Putra Kusdarman l Palladium - Apr 17 2024
Can a Fleet of Electric Vehicles Decarbonise an Entire Island Nation?

St. Lucia Electricity Services Limited (LUCELEC) is the sole provider of electricity on the small-island nation of Saint Lucia, powering 180,000 inhabitants. But the company’s use of diesel fuel to generate nearly all electricity is unsustainable – both because of the climate impacts and the high cost compared to renewable energy.

LUCELEC knew they had a massive opportunity to do things differently and began by attending Palladium’s Kaplan-Norton Strategy Execution training program.

“They were looking for accessible tools for charting a new strategic direction,” says David McMillan, one of Palladium’s longest-tenured strategy experts and a collaborator of Balanced Scorecard creator Robert S. Kaplan. “LUCELEC needed to develop a 2035 strategic plan that would set them on a sustainable long-term footing and part of the answer came from an entirely different industry – electric vehicles (EVs).

LUCELEC developed a vision that by 2035, the company will be a full-fledged economic development utility and meet 40% of St. Lucia’s energy demand through non-diesel generation (compared to less than 7% today).
Many utilities are in a position of tremendous catalytic potential, explains McMillan. “They provide a necessary service, have nearly 100% market reach in their service area, local potential partners are also customers including governments, and increase in demand for their services is tightly aligned with economic development.”

“This means electric utilities are in a position of influence and power, pun intended, to be leaders in economic development and the just transition through their strategic decisions and the investments that they make.” LUCELEC recognised these realities and developed a strategy where they would drive uncomfortable change within the organisation to step into a broader leadership role in the country’s economic and decarbonisation priorities.

Start with Transportation

Of course, decarbonising an entire island nation doesn’t happen all at once and is not accomplished by targeting just one source of carbon emissions.
LUCELEC and their regulator have control over decarbonising electricity supply, but the transportation sector involves many more decision makers, despite the implications of EVs on electricity demand and decarbonisation. Working with Palladium, they developed a workshop for stakeholders in the transportation ecosystem to discuss decarbonisation of the sector and explore how they could collaborate to make it happen.

“We invited leadership of car dealerships, local bus and taxi associations, banks, rooftop solar installers, and national government ministries to participate. Over the course of two days, we held discussions on the current state of the transportation sector in St. Lucia, opportunities, barriers in bringing electric vehicles (EVs) to the island, consumer appetite for EVs, government regulations, and beyond,” says Roger Joseph, LUCELEC’s Manager for Strategy Development and Implementation.

The expectation of the workshop was not to change the system immediately, but rather to convene all the important actors, gain consensus on outcomes, understand the collaboration points, and garner interest in continuing to work together.

“Many of the car dealership managers are grappling with how few manufacturers are making EVs available in Saint Lucia due to policy and regulatory concerns – like tariff structures and battery recycling plans – as well as nascent charging and repair infrastructure. Addressing these concerns quickly in parallel requires a coordinated ecosystem approach,” adds McMillan.

“This is the kind of approach EV manufacturers need to see in order to give any priority to the St. Lucian market compared to larger markets, like Europe, and Caribbean nations further along the adoption curve, like Barbados.”

The workshop ended with a commitment by LUCELEC to increase the EVs in its fleet from two pilot vehicles to the entire management fleet, an immediate way of turning discourse into action. The momentum has continued over the past year to include work to develop a National Low-Carbon e-Mobility Strategy, implement supportive policy changes, and pass regulatory and tax reforms.

Since, the Department of Sustainable Development within the Government of Saint Lucia has allocated US$6 million in budget through 2027 and organised a standing steering committee and a Technical Working Group on EV Demonstrations and Upscaling e-Mobility with LUCELEC and other ecosystem players.

The Government has also procured 15 new EVs, proving that cost efficiency can be achieved while transitioning to electric. These collective efforts are expected to help in influencing consumers while demonstrating market readiness to vehicle manufacturers and accelerating the business case for additional investment in decarbonising transportation.

LUCELEC’s role as a catalyst has been instrumental to date, demonstrating that efficient, coordinated systems change requires a trusted party that can bring the relevant stakeholders together to envision a better future – and then get to work.

Learn about our Inclusive Growth work and contact info@thepalladiumgroup.com for more.