New structure for electricity generation and supply coming
Minister of Energy, Small Business and Entrepreneurship, Kerrie Symmonds, says further efforts are being made to open the electricity market for competition.
He said in doing so, this would allow for investment to be made in the sector. His comments came in the House of Assembly yesterday afternoon as he said that in April, Government concluded negotiations with the Barbados Light and Power Company Limited (BL&P), which will see five licenses being made available to local investors who want to be a part of the new market structure for electricity generation and supply in this country. His comments came as he piloted the debate on the Control of Inefficient Lighting Bill, which is to ban the importation and sale of incandescent light bulbs in this country.
“And so we have negotiated, and in April of this year, the Light and Power indicated satisfaction by way of letter with the negotiation, and we now will go through the formalities of the public discussion and public signing of the new arrangements,” he stated.
Symmonds said that for administrative purposes, the five licenses will be treated as three licenses – power generation and energy storage; transmission, distribution and sales; and the third being dispatch. As he spoke in more detail about the licenses, he said in terms of power generation, the focus will be on renewable energy including the use of photovoltaics and wind energy.
“The contemplation is that we will have wind both onshore and offshore. There is about 4,000 times more space offshore Barbados than we have onshore and therefore Sir, we plan to have more fixed wind farms firms and floating wind farms off the coast of this country, set up in such a way that it does not humbug the vista or the horizon for those who are overly interested in the tourism side of things. But Mr. Speaker, Sir, done in such a way that it may actually be a tasteful additive to the tourism product, because there are parts of the world where people visit these wind farms by sea,” he said.
Appropriate tariff to be set
In terms of the energy storage license, noting that renewable energy technologies are largely intermittent, he said it is important to have a way to capture the power that is generated, which is then sold to the grid. Minister Symmonds went on to say that the Fair Trading Commission is working on setting the appropriate tariff for energy storage.
“We are cognisant of the fact that what we do not want is energy arbitrage, where people will just simply generate storage with a view to selling at the time when the highest price is available. That’s not what we are interested in, and that’s what we have to guard against, because there are those people who would seek to humbug a whole country in order to profiteer personally and privately, and that cannot be allowed. Equally Mr. Speaker, Sir, there’s a transmission and distribution and sales license, which has been negotiated,” he said.
Symmonds added that the establishment of the new market structure will be characterised by maximum participation of local entrepreneurs and international partners and it will be done through power purchase agreements between independent power producers (IPP) and the utility company.
“You will have the independent power producer being competitive in the production of the generation and storage of electricity, that is area every and anybody can get in and compete, and then there will be the grid network side, where you will have transmission and you will have distribution and that will be done by the utility, the utility purchasing that power that you provide. And so therefore, we have moved from a monopoly as the economist would say, to a monopsony where you have a single purchaser,” he said.
The energy minister also indicated that the BL&P will be assigned the role of reliability backstop, especially in relation to the transmission and distribution and sales license. He explained that this would ensure that where an IPP cannot supply the expected capacity to the grid, they would report it to the utility, and arrangements would be made for other IPPs to fill the gap and provide the country with the energy security and reliability that is required. (JRT)