Policy objectives of the National Energy policy for Curaçao
The government of Curaçao has established a series of policy objectives as part of the National Energy Policy for Curaçao which includes the focal points and priorities for developing Curaçao’s energy sector into a sustainable, efficient and transparent energy system.
The Energy Policy for Curaçao consists of the following 6 policy objectives which form the foundation for the areas of attention with regard to market regulation:
- Reliability: A well-functioning and available transport sector, electricity and water infrastructures.
- Security (and adequacy) of supply: The continuous availability of sufficient fuels (including adequate reserves), electricity and water at all times by making more use of indigenous resources. The goal is to make use of at least 50% of indigenous resources by 2035.
- Quality of supply: Compatibility of electricity provided by the energy system with the load that is plugged into it.
- Conservation: Conservation of energy and water that will contribute to the cost decrease of the energy supply and lower emissions.
- Sustainability: Economic and social development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs. The energy policy adheres to the international Sustainable Development Goals for sustainable cities and communities (SDG11), responsible consumption and production (SDG 12), climate actions (SDG13) and local and international emissions standards for industry and mobility.
- Affordability: Energy that is affordable for citizens and companies on Curaçao.
Spheres of activity and market players
Within the Energy sector the provision of electricity, water and fuel are counted among the tasks of supervision and regulation, assigned to BT&P, by the government of Curaçao. The supervision and regulation are related to the production and distribution of electricity, water, fuel products Mogas95 (gasoline), Low Sulphur Diesel (LSD), Liquefied Petroleum Gas (LPG), Gasoil (HSD), Diesel (MDF), Marine Fuel oil (MFO) and Bitumen.
The regulation of the sectors which are subject to the Energy market, is by design almost identical in many aspects, because of the similarity in a heavy duty infrastructure and the distribution network. These sectors have in common that they all have a technical network, which facilitates the supply to the end-user.
BT&P focuses its supervisory and regulatory authority on the main producers and suppliers of electricity and water and fuel products, being: Aqualectra and Curoil N.V. Its pertinent task in this respect is to cause these parties to operate and function as efficiently and transparently as possible in the interest of the consumers. With this objective in mind it supports the government in developing policy and supervisory frameworks, regarding electricity, water and fuels and in addition it is entrusted with the implementation of these frameworks pursuant to instruction from the government.
Areas for attention of market regulation
The areas for attention of BT&P at the regulation of the energy market, are to be distinguished as follows:
- Price regulation
The present markets on Curaçao are highly monopolistic, as a consequence of which there is relatively little pressure on the prices. BT&P has an advisory function to the government regarding adjustment of the prices, based on the existent guidelines or regarding tariff proposals submitted by market parties. In this respect the main principles applied are cost-orientation, non-discrimination, objectivity and transparency in order to prevent abuse of market power.
- The development of policy and regulation frameworks
The factors which control the determination of policy- and regulation frameworks are the market structure, the concessions, the procedure for allocating a concession, -prescriptions and -restrictions, the terms of delivery between the concession-holder and the client, the applicable tariff for the provision, the economic and technical quality of the provision, the organizational and regulatory function and the extent to which the policy is suitable for implementation.
- Application of economic and technical quality regulation
The quality of the energy provisioning is tested by applying technical, as well as economic criteria. For electricity the technical criteria, among other things, include the mains voltage of current, the frequency, the strength of the network and the speed with which faults and disruptions in the service are solved.
The economic criteria include, among other things, the terms of delivery, the conditions of the concession, the speed with which connections are completed, the procedures at disconnections of users and the processing of complaints.
- Granting a concession
The energy policy results in the allocation of a concession to the providers in the market. Currently this is only applicable in the field of electricity provision (Aqualectra N.V.). The concession contains the conditions with respect to safeguarding and execution of the electricity provisioning to which the concession holder has to comply. By means of the concession, various other aspects can be substantiated which are relevant for the specific provision for which the concession is granted, for example the tariffs.