EDITORIAL - Investing in renewable energy

ONE of the things we are eagerly awaiting is the new investments expected to come on stream in the local Renewable Energy sector, which has the potential to contribute to economic growth in Barbados.

 

Last July the Fair Trading Commission (FTC) issued its decision on the motion to review the Renewable Energy Rider (RER), a scheme which according to the FTC, facilitates the sale of surplus electricity generated by customers of the Barbados Light and Power Company Limited (BL&P), to the BL&P. 

 

From the initial reaction to the FTC’s decision, it appears that the way has now been cleared for new investments to take place.

 

The Barbados Light and Power Company, the Barbados Renewable Energy Association and several other stakeholders agreed they had no major problems with the FTC’s decision. Indeed, the FTC said it is confident that the cost model used in making the decision is practical, and more importantly, keeping with the general tone of the National Sustainable Energy Framework for Barbados. That policy has as its objective, according to the FTC, reduced energy costs, the promotion of viable investments in sustainable energy, reduction in the dependency on fossil fuels and the use of environmentally-friendly energy sources.

 

The Government of Barbados’ objective for renewable/alternative energy is to have approximately 29 per cent of all electricity consumption in Barbados being produced from renewable energy sources, along with a 22 per cent reduction of overall electricity consumption by the year 2029.  

 

The FTC also did at least three things which would definitely be a fillip to players in the industry.

 

The first is that it increased the eligible capacity limit to 500 kilowatts. That is, the amount which individuals/companies with solar photovoltaics can now generate and sell to the Barbados Light and Power. The FTC anticipates that this new limit will allow for greater participation within the RER programme.

 

Secondly, those with solar photovoltaics selling electricity to the BL&P can do so while charging 41 cents a kilowatt hour; while those using wind can sell at 31 cents a kilowatt hour. Another decision is that in determining the RER credit, the FTC used what it called a Resource Cost Approach, which disaggregates the RE costs from the cost of fossil fuels.

 

The Commission had pointed out that the primary purpose for the review of the RER was to address the concerns of current and prospective RE suppliers and installers, who had advised of the current un-competitiveness and lack of economic viability of the RER credit. This was due to the low value of the RER credit, occasioned by the low oil prices on the international market.

 

The RER is just one component of a broader energy development in Barbados.

 

This country is the recipient of a Bds$20 million loan from the Inter-American Development Bank to establish an Energy Smart Fund to promote renewable energy and energy efficiency in the Barbados private sector.

 

Commerce Minister Donville Inniss is on record indicating that “the Government has done its part by providing the appropriate legislation, fiscal incentives and some measure of financial support along a solid regulatory environment via the Fair Trading Commission. The onus is now on households and businesses to take the baton and to run with it.”