wind powered electricity generation and mechanical applications. Small wind turbines were used at remote sites to charge batteries. Small wind farms based on multi-blade or low-power mills are another field of interest, although with a lower energy repercussion. Windmills have historically been used in Cuba as a solution for providing a water supply for livestock.

After carrying out a recovery policy with the support of CUBASOLAR, nowadays there are more than 8,000 wind generators working in almost all the provinces. Classic multiblade mills were manufactured at the Bayamo plant, and a study has been started for the development of new models, both for water pumping and for producing electricity.

In 1999, the Demonstration 0.45 MW wind farm at Turiguanó Island was installed and commissioned, becoming the first experience in this field. In the area of resource evaluation, the Weather Bureau has drawn up a Preliminary Wind Atlas of Cuba, which, in general terms, suggests that there are some interesting regions from the point of view of wind power. The wind surveying done in 1991-1994 (INEL-InsMet-CETER) and 1994-1998 (INEL-EcoSol) showed the viability of harnessing the wind for large scale electricity generation in several areas.

Between 1991 and 1998, wind resources were partially assessed at 24 sites. In advantageous zones of the northern coast from Villa Clara to Guantanamo, a conservative forecast indicates that at least 400 MW of wind power could be deployed.

The best wind power prospects, taking into account the structure of the grid and the suitability of isolated areas of consumption (especially tourist areas), are to be found in the north, Cayo Coco, Cayo Largo and on Isla de La Juventud. Cayo Coco and Cayo Largo are micro-tourist areas not connected to the grid and with a high wind potential, features that makes it possible to give them a different treatment with clear opportunities. The case of Isla de La Juventud is different, since the evident wind power possibilities are combined with a 100% RES integrated local development project clearly aiming at future tourist development.

Finally, the Occidente (western region) shows very good wind power possibilities, but on a different scale. Unlike the previous cases, here we can talk of wind farms of more than 30 MW that would also bring stability to the national distribution grid. Of all the locations, the ones with the best potential for this area are: • Northern plain between Bauta and Baracoa (Havana Province); • From Rincón de Guanabo to Boca de Jaruco (Havana Province); • From Punta del Inglés to La Cumbre (Matanzas Province).

A major advantage to be taken into consideration in the case of the large facilities of western region is that the developments in wind technology now provide wind generators that are suitable for working with network extremes, providing these networks with stability.

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In comparison with the high capacity and the availability of know how in other areas, like energy efficiency in industrial processes, or solar applications, the possibility of harnessing wind power as a resource on a large scale has only been given consideration on the island very recently. That is why this field is a preferential area for opening up new fronts in co-operation with European industry and institutions, where the state of wind technology and its implementation in different situations is currently on the very cutting edge of technology.

Cumulative Wind Energy Installed Capacity (Source EREC) 45000 40000 35000 30000 25000

MW

20000 15000 10000 5000 0

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

European Union

439

629

844

1211

1683

2497

3476

4753

6453

9678

12887

17315

23098

28440

World

1743

1983

2321

2801

3531

4821

6104

7636

10153

13594

17357

23857

31228

39294

Average Wind Turbine Size Installed Each Year in EU (Source EREC) 1200 1000

600 400 200

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2002

1998 1999 2000 2001

1993 1994 1995 1996 1997

1989 1990 1991 1992

1986 1987 1988

0 1982 1983 1984 1985

kW

800

5.2. Identification of Barriers The enormous potential of harnessing this energy vector faces a series of technological, financial and trade relations related barriers: • A detailed inventory of the most viable wind locations must be completed and final measurements taken to assess the viability of different sites.

• For the moment, the technical resources for lifting and installing high power wind generators are limited.

• To date, the proposals for wind farms are isolated proposals, rather than forming an integral part of a development programme, with a systemic approach and strategic scope.

• Lack of a tariff and regulatory framework that would guarantee payment for the energy generated for an independent producer (independent from UNE-Union Electrica Nacional) and that would stimulate large scale investments, given sufficient security and guarantees for interested operators and manufacturers (a problem that is common to all RES based electricity generation solutions, but especially so for wind power).

• The very top technical and political decision-making levels are not clear or undecided on recognising the true potential of wind power and its possible impact on the national electricity grid system.

5.3. Action Plans and Lines of Future Actions The development of wind power in Cuba is one of the most serious decisions about the country’s energy future, especially if one considers its delicate situation of energy dependency and the current level of oil prices in the different markets that supply Cuba.

In sequence, the Basic lines of action to guarantee an acceptable development of wind power in Cuba, based on its potential, would be as follows: • • • •

Complete the Feasibility Studies and the measurement programme in the preferential sites in the areas considered as optimum in the first stage of these Works: Occidente region, Cayo Coco, Cayo Largo and Isla de La Juventud.

Define the terms and conditions of the regulatory and tariff framework.

Reach an agreement with UNE on the conditions for selling the energy to the local grid within the regulatory framework.

A precise definition of the funding, ownership and operation scheme to be applied to each investment.

These requirements would enable us to establish the final business terms and conditions for implementing the projects with European operators que ya han mostrado su interés.

In this phase, we consider it vital to design a package of projects that exceeds 30-40 MW, an appropriate scale for mobilising the logistical and financial resources and requirements that an operation of this kind needs.

More specifically, we consider it important to bear in mind the following aspects in the chosen areas:

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a) analyse the chances of increasing the wind power share in the Isla de la Juventud development project, evaluating the accumulation aspect. b) possibilities of linking the wind power operation of Cayo Coco and Cayo Largo to the tourist industry.

5.4.St. Lucia overwiev Studies in St. Lucia suggest that areas of moderately high wind speed exists on the island, especially at the exposed locations on the windward coat of the island, and in particular at the northern and southern extremities, where the prevailing wind flow has been diverted around the central mountain range. The Government of Saint Lucia and the Saint Lucia Wind Power JV, a joint venture formed by Probyn Company of Toronto, Canada and York Wind Power of Montreal, Canada has completed an assessment of wind potential near the East Coast of the island.

Based on the results of this one-year continuous wind resource assessment, the Government of St. Lucia has submitted a proposal to construct a 13.5 MW wind farm to LUCELEC. LUCELEC has expressed interest in purchasing wind generated power from wind, provided that the cost of power is below existing variable costs (i.e. the fuel cost of generation), and that no investment by the utility is required. This proposal is an excellent reference for wind power actions in island systems, because if wind conditions are good, the proposal will be highly competitive.

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6. Solar (PV and Thermal) 6.1. Context Solar radiation in Cuba is around 5 kWh/m2/day, practically all the year round, that involves an excellent potential for solar energy applications.

Solar thermal collectors have been very extensively used in Cuba, since the 80’s, and an important number of them have been installed in schools and other places of social interest. There is therefore an accumulated experience with regard to the installation, reaching the present number of 5593 solar panels systems (350 medical rural centres, 2344 schools, 5 hospitals, etc.). Nevertheless, with a view on market potential, it is the tourist sector where the better possibilities have been detected.

In Cuba, solar systems started being massively commercialised by EcoSol and Rensol in 1993, and they were built using flat collectors either imported or manufactured/assembled in the country. More recently, with the support of CUBASOLAR, high-efficiency collectors, more suitable to local climatic conditions, started being produced using high quality materials. They are commercialised by EcoSol and produced by EICISOFT. Present perspectives of solar thermal market growth are particularly centred in the hotel sector, due to the economic advantages that their use in water heating would bring, substituting electric heaters.

Although windpower and hydropower can be used in areas non-connected to the electric grid, as it happens in Cuba, the most generalised technology used worldwide in these cases is solar photovoltaic. World photovoltaic market shows a constant and sustained yearly growth of about 33% since 1996. Forecasts indicate a growth of 27% until 2010 and of 34% during the following decade. European photovoltaic industry represents at present 26% of world total market, and thanks to the supporting internal policies of several countries, it is expected to reach the position of world leader by 2020, when the cost of photovoltaic modules will be around 1 US$ per Wp (source: EPIA).

Decentralised electrification through photovoltaic panels allows introducing the concept of integration at different levels. On the one hand, the installation can be designed in such a way to exploit different energy sources and combine them in the same “hybrid� kit. On the other hand, electrification can be integrated with other services sharing installation works (drinking water and sewing networks...) and can integrate applications in different sectors such as social sector (schools, health centres, communications...), production (water pumping, equipment for workshops...) and residential sector (lightening, electric devices, etc.).

There is enough experience accumulated regarding solar PV in Cuba, since there is a plant for the assemblage of modules and a few programmes of PV electrification have been developed, which allowed electrifying, until this moment, more than 350 medical centres, 2364 primary schools, 1864 TV rooms, and 150 social centres.

20

The plant for the assemblage of photovoltaic panels is called “Combinado de Componentes Electrónicos (CCE) de Pinar del Río”. It established an economic agreement with a German company that produce silicon solar panels. This plant has been producing panels of different sizes, from 5 Wp to 65 Wp, and they are also produced on demand for specific applications. At present this project is having a few problems related with cell availability on the market.

Then the country has nowadays both capability and experience for assemblage of photovoltaic panels, beside their installation and maintenance.

6.2. Identification of Barriers The big possibilities shown by an appropriate exploitation of this energy vector have to face some technological, financing and commercial barriers: • Difficulty of access to lines of credit and administrative complexity.

• Serious problem regarding cell availability on the market and price increasing, that obliged to slow the PV panel assemblage industry.

• Lack of awareness by those productive sectors with higher investment capabilities such as tourism with regard the implementation of solar systems.

• Lack of specific regulations supporting either passive or active solar solutions in buildings.

6.3. Action Plans and Lines of Future Actions Several actions are aimed to the consolidation of this sector growth and the search of new market niches that would help this growth: Starting from a solid experience in solar thermal panel construction, assemblage and commercialisation (of both local and foreign units), as well as the existing good professional experience, the Ministry for Foreign Investments and Economic Cooperation (MINVEC) and the Ministry of Science and Technology (CITMA), promoted one line of projects based on solar application in the tourism sector, with great possibilities within the Cuban accommodation sector.

Managing systems for installations of energy distribution and final consumption equipments are another field with good market perspectives and interesting possibilities of cooperation with the European industry, particularly in the industry sector, since they can bring important reduction of energy and maintenance costs. The European market offers informatic tools and equipments able to carefully follow up the demand in different consumption points, as well as managing the start and stop of equipment according to an established daily or weekly time schedule, allowing the optimisation of its functioning.

Initiatives aimed at solar development in different sectors could be favoured by the implementation of a solar regulation for buildings, particular addressing residential and tourist sectors.

21

With regard to lines of financing support it has been proposed to create a line of credit of 1 M € within an institution of the National Bank, whose aim would be to co-finance investments in solar collectors, giving credits to be paid back in three years with an interest lower than 10%.

It is very important, due to the constant development of electric solar applications (Solar PV) maintain and enlarge the existing contracts of cooperation production with Germany and Italy, and recently with the Spanish ISOFOTON S.A., cooperating with ECOSOL SOLAR, to guarantee the continuity of the assemblage plant of Pinar del Rio. It has also been agreed a contract for exporting to Japan and Venezuela.

6.3.St. Lucia overwiev In spite of the important growth of the solar sector in St. Lucia, its potential is still unexplored, if we compare it with the neighbouring island of Barbados, where in the year 2000, about 32,000 solar water heaters were installed. It was projected that if each one saves 4,000kWh per year, the total electricity saving would be 128 million kWh. Recently, the Government of St. Lucia has taken steps regarding incentives to promote the use of SWHS. Recent increases in the price of electricity would have a further positive impact on demand for solar water heaters. Although the contribution of solar energy into the total energy mix at present is limited, it is important to show a commitment to alternative technologies by: • exploring possibilities to provide soft loans for their installation as the initial cost of SWHS is high; • creating incentives for consumers to retro-fit electric water heaters to solar by installation of panels; • making the building codes mandatory for all new building to make provision for the installation of SWHS; and • providing incentives to SWHS manufacturers.

To ensure that the SWHS, whether manufactured in St. Lucia or imported, meet the minimum performance standards, an appliance testing facility should be established at the Saint Lucia Bureau of Standards (SLBS) and should include facilities for testing the capability of solar water heaters. The engineers and the installers involved in SWHS should be trained and guided to provide better and reliable service.

22

7. Hydropower 7.1. Context Cuba has approximately over 169 hydroelectric plants in operation that have been built through the years by the National Institute of Hydraulic Resources (INRH). The estimated hydro potential is of about 650 MW. At present only 54.7 MW are exploited.

The farthest-reaching project was a plant of 360 MW to be built at Toa-Duaba, that has been annulled for its environmental impact. Nevertheless, the inventories made indicate that in existing reservoirs and run of river small hydro is possible to build 270 MW. INRH is currently generating almost 2% of total electricity produced in Cuba.

Hydropower exploitation in Cuba is mainly related to development in rural and mountain zones, and it is therefore important to maintain economic and productive activities in these isolated areas. In the 80’s small energy exploitations increased greatly in these areas.

Dams that have been built with agricultural or environmental regulation purposes, can host an ensemble of new units according with the following categories: • Micro-hydropower units • Mini-hydropower units • Small hydroelectric plants They would represent, as a whole, an installed power of 52 MW, generating 210 GWh/year.

7.2. Identification of Barriers Although it is not determining at a national level, the exploitation of this source is territorially and strategically very important, and it is at present restrained by the following barriers: • obsolescence of plants, with its inefficiency cost to support.

• geographical dispersion of exploitations.

• non-connection to the grid in many cases.

• high maintenance and operational costs, in terms of personnel cost, basically determined by the age of installations.

7.3. Action Plans and Lines of Future Actions The objective targeted by the INRH is to increase the share of hydropower within total electric production from 2% to 5% in upcoming years. The following stages have been planned to carry out this strategy: • inventory of available exploitations.

• technological and economic analysis.

• proposal of priority projects.

23

INRH has six dams ranked as having higher probabilities to guarantee water all through the year, and 30MWcapacity hydroelectric plants with an estimated annual 118 GWh generation could be installed there. Other 50 projects are in different preparation stages.

These hydroelectric plants are intended to be connected to the National Electricity Utility (SEN) in order to supply electric power to those areas where SEN has not reached. Being located in line ends, these projects account for electricity loss reduction and improve the technical parameters of the microcircuits they are connected to.

Priority projects are mainly localised in the Santiago de Cuba Province, in southern Sierra Maestra National Park, where there is trained personnel and pre-feasibility studies for two projects (Peladero I and II) have been conducted, with a total 10MW capacity. The main goal is to guarantee electrical power from renewable sources and turn this zone in the National Park into an “ecological municipality” (Guamá Municipality). Likewise, INRH has assessed the feasibility of developing other four projects in the same area, providing an approximate additional 20MW capacity. These six hydroelectric plants have been conceived as part of a subsystem, so they will share infrastructure and transmission lines.

Nevertheless, there is a field that is worth great attention, where European cooperation, both in terms of technology and experimental replication, would have particular importance. It would involve considering hydropower as a storing vector (reversible pumping) to increase penetration of other renewable energy sources (windpower in particular). This is also one of the most important innovation vectors in the European context for isolated areas and islands (100% RES projects– Madeira, El Hierro….) and can be a basic element in the design of emerging projects of this type in Cubasuch as the case of Isla de la Juventud.

24

7. 4. St. Lucia overwiev St. Lucia relies on an old experience for the exploitation of this resource. A small hydropower station on the Soufrière River (50 kW installed capacity) was damaged during a storm in 1977 and taken out of service.

A desk study completed in 1982 recommended that the hydropower potential of the Millet (120 kW), Vieux Fort (260 kW) and Troumasse (160 kW) Rivers be examined. It is believed, however, that the hydropower potential of these rivers is limited because of: • intensive deforestation and cultivation in watershed areas; • low flows during the dry season; and • high sedimentation.

The above circumstances strongly limit the possibility to set programmes of interest aimed at microhydraulics development.

25

8.1. Geothermal (St. Lucia) 8.1. Context Due to its volcanic origin, St. Lucia is one of the Caribbean islands with a potential for the energy use of this resource. Geothermal energy is already used successfully in Guadeloupe (4.6 megawatts), and there is potential for similar projects in Grenada, Dominica. Over the years, Government has taken several initiatives to develop these resources in St. Lucia. Several exploration programs have been carried out during the last two decades, funded by U.S. and European companies and the United Nations. The drilling explorations have confirmed the presence of a geothermal resource capable of supplying electricity to the national grid. However, no adequate determination of feasibility is currently available.

The major geothermal manifestation on St. Lucia is within the Qualibou caldera, east of the town of Soufrière on the south-western coast. This prospect has been drilled, investigated and studied by various consultants and specialists. The studies indicate a deep-brine holding reservoir with temperatures in the range of 200-250°C, and possibly as high as 350°C, deeper than 1,000 meters below the surface. Exploratory drilling into this reservoir is now required, and there is general agreement that at least three production size exploratory wells should be drilled to a depth of 1,500 meters. Future developments depend on the results of this drilling. However, all the studies seem to agree on a geothermal potential in excess of 10 MW. No substantial work had been carried out on this project for several years but following an agreement signed in February 1999 between Government of St. Lucia and the Compagnie Francaise de Geothermie (CFG) assisted by the Frager Energie Company and staff from the Massachusetts Institute of Technology (MIT), work commenced on a review of the previous geothermal surveys conducted in Saint Lucia with a view to identifying opportunities for the development of a geothermal power plant of the same type as the Bouillante plant in Guadeloupe, including the identification of any environmental constraints to realizing the development.

8.2. Identification of Barriers The main and only barrier that in some way hinder the development of this type of project regards the fact that the only viable location is within the Qualibou depression, a very important area from a landscape point of view, environmentally protected and with a high tourist interest. The projects should therefore combine its design with a minimum impact on the area.

8.3. Action Plans and Lines of Future Actions Perspectives for the exploitation of this resource, that would mean a very important contribution of renewables as a basic source within the electric system, are centred in only one plant for electricity generation purpose, located in the Qualibou depression.

The Project is conceived in three phases which are: an initial exploratory phase, a 26

development phase and an implementation phase. At the end of the initial exploratory phase, a decision will be taken on the continuation or not of the project, depending on the results obtained. The anticipated cost of the initial exploratory phase, including additional survey work, exploratory drilling and project management is 4.2 Mâ‚Ź.

The project consists in 5MW plant with an estimated production of 43800 MWh/yr. Its operational starting would mean an equivalent reduction of 7885.15 tons CO2.

27

9. Tourism sector, energy-water binomial and 100% RES initiatives.

There are three important emerging market niches where RET European Industry and the experience accumulated for its implementation in the different sectors can play an important role.

RES and Sustainable Tourism Replication and transfer of experiences in the tourist sector in the line of the integration of RES in Sustainable Destinations. Experiences such as Green Hotels (MadeiraAREAM), Biosphere Hotels (Lanzarote) show the possibilities of cooperation and technological and process transfer following the idea of sustainable tourism development.

Taking into account that in a next future the qualification of tourist destinations, and in particular island destinations, would necessarily take into account environmental responsibility and rational use of resources as basic requirements, an important field of cooperation with the European experience is opening, especially if we consider that an important share of the investments in tourism comes from the EU. Green Hotel Scheme (AREAM)

28

These experiences of RET integration can be can be complementary to other instruments that have also been successful on European islands, such as the application of certifications, like the “BH� by the Responsible Tourism Institute, which include energy efficiency and use of renewables among their basic requirements. The existence of instruments such as the Energy Efficient Building Code (EEBC) of St. Lucia, makes this kind of partnership particularly easy.

The binomial energy-water Although it is apparently surprising, another emerging sector that will soon stand out regards the binomial water-renewable energies. Especially in Cuba, the southern part of the island is increasingly experiencing water shortage due to persistent droughts.

Desalination will be a real fact in a not-too-far future and under more favourable conditions, especially because European technology is reaching limits of 3.5 kWh/m3 of produced water through the inclusion of isobaric chambers to the reverse osmosis (RO) process. The water-renewable energy binomial is here facing an ample field to develop.

100% RES Projects The Isla de la Juventud, an island located southwest of the main island, is the second island in the extension of the Cuban archipelago, with a population of 85,000. Although the present demand for electricity on the Isla de la Juventud is currently being met by the mixed quality fuel-oil generators (diesel generators are also being used for peak production or as back up), most of the enterprises are operating below capacity for the want of electricity and fossil fuels for process heat at affordable prices. Further, the increasing use of high sulphur fuel oil and diesel as the main energy fuels on the island is causing many socio-economic and environmental problems.

This project to develop a 100% RES island has been approved by the GEF, with UNIDO taking part in its implementation. It is an initiative 100% RES that will be used as a basic reference in the strategy of renewables, which also offer the possibility of mutual cooperation with those similar projects which are being developed on EU islands.

29

Portfolio

OLA – Caribbean

Cuba - Project nº1

Wind farms for generation of electricity in Cuba Source: MIC

PROJECT DESCRIPTION AND CURRENT SITUATION

In Cuba before the 1990 years there were very few antecedents of electricity generation using wind power.

Small wind turbines were used in remote sites to charge batteries, but in the 90s some institutions lead research activities and developed small experimental machines with no commercial success.

In 1999 the Demonstration 0.45 MW wind farm at Turiguanó Island was installed and commissioned, becoming the first experience in this field. The project was financed by donations of NGO’s, province governments and institutions of Europe through the Cuban NGO CUBASOLAR. This wind farm is currently operating with good performance and efforts are done together with CITMA to convert it into a demonstration and training center.

In the past 3 years EcoSol Solar and CUBASOLAR have installed 9 small hybrid wind-photovoltaic systems for charging batteries in rural electrification projects in keys of Camagüey, schools of Maisí, Guantanamo, and fish storage facilities of Isle of Youth, and also a hybrid system with a 3 kW wind turbine and a 4 kW photovoltaic array for supplying electricity to a rural community.

Recently a more complex hybrid system was installed that integrates 4 sources: a 16 kW photovoltaic array, a 6 kW wind turbine, a mini hydropower plant of 15 kW and a 20 kW diesel genset.

Since 1991 to 1998 the wind resource was partially assessed in 24 sites across our national territory. In advantageous zones of the northern coast from Villa Clara to Guantanamo a conservative forecast indicates that at least 400 MW of wind power could be deployed, using wind turbines with unit rated power of 750 kW. In the southern coast results are less attractive, and for the lack of technical resources it has been impossible to extend the wind assessment to mountain regions where a huge wind potential could exist but the cost of infrastructure development would be higher.

The interests of UNE for the short to medium term development of wind farms have been identified: one of 1.5 MW in the Isle of Youth; another of 4 MW in Cayo Coco, and a large 20 to 30 MW wind farm in the

Western region, close to Havana City.

IMPLEMENTING UNIT AND INSTITUTIONAL FRAMEWORK

The implementing unit for these projects is the Division EcoSol Solar, from the Corporation COPEXTEL, that will also own and operate the wind farms, according to the Framework Agreement between COPEXTEL and UNE signed October 2001. Some partnerships with foreign companies providing technology, funds or both are of interest.

The energy purchaser is UNE, a dependence of MINBAS (the Ministry of Basic Industry), that is the state monopoly for the distribution and commercialization of electricity.

As these projects would be implemented by financial investments closely connected to environmental and technology transfer activities, MINVEC (the Ministry for the Foreign Investment and Cooperation) and CITMA (the Ministry of Science, Technology and Environment) will be key players together with the companies directly involved.

The role of MINVEC is given by its character of Public Authority for the Coordination and Implement-ation of International Cooperation (PACIC), and CITMA leads the activities of Science, Technology and Environment.

PRIORITY

These wind power plants will be implemented for connecting to the grids of the National Energy System (NES) in order to create additional generation capacity in areas of interest for the further development of the System or where a lack of energy is forecasted, and also for providing clean and renewable energy.

CHARACTERISTICS OF INVESTMENT

The electricity generated by these wind farms will be traded through UNE. COPEXTEL and partners would sell it to UNE at a rate of $60/MWh (0.06 $/kWh), but the final price will be agreed for each project.

OPET OLA - Caribbean

Another profitability component for comes from the trading of CEC mainly to partially cover the O&M costs.

As an additional benefit to the National economy these projects will save foreign currency for reducing fossil fuel imports currently used to generate electric-ity in large gensets at Cayo Coco and Isle of Youth, and will also defer new investments in convent-ional power plants.

ECONOMIC PARAMETERS

The following tables summarize the main economic parameters of the projects: 1. CAYO COCO 4 MW WIND FARM ECOSOL Executing organization SOLAR Investment parameters Investment cost US$ Schedule - Year –1 % Life time cycle years Revenues Electricity generation GWh/year Electric tariff US$/MWh Revenues for sales of US$/year electricity O&M annual costs US$/year Annual estimated costs US$/year Profit/year without CEC US$/year Parameters GHG Reductions CO2 equival. tons estimated CO2/year CEC value of reference Financial contribution CEC / year.

Profit/year with CEC

US$/ton CO2

4,800,000 100 20 8.98 70 629,143.20 107,760.00 107,760.00 521,383.20 7184 5.0

US$/year

35,920.00

US$/year

557303.2

1/ Annual Profit estimated before interests, taxes and depreciation.

Profitability indexes Repay period without CEC Repay period with CEC IRR without CEC IRR with CEC

years years % %

9.21 8.61 9 10

2. ISLE OF YOUTH 1.5 MW WIND FARM ECOSOL Executing organization SOLAR Investment parameters Investment cost US$ 1,950,000 Schedule - Year –1 % 100 Life time cycle years 20 Revenues Electricity generation GWh/year 3.15 Electric tariff US$/MWh 70 Revenues for sales of electricity US$/year 220,500.00 US$/year O&M annual costs 37,800.00 US$/year Annual estimated costs US$/year Profit/year without CEC 182,700.00 Parameters GHG Reductions CO2 equival. tons estimated CO2/year 2,520 CEC value of reference Financial contribution CEC / year.

Profit/year with CEC

US$/ton CO2 US$/year US$/year

5.0 12,600.00 195,300.00

1/ Annual Profit estimated before interests, taxes and depreciation.

Profitability indexes Repay period without CEC Repay period with CEC IRR without CEC IRR with CEC

years years % %

10.67 9.98 7 8

3. WEST HAVANA 30 MW WIND FARM ECOSOL Executing organization SOLAR Investment parameters Investment cost US$ 36,000,000 Schedule - Year –1 % 100 Life time cycle years 20 Revenues Electricity generation GWh/year 68,33 Electric tariff US$/MWh 60 Revenues for sales of US$/year 4,099,800.0 electricity O&M annual costs US$/year 819,960.0 Annual estimated costs US$/year Profit/year without CEC US$/year 3,279,840.0 Parameters GHG Reductions CO2 equival. tons CO2/year 54,664 estimated CEC value of reference Financial contribution CEC / year.

Profit/year with CEC

US$/ton CO2

5.0

US$/year

273,320.0

US$/year

3,553,160.0

1/ Annual Profit estimated before interests, taxes and depreciation.

OPET OLA - Caribbean

Profitability indexes

Repay period without CEC Repay period with CEC IRR without CEC IRR with CEC

years years % %

10.98 10.13 7 8

CONTACT

Executive contact: Lic. Raul Novo Mesegué Position : EcoSol Solar, Copextel Ministry : MIC Address : Calle 29 No. 2610 entre 26 y 30, Municipio Playa, Ciudad Habana Tel : (53)7-2046000 ext 121 E-mail : leiva@solar.copextel.com.cu novo@solar.copextel.com.cu

OPET OLA - Caribbean

OLA – Caribbean

Cuba - Project nº2

Conversion of an Urban Transport Fleet to Ethanol-Fuelled Technology CETRA/MITRANS

PROJECT DESCRIPTION AND CURRENT SITUATION

The Cuban sugar industry has the potential to produce significant volumes of ethanol through the fermentation of sugar cane wastes or bagasse. The goal of this project is to convert 50 conventional diesel vehicles to ethanolpowered, thus providing Havana City with a public transport renewable fuelled fleet.

Substituting ethanol for gasoline in an internalcombustion engine reduces CO2 emissions in 50%. Most of urban transport vehicles are currently diesel-powered but they can be converted to ethanol-fuelled through technical modifications to the engine, the fuel and air supply systems.

Converting this 50-vehicle fleet may be done out within a year. The project will not only provide cleaner transport in Havana City but also be a pilot project to assess the potential for larger scale ethanol-substitution programmes in Cuba.

Also, the project provides other benefits: • Pure ethanol is a cleanly burning fuel, thus considerably reducing vehicle emissions other than CO2. Therefore, this project will improve air quality in urban areas where these vehicles are used (e.g.

CO2, NO2, HC, SOx, etc).

• Creating an alternative fuelled fleet reduces Cuba’s dependence on imported fuel oil and availability and fluctuation of market prices.

• Short-term employment generation and development of personnel specialising in converting vehicles to ethanol-fuelled.

EXECUTING UNIT AND INSTITUTIONAL FRAMEWORK

The executing unit of this project will be the Centre for Transport Research and Development (CETRA), an entity belonging to the Ministry of Transportation, which is responsible for transport technology development.

CETRA was founded over 20 years ago, has a technical potential of over 25 years of expertise in the transport sector, and has attained self-financing.

The Ministry of Transportation is in charge of guaranteeing public transportation all over the country.

The Ministry of Sugar (MINAZ) -the ethane producerwould be one of the main potential clients of this new technology.

Since these projects are implemented through financial investments closely involved in environmental activities and technology transfer, project development work will be undertaken with direct participation of the Ministry for Economic Collaboration and Foreign Investment (MINVEC), the Ministry of Science, Technology and Environment (CITMA), and those institutions directly involved in the projects.

MINVEC is participating as the Public Authority in charge of Co-ordinating International Co-operation and its Implementation (APCCI), while CITMA is acting as the steering organ for those activities concerning Science, Technology and Environment.

PRIORITY

We have been working in projects relating to the use of ethane in automotive vehicles since 2000, with the approval and financing of the Ministry of Sugar, a fact that demonstrates the priority granted to this project.

OPET OLA - Caribbean

CHARACTERISTICS OF INVESTMENT

Ethanol use allows fuel increase in Cuba to this purpose, in addition to replacing diesel imports.

The result of this project will allow to assess the feasibility of introducing this fuel to a higher extent, thus increasing the fleet in use.

The income resulting from the service provided by public transport is collected in national currency, due to the social role this service plays. Only in certain cases, such as service provided to workers in the tourism sector and others, is this activity payment collected in foreign currency.

Nonetheless, there is an additional cost-efficiency component from CEC (Carbon Equivalent Credits) commercialisation.

OTHER UNDERTAKING

CETRA is currently developing 3 projects with similar characteristics to those presented here.

ECONOMIC PARAMETERS

The table below summarises the main economic parameters of this project for the case this service is provided to tourism workers.

Executing Entity Parameters of Investment Total Investment Work Schedule - Year –1 Useful Working Life Incomes Tariff per Travelled Distance Average Annual Distance to be Travelled by Bus Buses in Use Annual Income Expenses per Travelled Distance Annual Costs of Fleet Operation.

Profit/Year without CEC

CETRA

US$

600, 000.0

% years

100 10

US$/km

0.58

Km.

50, 000.0

Bus US$/year

50 1, 450, 000

US$/km

0.48

US$/year

1, 200, 000.0

US$/year

250, 000.0

GHG Parameters Estimated Equivalent CO2 Reduction

CO2 tonnes /year

2,062.0

US$/ CO2 tonne 5.0 CEC Reference Value 10, 310.0 CEC Financial Contribution pa. US$/year US$/year 260, 310 Profit/Year with CEC* * estimated annual profit without including interests, taxes, and depreciation

Cost-Effectiveness Indicators Refunding Time without CEC Refunding Time with CEC IRR without CEC IRR with CEC

Years Years %

3.9 3.8 20.69

%

22.90

The estimated time for investment refunding is 3.9 years.

When including the additional benefit generated by CEC commercialisation, refunding time reduces to shortly less than 17 months. Conversely, without counting the effect of CEC, the estimated internal rate of return IRR is close to 20.69%. CEC commercialisation would generate additional benefit by increasing IRR over 20.90%.

NEXT STAGE AND TOTAL TO BE FUNDED

The next stage anticipates the conduction of a feasibility study amounting to $100, 000.00, including the study of the area of application of this technology. With the accomplishment of this study, the project would be ready to move into its final implementation stage, since development of an alternative fuelled bus fleet has already been approved. Risks may be considered minimal.

CONTACT

Executive Contact : José M. Villarroel Catro.

Position : Senior Researcher and Electrical Engineer.

Ministry : Centre for Transport Research and Development, Ministry of Transportation.

Address: Carretera del Asilo s/n, Finca Tiscornia, Casablanca, Regla, C. Habana Tel: 623051/58 extension 238/213 Fax: 338250 Email: diagnostico@iitransp.transnet.cu

OPET OLA - Caribbean

OLA – Caribbean

Cuba - Project nº3

Generation of Electricity from Sugar Cane Biomass in Cuba SOURCE: MINAZ

PROJECT DESCRIPTION AND CURRENT SITUATION

operation capacity. Surplus electricity would be delivered to the National Electricity Utility (SEN).

The Sugar Cane Agro-industry sector in Cuba has an Power Development Programme focused on both shortterm meeting this sector’s electricity demand through electricity cogenerated in its sugar mills and long-term becoming an electricity supplier for the national grid.

These objectives are part of the National Programme for National Energy Source Development endorsed by the National Assembly of Popular Power of the Republic of Cuba in 1992.

The New Electricity Cogenerating Power Plants projects consist of Power Plants designed for all-year operation, using sugar cane biomass as a main fuel that may be complemented with forest wastes or other local biomass available. These power plants must be adjacent to sugar mills in order to meet heat and electricity demand required for sugar cane production, and in turn receive sugar cane biomass during harvest time, surplus electricity being sold to SEN. When sugar cane harvest time is over, these power plants would sell heat and electricity to existing by-product production and buy sugar cane biomass or other biomass to be used as fuel, according to their needs. The projects presented here are as follows:

Current Energy Basis Remodelling projects consist of increasing sugar production energy use efficiency, enhancing steam and electricity cogeneration efficiency, and consuming sugar cane harvest wastes in sugar mills.

All this is intended to have steam generating capacities from bagasse left from sugar cane production time. Such capacities together with left biomass would help generate electricity in a condensing turbine generator with all-year

12 6 9

CO2 Emission Reduction/Year

Supply to SEN GWh p.a.

51 30 51

55.820 54.325 46.516

New Power Plant Projects

Antonio Sánchez Ciro Redondo España Republicana

20 40 28

139 379 197

CO2 Emission Reduction p.a.

• New Cogenerating Power Plants annexed to Sugar Mills.

30 de Noviembre FNTA Mario Muñoz

Supply to SEN GW p.a.

• Remodelling the Energy Basis existing in the Sugar Mill; and

Projects Power MW

So as to achieve the Development Programme long-term objectives, 34 sugar mills have been selected for electricity cogeneration projects, the mills installed capacity being estimated to increase in some 1,000 MW, consuming biomass as a fuel and operating throughout the year.

The projects presented here are part of this selection and may be classified as projects on:

Remodelling the Energy Basis

Power MW

There are currently 72 sugar mills interconnected to the national grid that receive and consume electricity from this utility. Estimated cogeneration levels during sugar cane production average 27.8 KW/milled sugar cane tonnes, accounting for nearly 98% of total energy consumption during this production.

11.5000 31.3000 16.3000

OPET OLA - Caribbean

EXECUTING UNIT AND INSTITUTIONAL FRAMEWORK

These projects are developing within an institutional framework composed of the project executing unit, i.e. the sugar mills involved that belong to the Ministry of the Sugar Industry (MINAZ), which is the Cuban State’s Central Administration’s organ responsible for all agricultural and industrial activities within the sugar cane sector.

The institutional framework is complemented by the Ministry of Science, Technology and Environment, and the Ministry for Economic Collaboration and Foreign Investment, both organs being attached to the Cuban State’s central administration and respectively responsible for Environment Protection, and Economic Collaboration and Foreign Investment. Likewise, the Ministry of Economics and Planning is in charge of energy-concerned activities throughout the country.

PRIORITY

Priority granted to these projects is evident in the Cuban Government’s policy - stated in the National Energy Source Development Programme – that prioritises renewable energy development, building mainly on sugar cane biomass.

30 de Noviembre FNTA Mario Muñoz Antonio Sánchez Ciro Redondo España Republicana

9 6 9 20 40 28

5,000 2,000 5,000 24,000 48,000 24,000

42.122 24.778 42.122 11.5000 313.000 163.000

CEC Financial Contribution p.a.

CO2 Emission Reduction/Year

Projects

Investment Cost US$ Thousands

ECONOMIC PARAMETERS

Power MW

Besides, there is an additional yielding component from CEC commercialisation.

As an additional economic benefit, this project will render foreign currency savings at national level, since it will reduce imports of fossil fuel that is currently used for electricity generation.

POTENTIAL FUNDING SOURCES

Funding sources for these projects are estimated to be of the credits-to-exports and commercial types.

Regarding the New Power Plants projects, they may be implemented via foreign investment in any modalities included in Law 77 of the Republic of Cuba.

NEXT STAGE AND TOTAL TO BE FUNDED

As a next stage, the executing entities have considered undertaking feasibility studies that may allow to make decisions on the continuation of arrangements with possible funding entities or negotiations with foreign investors interested in project development.

CONTACT

Executive Contact : Paulino López Position : Ministry : MINAZ Address : Tel : (537) 832 41 74 Fax : (537) E-mail : paulino@ocentral.minaz.cu

210.000 123.888 210.000 575.000 1.565.000 816.000

1 CEC Reference Value US$5/CO2 t

CHARACTERISTICS OF INVESTMENT

Electricity generated by the projects and supplied to SEN will be commercialised through the National Electricity Union (UNE), standing for over 90% of its income. The electricity tariff is US$52.62 MWh. Due to its characteristics, investment on these projects has a sound refunding capacity through those funds generated by electricity sales, which would be sold in foreign currency.

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OLA – Caribbean

Cuba - Project nº 4

Installation of Hydroelectric Generating Capacity at existing Irrigation Dams in Cuba Source: INRH/MINBAS

PROJECT DESCRIPTION AND CURRENT SITUATION

Cuba has approximately over 150 hydroelectric plants in operation that have been built through the years by the National Institute of Hydraulic Resources (INRH). Fossil fuel rise price has resulted in a particular interest in developing new hydroelectric plants. INRH is currently generating almost 2% of total electricity produced in Cuba. The mission of this institute is to increase this rate to 5% in upcoming years, its accomplishment depending on the funding capacity attained.

INRH has six dams ranked as having higher probabilities to guarantee water all through the year, and 30MWcapacity hydroelectric plants with an estimated annual 118 GWh generation could be installed there. Other 50 projects are in different preparation stages.

Project Peladero I Peladero II Las Mulas Bayamita Guamá Sur Guamá Nte Total

Power MW 5.0 5.0 8.0 4.6 4.0 3.0 29.6.

Energy GWh/year 26 26 36 20 17 13 118

The other projects are located in other provinces with dams guaranteeing enough water all through the year, their capacity ranging from 0.5 to 5 MW. These projects fall into different analysis phases, feasibility having been confirmed in certain cases.

EXECUTING UNIT AND INSTITUTIONAL FRAMEWORK

These hydroelectric plants are intended to be connected to the National Electricity Utility (SEN) in order to supply electric power to those areas where SEN has not reached. Being located in line ends, these projects account for electricity loss reduction and improve the technical parameters of the microcircuits they are connected to.

The executing unit of this project is the Hydropower Enterprise of INRH´s Investment Direction, which is responsible for identifying potential hydroelectricity generation in Cuba.

The Hydropower Enterprise is also in charge of operating and maintaining all hydroelectric plants in Cuba, including energy commercialisation.

INRH´s top priority is to develop a project system in the area of Santiago de Cuba Province, in southern Sierra Maestra National Park, where there is trained personnel and pre-feasibility studies for two projects (Peladero I and II) have been conducted, with a total 10MW capacity.

The main goal is to guarantee electrical power from renewable sources and turn this zone in the National Park into an “ecological municipality” (Guamá Municipality). Likewise, INRH has assessed the feasibility of developing other four projects in the same area, providing an approximate additional 20MW capacity.

These six hydroelectric plants have been conceived as part of a subsystem, so they will share infrastructure and transmission lines.

The main client is the National Electricity Union (UNE) belonging to the Ministry of the Basic Industry (MINBAS).

The Ministry of Construction (MICONS) is in charge of implementing public works, chiefly during the stage of blasting for later foundation laying.

Since these projects are implemented through financial investments closely involved in environmental activities and technology transfer, project development work will be undertaken with direct participation of the Ministry for Economic Collaboration and Foreign Investment (MINVEC), the Ministry of Science, Technology and Environment (CITMA), and those institutions directly involved in the projects.

MINVEC is participating as the Public Authority in charge of Co-ordinating International Co-operation and its OPET OLA - Caribbean

Implementation (APCCI), while CITMA is acting as the steering organ for those activities concerning Science, Technology and Environment.

PRIORITY

There is a vast network of small hydroelectric plants and mini-plants in Cuba that provide power to small isolate communities located mainly in mountain regions. The operation and maintenance of these plants is carried out by the Hydropower Enterprise, which must finance these activities through its income from electricity sales to SEN. Therefore, the Hydropower Enterprise is very keen to interconnect projects to the grid. This benefits UNE by improving electricity service quality in isolate zones through the addition of local power generation. The priority accorded to these projects is evidenced by the Cuban Government’s policy of fostering rural residents´ access to electricity utilities and generating electricity from renewable sources, water playing a main role in the latter.

This is why these projects are eligible to receive foreign currency from electricity power sales to UNE.

CHARACTERISTICS OF INVESTMENT

Hydroelectric plant generated electricity will be commercialised by UNE or, in the case of isolate power plants, it would be sold straight to clients. UNE´s sales stand for approximately 90% of INRH´s incomes and constitute INRH´s main income source in foreign currency. The electricity tariff is $120/MWh, $80 being collected in foreign currency and the remainder in national currency.

Those projects in which electricity is provided to particular clients are commercialised in national currency due to the social role the Enterprise plays.

Due to the characteristics of these hydroelectric plants, investing in them has a sound refunding capacity from the funds generated by foreign-fund-collected electricity sales.

There is an additional cost-effectiveness component arising from CEC commercialisation.

As an additional economic benefit, this project will result in foreign currency savings by reducing fossil fuel imports that are currently used to generate electricity.

OTHER UNDERTAKINGS

INRH is currently implementing around 10 projects with similar characteristics to those presented here.

ECONOMIC PARAMETERS

The table below summarises the main economic parameters of the project.

Executing Entity Parameters of Investment Total Investment Work Schedule - Year -2 - Year –1 Useful Working Time Incomes Electricity Generation Electricity tariff Incomes from Electricity Sales O&M Cost Estimated Annual Cost Profit1/year without CEC GHG Parameters Estimated Equivalent CO2 Reduction CEC Reference Value CEC Financial Contribution pa.

Profit1/year with CEC

INRH US$

10,000,000

% % years

60 40 30

GWh/year US$/MWh US$/year

26.0 80.0 2,080,000

US$/year

500,000

US$/year

1,580,000

CO2 tonnes/year US$/CO2 tonne US$/year US$/year

91,980 5.0 459,900 2,039,900

1/ estimated annual profit without including interests, taxes and depreciation

Cost-Efficiency Indicators Refunding Time without CEC

years

Refunding Time with CEC

4.8

years

3.9

IRR without CEC

%

18.60

IRR with CEC

%

22.34

The time calculated to refund investment in Peladero I – without including the benefit from CEC commercialisation – is 4.8 years. When including this benefit, refunding time reduces to 3.9 years. Likewise, without considering CEC effect, the estimated internal rate of return (IRR) is 18.6%. CEC commercialisation would provide a significant benefit increasing IRR over 22%.

NEXT STAGE AND TOTAL TO BE FUNDED

As a next stage, INRH anticipates to conduct a feasibility study amounting to US$ 500,000, including the preparation of detailed engineering, technology selection, and the preparation of bid packages. After study completion, the project would be ready to go into the final implementation stage.

CONTACT

Executive Contact : Eng. Mario León Miguez Position : Hydroelectric Unit Ministry : National Institute of Hydraulic Resources (INRH) Address : Calle Humboldt 106 c/. Infanta y P Vedado, Ciudad de la Habana E-mail : mario@hidroe.co.cuAddress : Tel : (537) 832 41 74 E-mail : paulino@ocentral.minaz.cu

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Cuba - Project nº 5

Fabricación Paneles Fotovoltaicos para la generación de electricidad en Cuba.

SOURCE: MIC

DESCRIPCIÓN DEL PROYECTO Y SITUACIÓN ACTUAL

Antes de 1990, las comunidades aisladas en zonas montañosas recibían un mínimo de servicio eléctrico suministrado por plantas diesel fundamentalmente.

Debido al deterioro y funcionamiento inestable de las que quedan, se dio la necesidad de buscar soluciones para mejorar la calidad de vida y vitalidad de los servicios médicos y docentes, así como para el desarrollo sociocultural de los habitantes de estas comunidades.

Mediante los programas de electrificación ejecutados hasta el momento se ha electrificado cerca de más de 350 consultorios médicos, 2364 escuelas primarias, 1864 salas de TV y 150 círculos sociales.

Con este objetivo surge la fábrica de módulos fotovoltaicos de la Empresa Componentes Electrónicos puesta en marcha a partir de Diciembre del año 2000.

Esta fábrica con capacidad de producción de 1 MW ha tenido un crecimiento ascendente a pesar de ser aún muy joven. El país dispone hoy de capacidades y experiencias para el ensamblaje de los paneles solares fotovoltaicos, además de su montaje y mantenimiento.

UNIDAD EJECUTORA Y MARCO INSTITUCIONAL

La unidad ejecutora de estos proyectos es la División Ecosol Solar, perteneciente a la Corporación COPEXTEL, esta se encarga de la instalación llave en mano de cada proyecto.

El cliente es la UNE, dependencia del Ministerio de Industria Básica (MINBAS), que es el monopolio estatal que controla la distribución eléctrica.

del Ministerio para la Inversión Extranjera y la Colaboración Económica (MINVEC), el Ministerio de Ciencia y Tecnología y Me-dio Ambiente (CITMA), y de los organismos directamente implica-dos en los mismos.

La participación del MINVEC está dada por su carácter de Autoridad Pública encargada de la Coordina-ción de la Cooperación Internacional y su Ejecución (APCCI), mientras que el CITMA actúa como organismo rector de la Actividad de Ciencia, Tecnología y Medio Ambiente.

PRIORIDAD

La construcción de estas centrales se concibe a fin de instalar capacidades en zonas de interés donde se prevén déficit energéticos, así como para aportar energía limpia y renovable.

CARACTERÍSTICAS DE LA INVERSIÓN

La fábrica de módulos fotovoltaicos de la Empresa Componentes Electrónicos ha visto incrementada el número de solicitudes tanto de clientes nacionales como extranjeros, lo que se manifiesta a través de varios contratos de producción cooperada con Alemania, Italia, y recientemente ISOFOTON S.A. de España de conjunto con ECOSOL SOLAR, además de haber comenzado ya con un contrato de exportación a Japón y Venezuela.

En estos momentos la fábrica está en la necesidad de aumentar su capacidad de producción con el objetivo de enfrentar este crecimiento, para lograr este propósito concretamente es necesaria la adquisición de varias posiciones con un monto de inversión que asciende a 228000 USD..

Dado que la implementación de estos proyectos se realiza por medio de inversiones financieras estrechamente vinculadas a la actividad medio ambiental y la transferencia de tecnologías, el trabajo de desarrollo de estos proyectos se realizará con la participación directa OPET OLA - Caribbean

PARÁMETROS ECONÓMICOS

En la siguiente tabla se resumen los principales parámetros económicos del proyecto:

Entidad Ejecutora

Empresa de Componentes Electrónicos Pinar del Río

Parametros de inversion Monto de la Inversión Cronograma de obra - Meses -18 Vida útil Ingresos Costo de venta del panel Cantidad de paneles Ingresos por venta de paneles Utilidad1/año

Entidad Ejecutora

US$

228 000

% años

100 15

US$ No US$/año US$/año

600 100 60 000 60 000

Empresa de Componentes Electrónicos Pinar del Río

Parametros de inversion Monto de la Inversión Cronograma de obra - Meses -18 Vida útil Ingresos Costo de venta del panel Cantidad de paneles Ingresos por venta de paneles Utilidad1/año

US$

228 000

% años

100 15

US$ No US$/año US$/año

600 100 60 000 60 000

Índices de rentabilidad Período de Repago TIR

años

3.8

%

26.31

CONTACTOS

Contacto ejecutivo: Ing. Carlos Iván Cabrera Posición : Fabrica de Componentes Pinar del Río Ministerio : MIC Dirección Tel : (53) 082 766197 (53) 081 764012 ext 14 E-mail : civan2711

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OLA – Caribbean

Cuba - Project nº 6

Colectores Solares Térmicos para el calentamiento de agua en Hoteles

DESCRIPCIÓN DEL PROYECTO Y SITUACIÓN ACTUAL

El uso de los colectores solares térmicos tiene antecedentes relativamente masivos en Cuba desde la década del 80, con la instalación de un número importante de ellos en escuelas, círculos infantiles y otros sitios de interés social fundamentalmente y más recientemente se ha incrementado su uso en instalaciones hoteleras. Aunque la calidad y durabilidad de los equipos instalados no siempre han sido las mejores, esto no es resultado de limitaciones tecnológicas sino del esfuerzo de abaratar los mismos de acuerdo a los recursos económicos destinados a este fin.

Este un campo donde existe experiencia de construcción, ensamblaje y comercialización tanto de equipos de producción nacional como extranjero, así como una actividad de investigación -desarrollo con capacidad para apoyar su perfeccionamiento.

La introducción actual se realiza sobre todo en el sector hotelero por las ventajas económicas que representa su uso en el calentamiento de agua en sustitución fundamentalmente de calentadores eléctricos:

UNIDAD EJECUTORA Y MARCO INSTITUCIONAL

En la implementación de este proyecto deben participar instituciones con experiencia y capacidad para la producción y comercialización de colectores solares térmicos del SIME, MIC y el Banco de Inversiones, instituciones de Investigación desarrollo con experiencia en este campo como el CIES, Cuabaenergía y el CETER. Dado que la implementación de estos proyectos se realiza por medio de inversiones financieras estrechamente vinculadas a la actividad medio ambiental y la transferencia de tecnologías, el trabajo de desarrollo de estos proyectos se realizará con la participación directa del Ministerio para la Inversión Extranjera y la Colaboración Económica (MINVEC), el Ministerio de Ciencia y Tecnología y Me-dio Ambiente (CITMA), y de los organismos directamente implica-dos en los mismos.

La participación del MINVEC está dada por su carácter

de Autoridad Pública encargada de la Coordinación de la Cooperación Internacional y su Ejecución (APCCI), mientras que el CITMA actúa como organismo rector de la Actividad de Ciencia, Tecnología y Medio Ambiente.

PRIORIDAD

La instalación de los calentadores solares térmicos para el calentamiento de agua en las instalaciones Turísticas posibilitan una disminución del consumo de energía eléctrica para estas funciones contribuyendo al ahorro de electricidad al país y posibilita también añadir un nuevo valor en el producto hotelero: • Turismo respetuoso con el medio ambiente.

• Reanimación de capacidades productivas del sector mecánico del país.

• Desarrollo de un producto que no solo sustituye importaciones sino que además puede potencialmente constituirse en una exportación.

CARACTERÍSTICAS DE LA INVERSIÓN

Se estima que la inversión en el calentamiento solar de agua en quince hoteles de 200 habitaciones es del orden de los 42 000 USD cada uno con periodos de recuperación de la inversión país entre 4,5 y 5,5 años en dependencia de que se sustituya el calentamiento eléctrico o por gas. En el caso de la población la inversión por vivienda se valora en 300USD pero debido al menor uso de agua se estiman plazos de recuperación de la inversión país mayores de 10 años. Se propone para esto la creación de una línea de crédito de 0,7 millones de USD en una institución de la banca nacional, que se destine a co-financiar inversiones en colectores solares con un plazo de pago de tres años e intereses inferiores al 10%. Posibilite el fortalecimiento de las capacidades nacionales de producción de equipos térmicos solares con una efectiva integración del sector productivo y de investigación-desarrollo.

La creación de condiciones que estimulen la comercialización de estos equipos. A éste fondo tendrán derecho a acceder las empresas nacionales con capacidad de pago del crédito otorgado.

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Cuba - Project nº 7

Development and Infrastructure of a Natural Gas or Methane-Fuelled Vehicle Fleet (TRANS ECO) Source: MITRANS

PROJECT DESCRIPTION AND CURRENT SITUATION

The first experiences in Cuba regarding the use of compressed natural gas (CNG) to fuel transport vehicles started back in 1996, with a donation from the NGO “Bread to the World” that originated TRANS ECO, in order to support the development of natural gas sources that may keep company with petroleum in Cuba.

Pursuant to this, two compressed natural gas (CNG) stations were installed in Havana City and the first 100 automotive vehicles were converted to this technology.

During a second stage, it is anticipated to extend the CNG station network in Havana City and develop a new CNG System in Ciego de Ávila City.

TRANS ECO currently has a compression capacity of around 8,200 m3 per day. At the current consumption levels, this would allow to supply CNG to approximately 1,100 vehicles. TRANS ECO has two operative CNG stations in Havana and provides equipment installation and maintenance services intended to convert gas-fuelled vehicles to CNG-powered. The mother station is located in the Peñas Altas zone, 40 km away from Havana. Here, the natural gas coming via a pipe line is compressed.

A second station without compression capacity (“daughter station”) was located at the centre of Havana in order to facilitate access to the automotive market.

Both stations are located at service stations belonging to the Provincial Transport Enterprise (EPT), which is in charge of gasoline and diesel distribution in Havana Province.

TRANS ECO´s immediate priority is to increase the CNG-fuelled vehicle fleet so as to reach the balance point and complete certain infrastructure investments needed to guarantee service delivery and quality in time.

Therefore, equipment (compression kits) commercialisation is carried out on a narrow margin in

order to encourage this technological change.

At medium term, TRANS ECO anticipates additional CNG stations in Havana City and Ávila City, depending on the advance made conversion. The average cost of a CNG estimated in US$250.000.

to install Ciego de in vehicle station is

EXECUTING UNIT AND INSTITUTIONAL FRAMEWORK

The executing unit of this project is TRANS ECO, an enterprise belonging to the Transportation Group (Group IT) dependent on the Ministry of Transportation (MITRANS).

The Group IT focuses on developing research and development studies applied to transport and on applying those results of national interest.

The Group IT is subordinated to the Ministry of Transportation.

On the other hand, Cuba was one of the first signatory Parties to the United Nations Convention on the Environment, so taking measures intended for greenhouse gas emission reduction constitutes – in addition to a moral commitment – a political banner in the international arena. In this sense, the Ministry of Science, Technology and Environment (CITMA) has passed provisions and guidelines promoting and supporting any technologies or measures intended for environmental pollution reduction.

Since these projects are implemented through financial investments closely involved in environmental activities and technology transfer, project development work will be undertaken with direct participation of the Ministry for Economic Collaboration and Foreign Investment (MINVEC), the Ministry of Science, Technology and Environment (CITMA), and those institutions directly involved in the projects.

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MINVEC is participating as the Public Authority in charge of Co-ordinating International Co-operation and its Implementation (APCCI), while CITMA is acting as the steering organ for those activities concerning Science, Technology and Environment.

FINANCING SOURCES AND POTENTIAL PARTNERS

INSTITUTIONAL PRIORITY

The consumption structure of Cuban automotive vehicles currently builds almost completely on gasoline and diesel from imported fuel oil. Diesel is directly imported too at the international market. Imports reduction through substitution by national productions is one of the main guidelines of the Cuban State. In addition to decreasing Cuba’s dependence on the international market, this results in savings for the her economy.

cost-effectiveness will bear a direct relation to the amount of vehicles converted to CNG-fuelled and to CNG consumption levels.

CHARACTERISTICS OF INVESTMENT

This project has the capacity needed to produce incomes in foreign currency from CNG sales and the installation, commercialisation and maintenance of equipment to convert conventional vehicles to the use of CNG as an alternative fuel.

Recovery of the initial investment is related directly to achieving the conversion of a 400-vehicle fleet in order to reach a first balance point.

The Cuban automotive stock is estimated in 500,000 units, 25% of these units corresponding to Havana City.

In this regard, TRANS ECO has the possibility of negotiating automotive vehicle conversion and CNG supply agreements with state enterprises having payment capacity in foreign currency from their participation in prominent sectors of the Cuban economy.

In fact, TRANS ECO is already having conversations with several tourism firms and the Provincial Enterprise of Public Transportation of Havana, which is subordinated to MITRANS and is in charge of the overall passenger and freight transportation and part of the taxis in the city.

In turn, this enterprise owns service stations to which CNG stations could be added.

Savings from CNG use allowed to refund financing for conversion kits in less than two years.

Natural gas supply for compression is guaranteed by the Ministry of the Basic Industry (MINBAS) through Cuba Petróleo (CUPET), which has agreed to supply natural gas through MITRANS for at least 15 years.

The main gas extracting area is located in the zones adjacent to the natural gas deposits in Boca de Jaruco, a site around 5 km away from the main station, thus reducing the risk of raw material non-availability.

From the environmental standpoint, the CNG project will account for important GHG emission reductions, a fact that could eventually lead to having a flow of additional funds from CEC commercialisation.

Funding needed to complete both the initial investments from the initial donation by “Bread to the World” and the later acquisition of conversion kits and operation items came from the Group IT´s profits and other credits granted by MITRANS (revised).

Most items and technological equipment have been acquired through MITRANS´s General Importing Enterprise of Transport (EIGT). During the development of TRANS ECO, many international and national firms and enterprises have shown their interest in negotiating.

In the national setting, the transport enterprise of the Ministry of the Siderurgical and Mechanical Industry (SIME) is interested in taking on part of the vehicleconversion and resale services SIME is the organ responsible for acquiring and developing equipment for Cuban enterprises; many pieces of equipment developed by SIME are integrated with components produced abroad, so its potential relation with TRANS ECO is interesting.

ECONOMIC PARAMETERS

The table below summarises the main economic parameters of the project.

Executing Entity Parameters of Investment Investment in Equipment Funds to Finance Kits Total Investment Installation Schedule (year –1) Useful Working Life Incomes (in a status of regime) CNG Sales O&M Costs CNG Cost Electric Power Other Expenses Annual Costs Annual Profit without CEC (in regime)

TRANS ECO

US$ US$ US$

270,000 250,000 520,000

%

100 years 15 From year 4 US$/year 845,000 US$/year US$/year US$/year US$/year US$/year

188,000 121,000 270,000 579,000 266,000

CEC Contribution p.a.(in regime)

tonnes CO2/year US$/ CO2 tonne US$/year

5.0 30,000

Annual Profit1 without CEC

US$/year

216,000

Annual Profit1 with CEC

US$/year

416,000

Estimated Equivalent CO2 Reduction CEC Reference Value

6 000

The incidence of this flow of funds in the investment OPET OLA - Caribbean

1/ estimated annual profit without including interests, taxes and depreciation

The analysis anticipates the formation of an initial US$250,000 fund to finance kits sales, assuming it will be refunded in two US$125,000 instalments in the project years 6 and 7.

Cost-Efficiency Indicators Refunding Time without CEC

years

5.2

Refunding Time with CEC

years

3.8

IRR without CEC

%

25.9

IRR with CEC

%

38.3

The time calculated to refund the initial investment is 5.2 years, without including the benefits from CEC commercialisation. When including this benefit, refunding time reduces to 3.8 years. Likewise, the estimated internal rate of return (IRR) is 25.9% without including CEC effect. The impact resulting from CEC financing augments such a rate to 38.3%.

It must be taken into account that, when calculating these rates and investment refunding times, refunding of MITRANS´s original investment in the current infrastructure was not considered; this fact accounts for the relative high cost-effectiveness of this incremental investment.

NEXT STAGE AND TOTAL TO BE FUNDED

TRANS ECO´s immediate goal is to complete the infrastructure of the current CNG supply system and make good use of the capacity installed in order to guarantee supply quality and expedite the automotive vehicle conversion programme.

To this end, TRANS ECO is in need of an estimated US$500,000 of which US$270,000 would be intended to reinforce the existing CNG infrastructure, while the remnant would be intended to acquire vehicle-conversion kits.

CONTACT

Executive Contact: Juan José Alea Position : Ministry : MITRANS / Group IT Address : La Habana Tel : (537)863 25 41 E-mail :alea@iitransp.transnet.cu

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Cuba - Project nº 8

Biogas Capture and Renewable Energy Production at the New Dump in Guanabacoa Source: DPSC

The dump currently in exploitation at Guanabacoa, in eastern Havana, is depleting and in poorest sanitary conditions. Therefore, we are engaged in the construction of a new dump, in order to replace the older one.

The new household solid refuse dump will have a sanitary filling system and comprises an approximately 18 ha area adjacent to the former Santa Clara (Roberto Flores) quarry that is located on a rock bed. The field is part of a dissected plain with dark carbonated soils that will be necessarily disturbed. Such an area allows a 16-year useful exploitation time, the refuse to be dumped is 316.6 metric tonnes/day – the estimate having been done for traditional sanitary filling techniques. The application of the new compacting and recycling techniques may prolong dump use over time.

Dump implementation will build on modern techniques that can be adapted to our actual conditions and possibilities. The dump must rank in the Controlled Dump category.

As part of all this, the construction of a treatment plant for the gas (Biogas) emanating from dumps has been planned.

Biogas or dump gas forms in a natural way during the decomposition process of the organic refuse contained in garbage. Its methane content, a highly energetic hydrocarbon, makes biogas be appraised as thermal or electric energy.

Urban solid refuse dumps bear important social, visual and environmental impacts, such as the generation of biogas arising from organic matter decomposition in anaerobic conditions. Treatment intended to neutralise its harmful effect not only provides a solution to environment protection but may allow to produce fuel as well.

The new dump to the East will contain approximately 300 daily tonnes from Eastern Havana, Regla, Guanabacoa, San Miguel Municipalities. That makes us anticipate that the dump energetic recovery will be economically viable.

Experiences and studies evidence that methane proportion will be over 50%, the other biogas components being Carbon Dioxide, Nitrogen, Oxygen and other components to a lesser extent.

The executing unit of this project will be the Provincial Hygiene Financed Unit, with the participation of the Ministry of the Basic Industry (MINBAS).

Since these projects are implemented through financial investments closely involved in environmental activities and technology transfer, project development work will be undertaken with direct participation of the Ministry for Economic Collaboration and Foreign Investment (MINVEC), the Ministry of Science, Technology and Environment (CITMA), and those institutions directly involved in the projects.

PROJECT DESCRIPTION AND CURRENT SITUATION

EXECUTING UNIT AND INSTITUTIONAL FRAMEWORK

MINVEC is participating as the Public Authority in charge of Co-ordinating International Co-operation and its Implementation (APCCI), while CITMA is acting as the steering organ for those activities concerning Science, Technology and Environment.

PRIORITY

This project is highly prioritised. This is evidenced by the need to collect biogas from the New Dump at Guanabacoa, thus preventing highly polluting gases from passing to the atmosphere and contributing to the greenhouse effect worldwide. The Provincial Direction of Community Services is the organ in charge of its control, treatment and coincides in the priority this type of project must be accorded.

Likewise, since the Cuban Government fosters any initiative aiming at better use of renewable resources, the programme is supported by the utmost national authorities.

Finally, from the environmental viewpoint, these investments fall under CITMA´s priorities, as they generate important GHG emission diminution and fossil fuel use savings.

CHARACTERISTICS OF INVESTMENT

The proposed investment aims at extracting and transporting biogas to a treatment plant. This is usually done through a network of pits or trenches – depending on dump morphology – that cover the overall dump OPET OLA - Caribbean

surface and capture the gas in order to convey it later to a main collector through a piping network equipped with regulating valves. From the collector, the gas passes to its final treatment so as to be used as an electricity and heat energy source. It is anticipated that 9,000 MWh/year will be exported to the Cuban Electricity Enterprise, with a $60/MWh electricity tariff.

There is an additional cost-effectiveness component from CEC commercialisation.

As an additional economic benefit, this project will generate foreign currency savings at the national level by reducing imports of fossil fuel currently used for electricity generation.

FINANCING SOURCES AND POTENTIAL PARTNERS

Funding needed to complete both the initial investments from the initial donation by “Bread to the World” and the later acquisition of conversion kits and operation items came from the Group IT´s profits and other credits granted by MITRANS (revised).

Most items and technological equipment have been acquired through MITRANS´s General Importing Enterprise of Transport (EIGT). During the development of TRANS ECO, many international and national firms and enterprises have shown their interest in negotiating.

In the national setting, the transport enterprise of the Ministry of the Siderurgical and Mechanical Industry (SIME) is interested in taking on part of the vehicleconversion and resale services SIME is the organ responsible for acquiring and developing equipment for Cuban enterprises; many pieces of equipment developed by SIME are integrated with components produced abroad, so its potential relation with TRANS ECO is interesting.

ECONOMIC PARAMETERS & FUNDING RESOURCES

This project is undertaken due to the need of controlling those gases that are harmful to people’s life, their financing being dependent on entities that wish to cooperate with this type of investment in order to improve the environment.

This project type traditionally tends to be funded by i) international financing from international organisations and governmental credits, ii) international financing from donations whose goal would be to improve the population’s living conditions and environment protection.

National currency funding can be provided by the Provincial Direction of Community Services.

The table below summarises the main economic parameters of the project:

Executing Entity

Provincial Hygiene Financed Unit

Parameters of Investment Total Investment

US$

914,527.0

Work Schedule - Months -18

%

100

Useful Working Life

years

12

Electricity Generation

GWh/year

9,4

Electricity Tariff

US$/MWh

60

Incomes from Electricity Sales

US$/year

564, 000

Estimated Annual Cost

US$/year

272, 000

Profit1/year without CEC

US$/year

540, 000

Incomes

O&M Cost

GHG Parameters Estimated Equivalent CO2 Reduction Estimated Equivalent CO2 Reduction on the basis of CH4 non-emissions

CO2 tonnes/year

7,600

CO2 tonnes/year

176, 000

CEC Financial Contribution pa.

US$/ CO2 tonne US$/year

918, 000

Profit1/year with CEC

US$/year

1, 458, 000

CEC Reference Value

5.0

Total Itemised Investment Materials

Units 2

Amount

US$

Geotextile Layer

m

130, 000

390,000

Hydraulic Pipe Line PVC ø 100

m

845

2,450

Sanitary Pipe Line PVC ø 200

m

940

3,666

Sanitary Pipe Line PVC ø 150

m

3,495

11,359

Sanitary Pipe Line PVC ø 100

m

480

1,440 1,612

Hofo ø 150

m

403

Hofo ø 100

m

2,705

1,500

Submersible Pumps

U

6

1,500

Regulating and Metering Plant

U

1

1, 500’0.00

Pumping Plant

U

1

30, 000.00

Surplus Gas Incinerating Torch

U

1

6, 000.00

Power Generating Set

U

3

300,000.00

Transformers

U

3

150, 000.00

TOTAL

914,527.00

Cost-Efficiency Indicators Refunding Time without CEC

years

1.69

Refunding Time with CEC

years

59

IRR without CEC

%

1

IRR with CEC

%

100

CONTACT Executive Contact : Odalys García Fonseca Provincial Administration Council: Provincial Direction of Community Services Address : Calle 30 No 2110 entre 21 y 23. Playa Ciudad Habana Tel : (537) 202 34 82 y/o 202 64 28 E-mail : Odalys@sc.ch.gov.cu OPET OLA - Caribbean

OLA – Caribbean

Cuba - Project nº 9

Biodiesel y otros derivados de Jatropha curcas una alternativa de autosostenibilidad y mejora del Medio Ambiente

DESCRIPCION DEL PROYECTO Y SITUACION ACTUAL

A partir de 1992 se inicia en Cuba un programa de investigaciones y desarrollo relacionado con el uso del aceite de la semilla del Piñon de Botija (J. Curcas) en la producción de biodiesel (Estermetílico) como sustituto del diesel en motores de combustión interna.

La información Científico Técnica obtenida por la colaboración de la Universidad Nacional de Ingeniería de Managua (Nicaragua) mediante los contactos de colaboración con el proyecto Internacional austriaconicaragüense Biomasa, permitió conocer los adelantos tecnológicos existentes a escala mundial sobre el tema y las potencialidades productivas del Piñón de Botija, sus requerimientos edafoclimaticos, aspectos relacionados con la producción de biodiesel y otros derivados de interés económico; así como el apoyo técnico material ofrecido por las mismas contribuyo creando las bases en el programa cubano para un desarrollo acelerado a partir de 1995.

Por otra parte, la información técnica suministrada por el Proyecto Internacional Alemán-Mali, donde se consideraba la siembra en forma de setos (cercas vivas) y no al modo convencional, alcanzando producciones de aceite mas limitadas pero a bajo costo. El aceite es destinado al uso directo en motores que generan la energía eléctrica y mecánica demandada en los diferentes poblados y a la producción de jabón para satisfacer las necesidades propias de esa comunidad.

En Cuba aún cuando el Biodiesel no se ha explotado comercialmente como combustible, existe un conocimiento y una experiencia de más de 10 años sobre el uso de los aceites vegetales y sus mezclas combustibles y sus efectos en la disminución en la emisión de los gases invernaderos, cuando estos son empleadas fundamentalmente en el transporte automotor y se valoran como una fuente alternativa de energía renovable y de sustitución de importaciones.

UNIDAD EJECUTORA Y MARCO INSTITUCIONAL

La unidad ejecutora de este proyecto será la Empresa de Cultivos Varios del Municipio de Guantánamo.

El MINBAS sería uno de los principales clientes potenciales de esta nueva tecnología.

Dado que la implementación de estos proyectos se realiza por medio de inversiones financieras estrechamente vinculadas a la actividad medio ambiental y la transferencia de tecnologías, el trabajo de desarrollo de estos proyectos se realizará con la participación directa del Ministerio para la Inversión Extranjera y la Colaboración Económica (MINVEC), del Ministerio de Ciencia y Tecnología y Medio Ambiente (CITMA), y de los organismos directamente implicados en los mismos.

La participación del MINVEC está dada por su carácter de Autoridad Pública encargada de la Coordinación de la Cooperación Internacional y su Ejecución (APCCI) mientras que el CITMA actúa como organismo rector de la Actividad de Ciencia, Tecnología y Medio Ambiente.

PRIORIDAD

La problemática de encontrar recursos energéticos menos contaminantes y renovables ha llevado al desarrollo de diferentes tecnologías dirigidas a la utilización de productos agrícolas con fines energéticos.

En particular se han desarrollado e introducido en el mercado tecnologías que permiten procesar las grasas, en especial, el aceite vegetal para convertirlo en combustible diesel y aprovechar los residuos del proceso con fines energéticos y para la alimentación animal.

CARACTERISTICAS DE LA INVERSION

El proyecto se propone la plantación de 3 700 ha de Jatropha Curcas con un costo estimado total de inversión del proyecto en 2 590 800 USD.

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La duración del proyecto se estima en 5 años durante los cuales se obtendrá la producción máxima de biodiesel para esa plantación. Es de señalar que los primeros 2 años no se obtendrán producciones algunas, estas comenzaran con un rendimiento del 60% a partir del 3 año de proyecto hasta obtener la producción máxima como se puntualizo anteriormente al quinto año.

Además del biodiesel se obtendrán otros productos útiles asociados como son la glicerina para la producción de jabón, además de la torta para la fertilización y alimentación del ganado.

El empleo del biodiesel permite incrementar combustible con que cuenta el país para esta actividad, además de sustituir la importación del Diesel.

PROXIMA ETAPA Y MONTO A FINANCIAR

La próxima etapa se prevé la realización de un inventario de disponibilidad de tierras, así como estudio para la diversificación del cultivo de oleaginosas. Con la realización de este estudio el proyecto quedaría listo para entrar en su etapa final de ejecución, aprobados para desarrollar una flota de vehículos de combustible alternativo. El riesgo puede considerarse mínimo.

CONTACTO

Contacto ejecutivo : MSc. Ing. Jose A Sotolongo Perez.

Teléf: 32 64 89 Email: sotogtmo@enet.cu

El resultado de este proyecto permitirá evaluar la factibilidad de la introducción a mayor escala de este combustible e incrementando el parque en explotación.

PARÁMETROS ECONÓMICOS

En la siguiente tabla se resumen los principales parámetros económicos del proyecto.

Entidad Ejecutora

Empresa de Cultivos Varios del Municipio de Guantánamo.

Parámetros de inversión Monto de la Inversión Vida útil Ingresos Producción de aceite Participación del aceite comestible en la producción total Costo de venta Ingresos anuales Utilidad/año

US$ años

2 590 800 15

ton/año %

5 000 0

USD/l US/año US$/año

0.30 1 700 000 1 700 000

1/ utilidad anual estimada antes de intereses, impuestos y depreciación

Indices de Rentabilidad Período de Repago TIR

años %

2 48

El período de repago de la inversión se estima en 2 años.

Por otro lado, la tasa interna de retorno (TIR) se estima cercana al 48%.

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OLA – Caribbean

Cuba - Project nº 10

Generation and delivery of renewable energy basic modern energy services in Cuba. Isla de la Juventud.

Source: CITMA

PROJECT DESCRIPTION AND CURRENT SITUATION

Provision of reliable electricity at affordable prices to all households, services and industries is an integral component of the national development plan of the Government of Cuba. In 2001, over 90 percent of Cuba’s electricity generation capacity was oil-fired. Currently, Cuba produces 50 percent of oil for its domestic consumption while rest is imported. The national grid has covered about 95% of total population at present while 5% of the population located in far and remote places, mainly in the eastern province, is yet to be provided with reliable electricity services. Electricity tariff for the household sector and agriculture is highly subsidized by the Government while export earning industries face full cost tariffs.

The Isla de la Juventud, an island located southwest of the main island, is the second island in the extension of the Cuban archipelago. Although 350 islands make up the Archipiélago de los Canarreos, Isla de la Juventud is by far the biggest of them, and is administered from the island's capital, Nueva Gerona. Much of the island is flat and a part of it - the Ciénaga de Lanier - is Cuba's secondlargest swamp. The island is also the least populated region of Cuba, with most people living in the north of the island. The local economy and employment opportunities of the island mainly depend upon small and medium scale industries. To reduce over-dependence on fossil fuels to meet its growing energy needs, renewable sources of energy offer a viable alternative to enterprises and households on the Isla de la Juventud to achieve their potential..

number of new economic opportunities for the local population are beginning to emerge. These new activities however, will also lead to increased demand for energy.

Even at present, availability of energy services at economic price acts as a constraint for the industrial sector (power for the household sector is subsidized by the Government) on the island. The island possesses abundant natural and renewable resources that could be commercially harnessed to meet the growing needs for energy. These resources, among others, include biomass residues from the forest products and agricultural crops, and wind power located along the coastal areas.

Although the present demand for electricity on the Isla de la Juventud is currently being met by the mixed quality fuel-oil generators (diesel generators are also being used for peak production or as back up), most of the enterprises are operating below capacity for the want of electricity and fossil fuels for process heat at affordable prices. Further, the increasing use of high sulphur fuel oil and diesel as the main energy fuels on the island is causing many socio-economic and environmental problems. The negative economic effect due to non-availability of adequate modern energy services at affordable prices is manifested in limited employment opportunities and lack of income generation activities on the island.

The Isla de la Juventud has a population of about 85,000, with almost 92 percent of this population living in urban areas and 8 percent living in rural areas. The island’s installed electricity generation capacity at present is totally fuel-oil and diesel-based. The main economic activities in Isla de la Juventud are fishing, agriculture, in particular citrus plantations, and dairy, meat and ceramics industries. Tourism is increasing on the island and a OPET OLA - Caribbean

The key issues impacting upon the energy scenario on the Island are: a) fossil fuels meet primary energy supply for power generation on the island, and the fuel wood partially meets industrial and domestic demand for fuel; b) most of the enterprises operate at sub-optimal level because of their inability to meet costs on fuel-oil and diesel at commercial rates in foreign exchange (obsolete technologies and lack of market linkages further compound their problems); c) supply of both, fuel-oil and diesel, is by ships from the main island, hence transhipment remains unreliable, especially during the hurricane season; d) energy conservation and efficiency measures can play a significant role in enhancing industrial competitiveness ; and e) excessive emissions from fossil fuels continue to degrade the local environment.

As of 2001, the island’s installed electricity generation capacity was entirely met by fuel-oil and diesel based generators. Against a peak demand for 16.1 MW, total electricity generation was 94.9 GWh. The use of electricity on the island can be broken down into four main sectors: residential (households), commercial, agriculture and industrial. Electricity generation accounts for 54 percent of the island's primary energy use, and a majority of commercial energy imports.

Three fuel oil MAN generators, 3.5 MW each, supply the main electrical grid, which covers 99 percent of the island’s population with only the village of Cocodrilo not being connected to the main grid. The residents of Cocodrilo are supplied with electricity (peak demand 25 kW) for 12 hours every day produced from two 37 kW diesel generators.

The remaining 46 percent of total primary energy use was consumed in the following way: 23 percent by the transport sector (15 percent in the form of diesel for trucking activities and 8 percent in the form of gasoline for use in private cars); 6 percent in the form of fuel and diesel oil to fuel industrial boilers and cookers, 6 percent by the residential sector in the form of LPG for cooking, and the remaining 11 percent is consumed by other industrial and agricultural uses. The residential sector also consumed the renewable energy resources in the form of fuel wood and charcoal to partially meet their energy needs on the island.

PRIORITY

The National Program for Development of Local Energy Sources in Cuba places a high priority on the development of indigenous and environmentally benign renewable resources/options for rural/urban areas. These options, among others, include biomass, wind, solar, and small hydro technologies in order to meet growing demand for electricity, reducing oil imports and preserving the environment. Given the general shortage of fossil fuels in the country, exploring alternative sources of energy has also been accorded high priority by the Government.

The main objective of the project is to remove the key barriers to the development of renewable energy technologies for power generation on commercial basis on the Isla de Juventud, and reduce the island’s economic vulnerability and environmental stress. In line with the national priorities, this project will help Isla de la Juventud to improve its energy security, reduce environmental risks such as oil spills, and use a more sustainable approach to meet local electricity needs. Besides power generation, the project will also help increase the industrial processing capacity, and enhance employment opportunities by using renewables to meet its growing energy needs for process heat and other allied services.

Sustainability of the project would be ensured through active participation of the private enterprises on the Isla de la Juventud in the following business cum investment models: • • • •

Biomass gasifier model for power generation Biomass gasifier model for process heat Biomass fuel production model Wind farm model EXECUTING UNIT AND INSTITUTIONAL FRAMEWORK

For the GEF, UNEP is the Implementing Agency, which will oversee the successful achievement of the project objectives, while UNIDO as executing agency under expanded opportunities will execute the project activities. The national counterpart agency will be the Centre for Management of Priority Programmes and Projects (GEPROP) under the Ministry of Science, Technology and Environment, Government of Cuba, and Compañía Fiduciaria – a national level trust fund financial and banking company.

CHARACTERISTICS OF INVESTMENT

Relevant featuring of project investment is presented below. GEF will provide US $ 5.337 million, out of which US$ 3.279 million will be earmarked for technical assistance activities such as building local and national capacity through training, establishment of policy and regulatory framework, power purchase agreements and the project management structure to coordinate project activities. Rest of the GEF funding to the tune of US $ 2.058 million will contribute to setting up of a new and innovative financial mechanism – a Risk and Replication Management fund (US $ 1.92 million), which essentially will be an interest free loan for promoting private sector investments during the demonstration phase, and the rest will meet costs on capacity building of financial institutions in renewable energy project appraisals and managing revolving funds.

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ECONOMIC PARAMETERS

Summary of financial structure of the project (in million US $).

Activity 1.

Establishment of a policy and regulatory framework to provide enabling environment to the development of renewable energy Activity 2.

Building local and national capacity to utilize the commercial potential of renewable energy technologies Activity 3.

Setting up appropriate financial mechanisms to encourage private sector investment in renewable energy projects Activity 4.

Implementation of business models to demonstrate commercial feasibility of renewable energy technologies for power generation and productive use Activity 5.

Establishment of a project management structure for coordination, monitoring and dissemination of results from the project (UNEP/UNIDO) TOTAL

• Total Cost (million USD)0.200 • Cuban Government contribution 0.030 • GEF contribution 0.170 • UNEP / UNIDO 0.000 • Private investment 0.000

CONTACT

Executive Contact : Dr. Oscar L. Jiménez Position : National Project Coordinator.

GEPROP. Ministry : CITMA Tel : (537) 2029076 Fax : (537) 2029076 E-mail : oscar@geprop.cu

• Total Cost (million USD) 2.216 • Cuban Government contribution 0.255 • GEF contribution 1.791 • UNEP / UNIDO 0.170 • Private investment 0.000 • Total Cost (million USD) 2.096 • Cuban Government contribution 0.038 • GEF contribution 2.058 • UNEP / UNIDO 0.000 • Private investment 0.000 • Total Cost (million USD) 10.679 • Cuban Government contribution 1.211 • GEF contribution 0.808 • UNEP / UNIDO 0.000 • Private investment 8.660 • Total Cost (million USD) 0.650 • Cuban Government contribution 0.090 • GEF contribution 0.510 • UNEP / UNIDO 0.050 • Private investment 0.000 • Total Cost (million USD) 15.841 • Cuban Government contribution 1.624 • GEF contribution 5.337 • UNEP / UNIDO 0.220 • Private investment 8.660

NEXT STAGE AND TOTAL TO BE FUNDED

The project has already been approved by GEF and currently official project documents have been sent to parties involved for being signed. A leasing is also envisaged for allowing international investors to participating in project setting up.

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OLA – Caribbean

CUBA

Foreign Investment act Law number (77) Foreign Investment act RICARDO ALARCON DE QUESADA, President of the Republic of Cuba's National Assembly of People's Power, LET IT BE KNOWN: That the Republic of Cuba's National Assembly of People's Power, in session on September 5th, 1995, during the Fifth Regular Session of the Fourth Legislature, has approved the following: WHEREAS: In today's world, without the existence of the socialist bloc, with a globalizing world economy and strong hegemonistic tendencies in the economic, political and military fields, Cuba, in order to preserve its accomplishments despite the fierce blockade to which it is subjected; lacking capital, certain kinds of technology and often markets; and in need of restructuring its industry; can benefit from foreign investment, on the basis of the strictest respect for national independence and sovereignty, given that such investment can usher in the introduction of innovative and advanced technology, the modernization of its industries, greater efficiency in production, the creation of new jobs, improvement in the quality of the products and services it offers, cost reduction, greater competitiveness abroad, and access to certain markets, which as a whole would boost the efforts the country must undertake in its economic and social development.

WHEREAS: The Constitution of the Republic, as it was modified in 1992, recognizes among other forms of property, joint ventures, companies and economic associations which are established in conformity with the law and, in regard to state property and in exceptional cases, when such action is deemed useful and necessary for the country, provides for the partial or total transference of ownership of economic objectives with the goal of developing them.

WHEREAS: The changes taking place in the national economy, aimed at actively promoting and boosting the investment of foreign capital in Cuba and broadening the possibilities in terms of the forms and areas of investment, among other essential factors, surpass the legal possibilities offered until now by Decree-Law No. 50, "On Economic Association among Cuban and Foreign Entities," approved on February 15, 1982.

WHEREAS: In order to broaden and facilitate foreign participation in the nation's economy, it is suitable to adopt new legislation which provides greater security and guarantees to the foreign investor and allows the country to obtain financial resources, technology and new markets in any productive sector and in the service sector, when mutual interests have been identified, for the fundamental purpose of achieving sustainable development in the country and a recovery of the national economy.

THEREFORE: The National Assembly of People's Power, making use of the authority conferred upon it by Article 75, paragraph b) of the Constitution of the Republic, resolves to issue the following LAW NUMBER 77 FOREIGN INVESTMENT ACT CHAPTER I PURPOSE AND CONTENT Article 1.1. This Act has the purpose of promoting and encouraging foreign investment in the territory of the Republic of Cuba., in order to

carry out profitable activities which contribute to the country's economic capacity and sustainable development, on the basis of respect for the country's sovereignty and independence, and the protection and rational use of natural resources; and of establishing, for that purpose, the basic legal regulations under which this can be realized.

2. The norms contained in this Act comprise, among other elements, the guarantees granted to investors, the sectors of the economy which can receive foreign investments, the forms in which they can be utilized, the various types of investments, the procedure for their authorization, the regulations for these investments relating to banking, taxation, and labor, and the norms related to the protection of the environment and the rational use of natural resources.

CHAPTER II GLOSSARY Article 2. This Act recognizes the following terms and their definitions: a) International economic association: Joint action by one or more national investors and one or more foreign investors within the national territory for the production of goods, the offering of services or both for profit, in its two forms, which consist of joint ventures and international economic association contracts. b) Authorization: Document issued by the Executive Committee of the Council of Ministers or a Government Commission, for the realization of one of the forms of foreign investment authorized by this Act, for a specified period. c) Foreign capital: Capital originating outside the country, as well as part of the profits or dividends belonging to the foreign investor which are reinvested in accordance with this Act. d) Top management posts: Positions belonging to members of the management and administration of the joint venture and totally foreign capital company, as well as the representatives of the parties to international economic association contracts and the management personnel of totally foreign capital companies. e) Government Commission: Commission designated by the Executive Committee of the Council of Ministers with the authority to approve foreign capital investments in its area of competence, as stipulated in this Act. f) Administrative concession: Unilateral action on the part of the Government of the Republic, whereby an entity is granted the right to exploit a public service or a natural resource, or to build or utilize a public work under terms and conditions to be determined. g) International economic association contract: Pact or agreement among one or more national investors and one or more foreign investors, for the realization of actions fitting an international economic association, even without the establishment of a legal entity distinct from each of the parties. h) Totally foreign capital company: Commercial entity with foreign capital, without the involvement of any national investor. i) Joint venture: Cuban commercial company which adopts the form of a nominal share corporation, in which one or more national investors and one or more foreign investors participate. j) Employing entity: Cuban organization with legal status, authorized to establish a contract with a joint venture or a totally

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foreign capital company, through which it supplies, at the company's request, the workers of various skills needed by the company, whoare employed by that organization. k) Assets: Wages, income and other remuneration, as well as increases, compensations and other additional payments received by Cuban and foreign workers, with the exception of those stemming from the economic stimulation fund, if it exists. l) Foreign investment: Capital input by foreign investors, in any of the forms stipulated by this Act. m) Foreign investor: The person or corporation, with a foreign domicile and foreign capital, that becomes a shareholder in a joint venture or participates in a totally foreign capital company, or that is party to an international economic association contract. n) National investor: State company or entity with legal status, a corporation or other Cuban national entity whose address is in national territory and which becomes a shareholder of a joint venture or is party to an international economic association contract.

CHAPTER III GUARANTEES FOR INVESTORS Article 3: The foreign investors within Cuban national territory enjoy full protection and security and their assets cannot be expropriated, except for reasons of the public good or in the interest of society, as declared by the Government, in accordance with the Constitution of the Republic, current legislation, and international agreements covering the mutual promotion and protection of investments undertaken in Cuba. In the case of expropriation, indemnification is made in freely convertible currency and is equal to the commercial value established by mutual agreement.

If an agreement is not reached, the price is set by an organization with internationally recognized prestige in the assessment of business assets, authorized by the Ministry of Finance and Prices and contracted for that purpose with the assent of all parties, or of the foreign investor and the Ministry of Foreign Investment and Economic Cooperation, if the affected party is a totally foreign capital company.

Article 4.1. The period of time granted for the development of operations by a joint venture, the parties to an international economic association contract or a totally foreign capital company, can be extended by the same authority that authorized the entities, as long as it is requested by the interested parties before the end of the period.

2.

If the period is not extended, at the time of its expiration the joint venture, international economic association contract or totally foreign capital company shall be liquidated, as stipulated in the constituent documents and existing legislation, and the portion due to the foreign investor shall be paid in freely convertible currency, except in the case of an express agreement to the contrary.

Article 5. Foreign investments are equally protected against third party reclamations which comply with the law and are in accordance with Cuban laws and rulings of national courts of justice.

Article 6. 1. At any moment, subject to the consent of all parties, the foreign investor in an international economic association can sell or transfer its total or partial share of the company to the State or a third party, subject to government authorization, receiving the corresponding price in freely convertible currency, except in the case of an express agreement to the contrary.

2.

The foreign investor in a totally foreign capital company can at any moment sell or transfer, in any form, to the State or a third party and subject to authorization by the Government, its total or partial share of the company, receiving the corresponding price in freely convertible currency, except in the case of an express agreement to the contrary.

Article 7. The corresponding price to be paid to the foreign investor, in the cases discussed in Articles 4 and 6 of this Act, is set with the consent of both parties, or when that is not feasible, by an organization with internationally recognized prestige in the assessment of businesses and authorized by the Ministry of Finance and Prices to operate in national territory, and contracted for that purpose jointly by all parties, or by agreement of the foreign investor in a totally foreign capital company and the Ministry of Foreign Investment and Economic Cooperation.

Article 8. The State guarantees the foreign investor the free transference abroad, in freely convertible currency, free from taxes or any fee related to such transference, of:

a) Net profits or dividends obtained as a result of the investment; and b) The moneys due him or her in the cases discussed in Articles 3, 4 and 6 of this Act. 2. Foreign citizens working in a joint venture, for the parties in any other form of international economic associations or in a totally foreign capital company, as long as they are not permanent residents in Cuba, have the right to transfer abroad the income they receive, within stipulated amounts and according to the other regulations issued by the National Bank of Cuba.

Article 9. Joint ventures and the parties to international economic association contracts are obliged to pay taxes in line with the special regulations stipulated by this Act, until the expiration of the period for which they were authorized.

The stipulations made in the previous paragraph are not applicable to the rates, contributions (with the exception of social security contributions) and formal duties established in current legislation, nor to the payment obligations included in the Mining Act of December 21, 1994, or other legal provisions which may be issued in regard to natural resources, which shall be observed in the manner and extent stipulated in those laws.

CHAPTER IV SECTORS OPEN TO FOREIGN INVESTMENT Article 10. Foreign investments may be authorized in all sectors, excluding health and education services for the population and the armed forces institutions, with the exception of the latter's commercial system.

CHAPTER V FOREIGN INVESTMENTS FIRST SECTION MANIFESTATIONS AND FORMS OF FOREIGN INVESTMENT Article 11. For the purposes of this Act, foreign investments are defined as: a) Direct investments, through which the foreign investor participates in an effective manner in the management of the joint venture or totally foreign capital company, and through which the foreign investor makes his or her own contributions in international economic association contracts; and b) Investments in stocks or other securities or bonds, either public or private, which do not fit the definition of direct investments.

Article 12. Foreign investments shall adopt one of the following forms: a) Joint venture; b) International economic association contract; or c) Totally foreign capital company.

SECOND SECTION JOINT VENTURES Article 13. 1. Joint ventures imply the establishment of a legal status distinct from that of any one of the parties. They adopt the form of nominal share corporations and current legislation in this field applies to them.

2.

The proportions of capital stock which should be contributed by the foreign investor and the national investor are agreed upon by both partners and defined as part of the authorization.

3.

The establishment of a joint venture must take the form of a public document, and annexes to this notarized document include the agreement of economic association, the bylaws governing the company and the authorization.

The agreement of economic association contains the fundamental pacts between the partners for the realization and development of the joint venture's operations, and for the achievement of its objectives, among them the guarantees of Cuban participation in the administration or joint administration of the company and the assurances of a market for the company's products or services; the bases of its accounting system and the estimate and distribution of profits.

The joint venture's bylaws shall include provisions related to the corporation's organization and operation, which must cover the general shareholder's meeting, its characteristics and organization; the necessary quorum and the requirements for exercising the right to vote

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at the general shareholders' meeting; the structure and characteristics of the management and administrative body; the method by which these bodies make their decisions, both in the general shareholders' meeting and within the management and administrative body, which could range from a simple majority to unanimity; provisions for dissolution and the procedure for liquidating the company; as well as other stipulations resulting from the current legislation in the field, this Act and the agreements between the parties.

4.

If the public document does not designate the person or persons who shall administer the joint venture, the first general shareholders' meeting can be held and the members of the management and administrative body can be designated, in line with the bylaws.

5. Once the joint venture is created, the partners cannot be changed except with the consent of the parties and the approval of the authority that granted the authorization.

A change of partners is defined as the substitution of the foreign partner by another person or company, or of the Cuban partner by another person or company.

6. Joint ventures can establish offices, representations, branch offices and affiliates, in national territory and abroad, as well as participating in entities abroad.

7. A joint enterprise acquires legal status when it is included in the Registry maintained by the Republic of Cuba's Chamber of Commerce regarding these activities.

THIRD SECTION INTERNATIONAL ECONOMIC ASSOCIATION CONTRACTS Article 14. 1. International economic association contracts have the following characteristics, among others: a) They do not imply a legal entity separate from those of the contracting parties. b) They may have the objective of carrying out any activity authorized by the contracting parties. c) The contracting parties are free to stipulate all the pacts and clauses that they deem to be in accordance with their interests, as long as they do not infringe on the authorized objective, the conditions of the authorization or current legislation. d) Each contracting party makes separate contributions, which constitute a cumulative amount which they own at all times, and even though they do not constitute capital stock, it is in their interest to establish a common fund, as long as the portion of ownership belonging to each of the parties is well defined.

2.

The text of the contract states the proportion of taxes to be paid by each party and the times of the year in which profits are distributed among them, after meeting their fiscal obligations, as well as the responsibility for losses, if there are any.

3.

In an international economic association contract, the party which carries out an act of management which benefits all parties is fully responsible to third parties, but among the parties each one is responsible to the extent or proportion stipulated in the contract.

4.

Once an international economic association contract is granted, the participants cannot be changed, except with the agreement of the parties and the approval of the authority that granted the authorization.

5.

An international economic association contract must be presented in the form of a public document in order to be approved and goes into effect the moment it is included in the Registry maintained by the Republic of Cuba's Chamber of Commerce regarding these activities.

FOURTH SECTION TOTALLY FOREIGN CAPITAL COMPANY Article 15 .1. In the totally foreign capital company, the foreign investor manages the company, enjoys all the rights pertinent to it and is responsible for all the obligations described in the authorization.

2.

The foreign investor involved in a totally foreign capital company may act as an individual or a corporation within Cuban national territory: a) Through the creation of a foreign entity of which the investor is the owner, within the form of a stock corporation and by

being included in the Registry of the Republic of Cuba's Chamber of Commerce; or b) By being included in the Republic of Cuba's Chamber of Commerce and acting independently.

CHAPTER VI REAL ESTATE INVESTMENTS Article 16 .1. Under the authorization of this Act, investments can be made in real estate and acquire ownership and other property rights over that real estate.

2.

The investments in real estate discussed in the previous paragraph can be utilized for: a) Housing and other structures destined for private residence or tourism activities of persons who are not permanent residents in Cuba; b) Housing or offices of foreign companies; c) Real estate development for use in tourism.

Article 17. Investments consisting of the purchase of real estate which constitute corporate activity are considered direct investments.

Article 18. The conditions and terms under which the purchase and transfer of real estate discussed in Article 16 of this Act are determined in the authorization and must be in accord with current legislation.

CHAPTER VII CONTRIBUTIONS AND THEIR VALUATION Article 19 .1. For the purposes of this Act, contributions are defined as the following: a) Freely convertible currency; b) Machinery, equipment or other physical or tangible goods; c) Intellectual property rights and other rights over intangible goods; d) Property rights over personal items and real estate, and other rights over these, including usufruct and surface rights; and e) Other goods and rights.

The contributions which do not consist of freely convertible currency shall be assessed in that currency.

2. Transfer in favor of national investors of property and other rights over state property, for the purposes of contributions by them, shall be carried out under the principles established in the Constitution of the Republic, and under the prior certification of the Ministry of Finance and Prices, in consultation with the corresponding agency and with the approval of the Executive Committee of the Council of Ministers.

The payments of intellectual property rights and other rights over intangible goods shall be covered by current legislation on the matter.

3. Payments in freely convertible currency are set according to their value on the international market and conversion into the national currency, for accounting purposes, shall be realized according to the National Bank of Cuba's exchange rates. The freely convertible currency which constitutes payment of foreign capital should enter the country through the authorized banking entity for use in operations in the national territory.

4. The payments which are not made in freely convertible currency, except those consisting of intellectual property rights and other rights over intangible goods, and which are destined for the capital stock of joint enterprises, or which constitute payments in international economic association contracts, are valued according to the methods freely agreed upon by the investors. Their value can be determined with the aid of the corresponding expert certifications drawn up by entities under the authority of the Ministry of Finance and Prices.

5. The evaluation of the contributions that are not made in freely convertible currency, except for those in payment for intellectual property rights and other rights over intangible goods, is always made with the aid of expert certifications drawn up by entities under the authority of the Ministry of Finance and Prices.

6. Payments consisting of intellectual property and other rights over intangible goods shall be assessed by methods freely agreed upon by all the national and international investors and between the foreign investor and the Ministry of Foreign Investment and Economic Cooperation, in the case of payments to a totally foreign capital enterprise.

CHAPTER VIII

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NEGOTIATIONS INVESTMENT

AND

AUTHORIZATION

OF

FOREIGN

Article 20. 1. For the creation of an international economic association, the national investor must negotiate with the foreign investor every aspect of the investment, including its economic feasibility, the respective payments, the association's form of management and administration, as well as the legal document needed for its formalization.

2. In the case of a totally foreign capital company, the Ministry of Foreign Investment and Economic Cooperation indicates to the investor the responsible Cuban entity in the sector, subsector or economic activity for which the investment is planned, and the investor must analyze its proposition with that entity and obtain the corresponding written approval.

Article 21. 1. Authorization for foreign investments in national territory is granted by the Executive Committee of the Council of Ministers, or by a commission designated for that purpose.

2. The Executive Committee of the Council of Ministers has the exclusive power to authorize foreign investments in any of the sectors listed below or those with the following characteristics: a) When the total sum of payments made by foreign and national investors is greater than the equivalent of ten (10) million U.S. dollars in freely convertible currency; b) In the case of totally foreign capital companies; c) Investments made in public services such as transportation, communications, aqueducts, electricity, or for the construction or exploitation of a public work; d) When a foreign company with capital shares owned by a foreign state is involved; e) When the investment involves the exploitation of a natural resource, in accordance with legislation for the protection of the environment and rational use of natural resources; f) Investments which include the transference of state property or of a real right which is the property of the State; and g) In the case of the armed forces' commercial system.

3. The Government Commission has the power to authorize foreign investments not mentioned in the previous paragraph.

Article 22. The foreign investor who expects to obtain authorization for a totally foreign capital company shall present its request, jointly with the corresponding Cuban entity, to the Ministry of Foreign Investment and Economic Cooperation.

Article 23. 1. To set up a joint venture or establish an international economic association contract, the written request should be presented jointly to the Ministry of Foreign Investment and Economic Cooperation by the foreign investor and the national investor.

2.

The investment request is presented along with the following documents. a) For the establishment of joint ventures and the granting of international economic association contracts: draft versions of the economic association agreement and the bylaws of the proposed joint venture or the contract to be granted, as well as an economic feasibility study, in both cases. b) In regard to the foreign investor: documentation attesting to his or her identity and solvency, as well as proof that he or she is a legitimate representative of the corporation, when applicable. c) In regard to the national investor, in the case of a state enterprise or entity: express written acceptance granted by the maximum authority in the sector, subsector or economic activity in which the foreign investment is being made; in the case of a commercial association or civilian service organization based on totally Cuban capital, express authorization of the general shareholders' meeting, which grants the specific authority to sign the corresponding documents with the foreign investor. d) When the foreign investor proposes the constitution of a totally foreign capital company: acceptance by the maximum authority of the sector, subsector or economic activity for which the investment is planned, the text of the bylaws, an economic feasibility study, documentation attesting to the foreign investor's identity and solvency, and in the case of a corporation, proof that the foreign investor is a legitimate representative authorized to make the specific investment. e) The document accompanying the investment request must be duly authenticated, when pertinent.

3.

In order for the Ministry of Foreign Investment and Economic Cooperation for accept the request, it must be presented with the formalities described in the present Article.

4.

Once the request is accepted by the Ministry of Foreign Investment and Economic Cooperation, it shall be submitted for consultation to all the corresponding agencies and institutions, in order to obtain their report on matters pertinent to them.

5. Once the above procedures are completed, the Ministry of Foreign Investment and Economic Cooperation shall refer the accumulated documentation and its evaluation to the Executive Committee of the Council of Ministers or the Government Commission, as the case may be, so that it may make the pertinent decision.

6. The decision denying or approving the foreign investment is handed down within a period of sixty (60) days from the date on which the request was presented, and the applicants are notified.

Article 24. 1. The authorization contains the conditions under which is it granted and the objective and time period of the form of investment in question.

2. If the objective of the approved investment is the exploitation of a public service or a natural resource, or the construction and exploitation of a public work, the Executive Committee of the Council of Ministers may grant the corresponding administrative concession, under the terms and conditions it establishes.

Article 25. The conditions established in the authorization can be clarified through the Ministry of Foreign Investment and Economic Cooperation, at the request of the parties.

CHAPTER IX THE BANKING SYSTEM Article 26. 1. Joint ventures, foreign investors and national investors which are party to international economic association contracts, jointly or individually, and totally foreign capital companies shall open accounts in freely convertible currency in any bank in the National Banking System, through which they shall receive and make payments related to their operations.

2.

Joint ventures and national investors who are parties to international economic association contracts may open and maintain accounts in freely convertible currency in banks located abroad, with the authorization of the National Bank of Cuba.

Article 27. Joint ventures, parties to international economic association contracts and totally foreign capital companies can be authorized on an exceptional basis by the Executive Committee of the Council of Ministers to effect certain charges and payments in nonconvertible national currency.

Article 28. Joint ventures, foreign investors and national investors who are parties to international economic association contracts, and totally foreign capital companies can arrange loans in foreign currency: a) With a bank in the National Banking System or a financial entity approved by the National Bank of Cuba; b) With banks or financial entities abroad, in accordance with existing legal regulations covering this matter.

CHAPTER X EXPORT AND IMPORT SYSTEM Article 29. Joint ventures, national and foreign investors who are parties to international economic association contracts, and totally foreign capital companies have the right, in accordance with established legislation in the field, to export their products directly and to import, also directly, whatever is needed for their purposes.

CHAPTER XI LABOR SYSTEM Article 30. Foreign investment activities must observe the labor and social security legislation in effect in Cuba, with the adjustments included in this Act. Article 31. 1. The workers in activities corresponding to foreign investments shall be, as a rule, Cubans or foreigners permanently residing in Cuba.

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2. However, the management and administrative bodies of joint ventures or totally foreign capital companies, or the parties to international economic association contracts, may determine that certain top administrative positions or some posts of a technical nature shall be filled by persons who are not permanent residents in the country and, in those cases, determine the labor conditions to be applied and the rights and obligations of those workers.

Nonpermanent residents in the country who are contracted are subject to the country's current legislation covering immigration and foreigners.

Article 32 1. Joint ventures, the parties to international economic association contracts and totally foreign capital companies may be authorized to create an economic stimulus fund for Cubans or permanent residents in Cuba who are working in activities corresponding to foreign investments.

2. The contributions to the economic stimulus fund shall be made out of earned profits. The amount of these contributions shall be agreed upon between the joint ventures, foreign investors and national investors who are party to international economic association contracts, and totally foreign capital companies, on the one hand, and the Ministry of Foreign Investment and Economic Cooperation, on the other hand.

Article 33. 1. The workers in joint ventures who are Cuban or permanent residents in Cuba, with the exception of the members of the management or administration, are contracted by an employing entity proposed by the Ministry of Foreign Investment and Economic Cooperation, and authorized by the Ministry of Labor and Social Security.

The members of the management or administration of a joint venture are designated by the general shareholders' meeting and hired directly by the joint venture.

Only in exceptional cases, with the proper authorization, may a joint venture directly employ all the persons who work in that company, and always in accordance with current legal provisions in the field of hiring.

2. The persons working for the parties to international economic association contracts are contracted by the Cuban party, in accordance with current legal provisions in the field of employment.

3. In totally foreign capital companies, the services of Cuban workers and foreign workers residing permanently in Cuba, with the exception of the members of the management and administrative body, shall be hired through a contract between the company and an employing entity proposed by the Ministry of Foreign Investment and Economic Cooperation, and authorized by the Ministry of Labor and Social Security.

The members of the management and administration of the totally foreign capital company are designated by the company and directly hired by it.

4. Payments to Cuban workers and foreign workers residing permanently in Cuba are made in national currency which must be obtained beforehand from convertible foreign currency, except in the case described in Article 27 of this Act. Article 34. 1. The employing entity discussed in the previous Article individually contracts and directly hires Cuban workers and permanent residents. This employing entity pays those workers their wages.

2. When a joint venture or totally foreign capital company considers that a specific worker does not meet the requirements of the job, it can request that the employing entity replace that worker with another.

Any labor dispute is settled with the employing entity, which pays the worker, at its own expense, the indemnification to which he or she is entitled, determined by the competent authorities. In pertinent cases, the joint venture or totally foreign capital company compensates the employing entity for such payments, in accordance with the procedure established, and always in compliance with existing legislation.

Article 35. Notwithstanding what is stipulated in the preceding articles of this Chapter, the authorization approving the foreign investment can in exceptional cases establish special labor regulations.

Article 36. The technological advances consisting of innovations and other tangible goods which are covered by intellectual property law and which are developed within the framework of an international economic association or by Cuban workers in a foreign capital company are covered under current legislation in the field.

Article 37. The Ministry of Labor and Social Security is empowered to issue as many complementary legal provisions is it considers necessary for the best application of what is described in this Chapter, especially in the fields of hiring and labor discipline.

CHAPTER XII SPECIAL TAXATION AND DUTIES SYSTEM Article 38. Joint ventures, foreign investors and national investors who are parties to an international economic association contract are subject to the following fiscal obligations: a) Income tax; b) Tax covering the utilization of the labor force and contributions to social security; c) Customs duties and other payments; d) Land transportation tax, covering the ownership or possession of land motor vehicles; and e) Documents tax, which covers rates and payments when applying for, obtaining or renewing certain documents.

Article 39. For the purpose of this Act, the payment of taxes by the persons and companies mentioned in the previous Article carries the following characteristics: a) Income taxes are levied at a rate of thirty percent (30%) of net taxable income. In cases considered in the nation's interest, the Executive Committee of the Council of Ministers can exempt all or part of the tax on net income that is reinvested in the country. b) When the exploitation of renewable or nonrenewable natural resources is involved, the income tax rate can be raised by decision of the Executive Committee of the Council of Ministers. In that case, the taxation rate can be raised as high as fifty percent (50%). c) In regard to the tax on utilization of the labor force and social security contributions, the following is established: 1. For utilization of the labor force, a discount is granted in the current taxation rate, to a rate of eleven percent (11%).

2. Social security contributions are covered by a taxation rate of fourteen percent (14%).

3. The taxation rates expressed in the two previous clauses are applied on the total wages and other income from any source received by the workers, except what is turned over to them as economic stimulus. d) Foreign investors who are partners in joint ventures or parties to international economic association contacts are exempted from paying taxes on personal income obtained from the businesses' profits.

Article 40. The totally foreign capital company is obliged throughout the duration of its operations to pay taxes in accordance with the current tax legislation.

Article 41. For the purposes of this Act, persons and companies discussed in the present Chapter may be granted special customs dispensations, in accordance with existing legislation.

Article 42. The payment of customs tariffs, duties and other fees shall be realized in freely convertible currency, even in those cases in which the amount is expressed in national currency, discounting the exceptional cases which may be established by the Executive Committee of the Council of Ministers.

Article 43. The Ministry of Finance and Prices, after consulting with the Ministry of Foreign Investment and Economic Cooperation and taking into account the benefits and size of the investment, the recovery of capital and the indications made by the Executive Committee of the Council of Ministers for priority sectors of the economy and the benefits that could be accrued by the national economy, may grant total or partial exemptions, on a temporary basis, or grant the benefits within its jurisdiction, in relation to the special taxation system.

Article 44. Joint ventures, the parties to international economic association contracts and totally foreign capital companies are subject to the "Norms for Assessing the Most Significant Assets and Liabilities" issued by the Ministry of Finance and Prices. Such persons can freely determine the accounting system which most suits them, as long as the adopted system conforms to universally accepted accounting principles and meets fiscal demands.

CHAPTER XIII RESERVES AND INSURANCE Article 45. 1. Joint ventures, foreign and national investors party to international economic association contracts and totally foreign capital companies are obliged to establish reserves, charged to profits, to cover contingencies that may arise in their operations.

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2. The procedure for establishing, utilizing and liquidating the reserves foreseen in the previous clause is regulated by the Ministry of Finance and Prices.

Article 46. Without detriment to the reserves discussed in the previous Article, joint ventures, foreign and national investors party to international economic association contracts, and totally foreign capital companies may establish other reserves on a voluntary basis, in accordance with the regulations of the Ministry of Finance and Prices.

Article 47. 1. Joint ventures, foreign and national investors who are parties to international economic association contracts, and totally foreign capital companies should establish insurance policies, with companies authorized by the Ministry of Finance and Prices to operate in the country, for the protection of goods, properties, operations and any other activities or against any risks as necessary, on the basis of premiums and other contractual conditions which are competitive internationally.

2. Industrial, tourism or other installations or lands leased by state enterprises or other national organizations are insured by the leasee in favor of the leasor, in accordance with the conditions foreseen in the previous clause.

CHAPTER XIV REGISTRY AND FINANCIAL INFORMATION Article 48. Joint ventures, national and foreign investors party to international economic association contracts, and totally foreign capital companies before commencing their operations, shall ber inscribed in the Registry maintained on these activities by the Republic of Cuba's Chamber of Commerce, within a period of thirty (30) days following the date of authorization.

Article 49. 1. Persons and companies mentioned in the present Chapter shall present to the Ministry of Foreign Investment and Economic Cooperation, within a period of ninety (90) days following the end of their fiscal year, an annual report of their operations in that period.

2. The presentation of an annual report by the persons and companies covered by the present Chapter is independent from their obligations to provide information to the Ministry of Finance and Prices, the corresponding tax administration and any others that may be established for statistical purposes.

CHAPTER XV DUTY-FREE ZONES AND INDUSTRIAL PARKS Article 50. With the goal of stimulating exports and international trade, the Executive Committee of the Council of Ministers may authorize the establishment of duty-free zones and industrial parks, in delimited areas of national territory.

Article 51. 1. Duty-free zones are defined as areas in which, by decision of the Executive Committee of the Council of Ministers, a special system can be established covering customs duties, exchange rates, taxation, labor, migration, public order, capital investment and foreign trade, and in which foreign investors can participate for the purposes of financial operations, importing, exporting, storage, productive activities or reexporting.

2. Industrial parks are defined as areas in which, by decision of the Executive Committee of the Council of Ministers, a special system can be established covering customs duties, taxation, labor, capital investment and foreign trade, for the development of productive activities with the participation of foreign capital.

Article 52. The authorizations of foreign investments, if pertinent, may consign particular facilities and incentives offered to foreign investors in the duty-free zones and industrial parks.

Article 53. The establishment and norms related to the operation of duty-free zones and industrial parks shall be regulated by special legislation issued for that purpose.

during the course of the investment, environmental conservation and the rational use of natural resources shall be carefully undertaken.

Article 55. The Ministry of Foreign Investment and Economic Cooperation, in pertinent cases, submits the investment proposals it receives for the consideration of the Ministry of Science, Technology and the Environment, so that the latter may evaluate the investment's suitability from the environmental point of view and determine whether an environmental impact evaluation is required, as well as the suitability of granting the pertinent environmental licenses and establishing a control and inspection program in accordance with current legislation.

Article 56. 1. The Ministry of Science, Technology and the Environment institutes the measures which may be required to properly control situations that could lead to damage, dangers or risks for the environment and the rational use of natural resources.

2. The person or company responsible for the damage or harm is obliged to reestablish the previous environmental situation, repair the material damage and indemnify the injured parties.

CHAPTER XVII SOLUTION OF CONFLICTS Article 57. 1. The conflicts which may arise in relations between partners of a joint venture, or between foreign investors and national investors party to an international economic association contract, or between partners in a totally foreign capital company in the form of a nominal share corporation shall be resolved in accordance with the founding documents.

2. The same rule applies when the conflict arises between one or more of the foreign partners and the joint venture or totally foreign capital company to which the partner or partners belong.

Article 58. Litigation over the execution of economic contracts between joint ventures, foreign investors and national investors party to international economic association contracts or totally foreign capital companies, on the one hand, and state enterprises or other national entities are the jurisdiction of the economic division of the People's Courts established by the Governing Council of the People's Supreme Court.

SPECIAL PROVISION Joint ventures, national and foreign investors party to international economic association contracts, and totally foreign capital companies are subject to any regulations that may be established concerning protection against catastrophes and natural disasters.

TEMPORARY PROVISIONS FIRST: On the date this Act goes into effect, it applies to the existing and operating joint venture and other forms of international economic association. Nonetheless, the benefits granted by DecreeLaw No. 50, issued February 15, 1982, shall remain in effect during the whole period in which an existing international economic association is authorized.

SECOND: On the date this Act goes into effect, it applies to the requests for foreign investment authorization which are being processed. The Ministry of Foreign Investment and Economic Cooperation and the current applicants shall determine how to proceed.

THIRD: The complementary provisions issued by the various central state administrative agencies for the proper application and execution of the norms contained in Decree-Law No. 50 of February 15, 1982, shall continue to be observed on an individual basis, as long as they do not conflict with this Act. The aforementioned agencies, in a period of no more than three months from the date this Act goes into effect, shall review the aforementioned norms and bring them into harmony with the provisions of the Act.

CHAPTER XVI ENVIRONMENTAL PROTECTION

FINAL PROVISIONS

Article 54. Foreign investment is conceived and stimulated in the context of the country's sustainable development, which implies that

FIRST: Decree-Law No. 50, "On Economic Association among Cuban and Foreign Entities," issued on February 15, 1982, as well as any other

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legal provisions contrary to the contents of this Act, are hereby repealed, and this Act shall be in force as of its publication in the Gazeta Oficial de la RepĂşblica.

SECOND: The Executive Committee of the Council of Ministers and the central state administrative agencies are authorized, in accordance with their jurisdictions, to issue whatever provisions they consider necessary for the proper fulfillment of this Act. APPROVED on the floor of the National Assembly of People's Power, International Conference Center, City of Havana, on the fifth day of the month of September of the year nineteen ninety-five. (signed) RICARDO ALARCON DE QUESADA Published in a special issue of the Official Gazette, Number 3, dated September 6th, 1995.

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Main Contacts GEPROP Division for Innovation and Energy (GEPROP) Contact Person: Alfredo Curbelo Function: Director Address Calle 20 No 4112 e/41 y 47, Playa La Habana - CUBA Tel: 53-7 2027096 Fax: 53-7 2029372 E-mail: acurbelo@geprop.cu

Areas Isla de la Juventud Executive Contact : Dr. Oscar L. Jiménez Position : National Project Coordinator.

GEPROP. Ministry : CITMA Tel : (537) 2029076 Fax : (537) 2029076 E-mail : oscar@geprop.cu Wind Executive contact: Lic. Raul Novo Mesegué Position : EcoSol Solar, Copextel Ministry : MIC Address : Calle 29 No. 2610 entre 26 y 30, Municipio Playa, Ciudad Habana Tel : (53)7-2046000 ext 121 E-mail : leiva@solar.copextel.com.cu novo@solar.copextel.com.cu Ethanol-Fuelled Technology Executive Contact : José M. Villarroel Catro.

Position : Senior Researcher and Electrical Engineer.

Ministry : Centre for Transport Research and Development, Ministry of Transportation.

Address: Carretera del Asilo s/n, Finca Tiscornia, Casablanca, Regla, C. Habana Tel: 623051/58 extension 238/213 Fax: 338250 Email: diagnostico@iitransp.transnet.cu Sugar Cane Biomass Executive Contact : Paulino López Ministry : MINAZ Tel : (537) 832 41 74 E-mail : paulino@ocentral.minaz.cu Hydro Executive Contact : Eng. Mario León Miguez Position : Hydroelectric Unit

Ministry : National Institute of Hydraulic Resources (INRH) Address: Calle Humboldt 106 c/. Infanta y P Vedado, Ciudad de la Habana E-mail : mario@hidroe.co.cuAddress : Tel : (537) 832 41 74 E-mail : paulino@ocentral.minaz.cu

Photovoltaic Executive Contact: Ing. Carlos Iván Cabrera Position : Fabrica de Componentes Pinar del Río Ministry: MIC Tel : (53) 082 766197 (53) 081 764012 ext 14

Biogas Executive Contact: Odalys García Fonseca Provincial Administration Council: Provincial Direction of Community Services Address : Calle 30 No 2110 entre 21 y 23. Playa Ciudad Habana Tel : (537) 202 34 82 y/o 202 64 28 E-mail : Odalys@sc.ch.gov.cu Solar Thermal Guillermo Leiva Viamonte Ecosol Solar - Copextel Adress: Calle 29 nº 2610, esq. 30 Miramar, Playa. La Habana – Cuba Tel : (537) 204 6000 E-mail : leiva@solar.copextel.com.cu Methane-Fuelled Vehicle Fleet Executive Contact: Juan José Alea Ministry : MITRANS / Group IT Address : La Habana Tel : (537)863 25 41 E-mail :alea@iitransp.transnet.cu

CDM Diana R. Hernández Socorro Address Calle 20 No 4112 e/41 y 47, Playa La Habana - CUBA Tel: 53-7 2061507 E-mail: socorro@geprop.cu

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D 8.5

- St. Lucia

Annex 2 (ICAEN)

TECNOLOGIAS LIMPIAS EUROPEAS PARA LA PRODUCCIÓN Y CONSUMO DE ENERGÍA: POSIBLES APLICACIONES EN LA REGIÓN CARIBEÑA Actualmente, la Unión Europea es uno de los principales centros mundiales de investigación y desarrollo en materia de energías renovables y de uso eficiente de la energía, así como uno de los impulsores más importantes de políticas y programas dirigidos a fomentar su introducción en el sistema energético. Ello ha permitido a lo largo de los últimos 10 años desarrollar una industria europea líder a nivel mundial en estos ámbitos y con una capacidad creciente para aumentar la presencia de estas nuevas tecnologías en el mercado energético internacional.

Producción de electricidad a partir de energías renovables Las tecnologías de energías renovables presentan dos aplicaciones diferenciadas: la electrificación descentralizada y la conexión a red, basada, principalmente, en la tecnología solar fotovoltaica, la eólica y la minihidráulica.

Actualmente, más de dos mil millones de personas no disponen de electricidad, con las consecuencias negativas que esto conlleva en su calidad de vida y sus condiciones económicas, especialmente en las áreas urbanas periféricas y en las zonas rurales aisladas.

Las tecnologías de energías renovables resultan muy adecuadas para mejorar las condiciones de vida en países con tasa de electrificación baja.

Electrificación autónoma Aunque para producir electricidad a partir de las energías renovables en zonas sin red eléctrica pueden utilizarse recursos de tipo hidráulico o eólico, la más

1

generalizada es la tecnología solar fotovoltaica. El mercado fotovoltaico mundial presenta un crecimiento constante y sostenido situado alrededor del 33% anual desde 1996. Las previsiones señalan un crecimiento del 27% hasta el año 2010 y del 34% durante la siguiente década. La industria fotovoltaica europea, representa actualmente el 26% del mercado mundial, aunque gracias a las políticas de apoyo al mercado interno en distintos países, se espera que alcance una posición de liderazgo mundial hacia 2020, cuando el coste de los módulos fotovoltaicos se sitúe alrededor de 1 US$ por Wp (fuente: EPIA).

La electrificación descentralizada mediante paneles fotovoltaicos permite introducir el concepto de integración a diferentes niveles. Por un lado, puede diseñarse la instalación de forma que aproveche diferentes recursos energéticos y los combine en el mismo equipo llamado híbrido. Por otro, puede integrarse la electrificación con otros servicios compartiendo obra civil (red de agua potable, aguas residuales...) y puede integrar aplicaciones en diferentes sectores como el social (escuelas, centros de salud, comunicaciones...), el productivo (bombeo de agua, maquinaria por talleres...) y el residencial (iluminación, electrodomésticos, etc.).

Central híbrida solar-diesel en Isla Floreana (Galápagos, Ecuador) que alimenta una minired eléctrica integrada en otros servicios (agua potable y aguas residuales). A la derecha, vista del proceso de construcción del edificio multiusos.

Instalación de paneles solares fotovoltaicos en la Casa del Pueblo, Tarawa, construida dentro del marco del programa de electrificación rural en Kiribati que contempla la instalación de 1.800 sistemas fotovoltaicos.

2

Alrededor de los paneles fotovoltaicos, se ha desarrollado toda una industria de componentes electrónicos como los reguladores, convertidores, sistemas de adquisición de datos, dispensadores de energía, electrodomésticos de alta eficiencia, etc. A la izquierda, dispensador /contador de energía para instalaciones solares fotovoltaicas (Fuente: TTA). A la derecha, equipo integrado de control de instalaciones de generación híbrida de energía eléctrica (Fuente: Ecotècnia).

Energías renovables conectadas a red Aparte de su uso descentralizado, las energías renovables pueden aprovecharse para generar electricidad en centrales de producción de potencias cada vez más elevadas. La posibilidad de desarrollar tecnologías en producción centralizada depende muy directamente del marco legal de cada país, especialmente de las facilidades para conectar este tipo de instalaciones a la red y de las garantías para que los inversores puedan comprar la energía producida a un precio atractivo durante el período de amortización de los proyectos. El potencia eólica instalada en el mundo, por ejemplo, pasó de los 2.500 MW en 1992 a 40.000 MW en 2003. Casi tres cuatras partes de esta capacidad ha sido instalada en Europa, donde existen marcos legales favorables en la mayor parte de los países europeos.

Los aerogeneradores conectados a la red son actualmente la solución más económica para producir electricidad a gran escala con energías renovables. El coste de producción del kWh generado con energía eólica es una quinta parte del que era hace veinte años. La imagen muestra la instalación de una torre de medición del viento en Loja, Ecuador.

Los sistemas fotovoltaicos conectados a la red pueden aplicarse a grandes centrales fotovoltaicas o bien a pequeñas instalaciones dispersas integrando los módulos en los edificios. EPIA prevé que para 2020, unos 35 millones de europeos dispongan de sistemas fotovoltaicos conectados a la red.

3

El aprovechamiento energético de los recursos hidráulicos con turbinas de pequeña y media potencia es una tecnología suficientemente conocida que tiene instalaciones en todos los países con recursos disponibles. Además de construir instalaciones nuevas, pueden rehabilitarse antiguas centrales minihidráulicas. En Europa se prevé rehabilitar 13.000 minicentrales existentes durantes los próximos años.

Uso racional de la energía La eficiencia energética en los sectores productivos es uno de los mercados más interesantes en países en desarrollo. En general, en estos países, el potencial de mejora de la eficiencia energética es muy elevado y, cuando se han aplicado políticas de reestructuración y actualización de las tarifas energéticas, las inversiones en nuevas tecnologías energéticas eficientes suelen presentar una rentabilidad muy atractiva.

El ámbito de la eficiencia energética engloba un gran número de tecnologías, algunas de las cuales, como la cogeneración, la energía solar térmica o el sistema de gestión energética tienen una aplicación general en un gran número de sectores. Otras tecnologías para mejorar la eficiencia energética tienen una aplicación más restringida en sectores determinados y, de forma general, pueden clasificarse en dos grandes grupos: Tecnologías de uso eficiente de la energía eléctrica y tecnologías de uso eficiente de los combustibles.

En proyectos de eficiencia energética llevados a cabo en países en desarrollo puede ser interesante estudiar la aplicación de Mecanismos de Desarrollo Limpio con el fin de obtener créditos de carbono. El comercio de emisiones de CO2 a través de estos mecanismos puede contribuir a mejorar la rentabilidad de los proyectos.

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Uso eficiente de la energía eléctrica En la industria y en el sector servicios, la energía eléctrica puede llegar a ser un factor de coste importante que puede reducirse aplicando nuevas tecnologías avanzadas de ahorro y de eficiencia energética. Existe un gran número de mejoras que pueden implantarse tanto en la red eléctrica interna como en los equipos de consumo (véase cuadro 1) que pueden contribuir a disminuir mucho la factura eléctrica del usuario.

Los sistemas avanzados de diagnóstico, como la Optimización de la explotación de la red termografía infrarroja, permiten detectar de alumbrado público en Gualeguaychú, equipos eléctricos que presentan disfunciones y Argentina. pérdidas eléctricas excesivas (Fuente: Siemsa).

Cuadro 1. Tecnologías de racionalización del consumo eléctrico. o o o o o o o o o o o o o o o o o o o o

Medir y reducir las puntas de consumo eléctrico.

Racionalizar las líneas de distribución.

Corregir el factor de potencia.

Optimizar instalaciones de alumbrado público, industrial y comercial.

Motores eléctricos de alta eficiencia.

Leds de última generación para el alumbrado.

Balastos electrónicos con control de flujo lumínico.

Control por sensores de presencia, células fotoeléctricas, etc.

Filtrado de harmónicos.

Control de la demanda máxima.

Variadores de frecuencia para motores eléctricos.

Hornos de inducción.

Concentración por membranas.

Membranas de baja presión en osmosis inversa.

Unidades de fusión rápida.

Secado por microondas.

Generación de aire comprimido con compresores de velocidad variable de alta eficiencia.

Condensadores evaporativos en sistemas frigoríficos.

Free-cooling industrial.

Bombas de calor eléctricas.

Uso eficiente de los combustibles Los equipos que consumen combustibles (calderas, hornos,...) son susceptibles de incorporar mejoras que permitan optimizar su rendimiento.

Además, en procesos de calentamiento o de refrigeración (frío por absorción), 5

los combustibles pueden sustituir determinados usos eléctricos de forma ventajosa.

Cuadro 2. Tecnologías de racionalización del consumo térmico. o o o o o o o o o o

Optimización de combustión en equipos térmicos.

Cambio a procesos por combustión directa.

Calderas de condensación.

Recuperación de calor de los gases de combustión, hornos, secadores, etc.

Quemadores de alta eficiencia.

Frío por absorción.

Recuperación del calor de los condensadores en sistemas de refrigeración.

Calentamiento de baños con quemadores sumergidos.

Sistemas de calefacción y secado por infrarrojos, baja temperatura, etc.

Bombas de calor a gas.

Los equipos de medición de combustibles facilitan el control de los consumos en instalaciones térmicas industriales o del sector servicios (Fuente: Siemsa).

Cogeneración La cogeneración es una tecnología que permite conseguir el mejor aprovechamiento energético del combustible para producir electricidad y calor. A pesar de que, para fomentar la cogeneración en un país concreto, es interesante que exista un marco legal favorable que regule la venta y la conexión a la red, en algunos mercados con un elevado diferencial entre el precio de combustibles y la electricidad, las instalaciones de cogeneración pueden suponer un atractivo para los inversores locales, especialmente los de tipo industrial.

En la Unión Europea, las centrales de cogeneración generan el 10% de la energía eléctrica consumida, evitando la emisión de unos 200 millones de toneladas de CO2 y reduciendo la dependencia energètica en unos 29 millones de Tep por año, que equivalen a la demanda de energía primaria de Austria.

En Europa se concentran las empresa punteras a nivel mundial en el desarrollo de centrales de cogeneración, así como la investigación en nuevas tecnologías asociadas a este ámbito (micro-turbinas, pilas de combustible, motores Stirling, gasificación, etc.) y larga experiencia en el diseño, montaje y explotcación de centrales de cogeneración.

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Equipo de cogeneración en el Hospital de Bariloche (Argentina), instalado en 1995, formado por un motor alternativo de 100 kW con recuperación térmica para producir calefacción y agua caliente sanitaria.

Producción solar de agua caliente Durante diversas décadas, se ha utilizado la energía solar térmica en una gran diversidad de aplicaciones. De lejos, la aplicación que se ha utilizado más y también la más madura es la energía solar térmica para calentar agua que permite, en la mayoría de sectores que se aplica, ahorrar entre un 60 y 80% de la energía convencional utilizada. De ahí que, el uso de esta tecnología resulte una buena estrategia para reducir la demanda y, en consecuencia, del uso racional de la energía. Existen otras aplicaciones como la calefacción, el secado, el calor industrial, el enfriamiento solar, la desalinización y la producción de electricidad en centrales solares térmicas. De todo este grupo de otras aplicaciones, el refrigeración solar y la desalización sonlas que presentan un mayor potencial de desarrollo a medio plazo, junto con las tecnologías de telecontrol que permiren incrementar la productividad de las instalaciones.

Europa, con 1,5 millones de m2 instalados, dispone actualmente de la tecnología más avanzada a nivel mundial, aunque es China (5,5 millones de m2) el mayor mercado actual de estos sistemas.

La tecnología solar térmica, incorporando sistemas de supervisión con telecontrol, permite garantizar la producción solar y el mantenimiento de la instalación, entre otros parámetros.

En la imagen, instalación solar con telecontrol del Hotel Fleur d’Epée en Guadalupe (Fuente Enersoft).

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Equipos de gestión y control de la energía Los equipos de gestión de las instalaciones de distribución de energía y de los equipos de consumo final pueden comportar importantes reducciones en la factura energética y, también, en los costes de mantenimiento. El mercado ofrece herramientas informáticas capaces de realizar desde un esmerado seguimiento de la demanda en los diferentes puntos de consumo, hasta gestionar la puesta en marcha y paro de los equipos, según un programa horario, diario o semanal que permita optimizar su funcionamiento.

Los sistemas de telecontrol y monitorización a distancia permiten reducir de forma importante la factura eléctrica de las empresas (Fuente: Grupo Sapemi).

Ciudad sostenible La población urbana crece de forma muy importante en todo el mundo, incrementando la presión sobre todo tipo de recursos (energía, agua, movilidad, territorio y materiales de rechazo). Por tanto, se impone una racionalización de la gestión de dichos recursos para avanzar hacia un desarrollo urbano que contemple una planificación adecuada y la adopción de medidas para mejorar la calidad del entorno urbano y de la vida de los ciudadanos.

Energía

Residuo

Ciudad Agua

Movilidad

Ocupación del territorio

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Transporte y movilidad sostenibles El transporte es el sector que absorbe la mayor parte de la demanda de energía en la mayoría de países. Además, presenta una dependencia casi absoluta (superior al 98%) de los combustibles derivados del petróleo. Por tanto, las actuaciones y las tecnologías de mejora de la movilidad, especialmente en áreas urbanas, tienen una incidencia directa en la optimización del consumo de energía, aparte de otras repercusiones favorables tanto en el campo de la seguridad viaria, como en el de la calidad del aire.

Cuadro 3. Tecnologías de transporte y movilidad.

o o

o

Centros de regulación semafórica y semáforos con Leds.

Aplicaciones fotovoltaicas: Expendedoras para aparcamientos, paneles de información a los usuarios (tiempo de recorrido, tiempo de espera, itinerario aconsejado, disponibilidad de aparcamiento), señalización de seguridad con Leds o convencional, alumbrado público.

Vehículos "limpios" para flotas municipales o privadas.

El ICAEN ha realizado el Proyecto de Actualización del Plan Director de Transportes en la ciudad de Túnez.

Edificación sostenible En el ámbito de la edificación, existe una amplia gama de tecnologías que permiten hacer un uso más eficiente de la energía y del agua, siguiendo criterios constructivos. En el diseño arquitectónico, pueden aplicarse soluciones de arquitectura solar pasiva, eligiendo materiales de bajo consumo energético, introducir tecnologías constructivas que combinen el uso de materiales locales apropiados o utilizar sistemas integrados para aprovechar la energía solar térmica o fotovoltaica, almacenar agua de lluvia y tratar las aguas residuales.

Proyecto de construcción de 53 viviendas bajo criterios bioclimáticos y de electrificación basada en energías renovables en la localidad de Polanco, Uruguay (1995).

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Otros ámbitos tecnológicos Además de las áreas que se han descrito, existen otros ámbitos tecnológicos en los que la Unión Europea ha desarrollado avances importantes. El tratamiento de los residuos, aprovechamiento energético de la biomasa o el de la geotermia, por ejemplo, pueden ser, en determinadas regiones del planeta, la única fuente de obtención de electricidad.

Gestión y tratamiento de residuos Los residuos sólidos urbanos (RSU) son otro campo de actuación interesante para los municipios. Un buen esquema de recogida y separación, junto con las nuevas tecnologías de tratamiento y deposición final, puede reducir de forma importante el impacto ambiental asociado a este ámbito. Además, mediante determinados tratamientos, los RSU pueden constituir un recurso energético aprovechable que permite reducir los costes del proceso de gestión.

Campaña de recogida selectiva de residuos en Santa Cruz, Galápagos, Ecuador.

Aprovechamiento de la biomasa La biomasa, procedente de los bosques o de explotaciones agrícolas o ganaderas, es el recurso energético más ampliamente utilizado en los países en desarrollo. En este campo, la tecnología disponible se centra en la combustión eficiente para usos térmicos domésticos (cocción, calefacción, agua caliente...) o industriales (vapor, agua sobrecalentada, cogeneración...).

También puede tenerse en cuenta la aplicación de tecnologías avanzadas para producir, a partir de la biomasa, combustibles líquidos como el biodiesel o el bioetanol, o bien gaseosos, a través de procesos de metanización, gasificación o pirólisis.

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Estudio de viabilidad para la metanización del lirio de agua en Manabí, Ecuador, 2002.

Aprovechamiento de los recursos geotérmicos En determinadas zonas del planeta, se puede disponer de recursos geotérmicos que pueden aprovecharse para producir calor destinado a usos residenciales o productivos o energía eléctrica (en el caso de disponer de energía de alta entalpía).

Centro termal en Capilla del Monte en la República Argentina, 1999. Uso termal y calefacción del agua a 48º C (Fuente: Samalús Consultants).

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