Combining Demand-Side and Supply-Side Management to Reduce Dependence on Fossil Fuels in the Caribbean

Pursuant to the recent impacts of hurricane Irma in the Caribbean, the vulnerability of small island developing states to climate change is particularly topical. Hence, resilience to climate change is a true concern especially given that countries in the Caribbean greatly depend on fossil fuel imports, which leads to high vulnerability to fluctuating oil prices. In this context, Econoler elaborated a climate change adaptation strategy and a sustainable energy strategy for the Caribbean Electric Utility Services Corporation (CARILEC) with financing from the Inter-American Development Bank (IBD).

Row of colorful houses in central Granada, Nicaragua.

The recent devastation caused by hurricanes in the Caibbean reveals the urgent need to help these small island developing states become more resilient to climate change.

 

Recently conducted reviews confirmed that the utilities of target countries must diversify their procurement operations to avoid the risks associated with future fossil fuel price increases. This project served to develop a demand-side management plan, identify investment opportunities and establish a deployment strategy for technologies such as smart grid networks, digital technologies that enable bidirectional communications between utilities and clients and more efficient management of the electric network by adjusting electricity flow in real time.

These reviews also underscored the need to foster efficiency on the demand side to improve the reliability of electric network. Demand-side management allows utilities to reduce significant load fluctuations on power lines, which represents the most feasible alternative for the studied utilities. DSM enables the latter to both limit increases in energy demand and eliminate or postpone for many years the need for new infrastructure investments. This solution not only permits utilities to reduce total energy consumption by ten to 23.4 percent in certain countries, but also offers numerous financial benefits.

Combining demand and supply-side management is an advantageous strategy to achieve best results in climate change mitigation and adaptation in the studied countries.

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