A public consultation into the proposed implementation of a permanent Renewable Energy Rider for the Barbados Light & Power Company was advised that funding was available in the island to finance alternative energy projects.
Investment Director of Fortress Fund Management Limited, Roger Cave, was one of eight presenters making submissions to the final public session on the BL&P’s proposal at the Lloyd Erskine Sandiford Centre.
However, Cave suggested that while renewable energy was a good investment opportunity, it was not secure.
“What is the framework that would result in widespread adoption of renewable energy by individuals, by businesses, by Government. I think the simple comment is it needs significant commitment of capital,” the investor advised.
“I speak here as an investor and a lender. We run a number of mutual funds, we invest in equities, we invest in bonds, we have a real estate fund which has a number of commercial properties and we have started the process on tendering for the installation of renewable systems on several of those properties through a number of the providers through our bond fund.
“For adoption of renewable energy, we are going to need capital, whether it equity capital, or debt capital. One of the great advantages we have in Barbados is we have significant levels of capital in our banking system. Somewhere in the region of $7 billion to $8 billion,” Cave reported.
“So, the money is here and certainly the opportunity to finance these projects is certainly there,” assured the investment manager.
He argued too, that many of these ventures were over the long term and could generate significant returns. Cave noted though, that providers of capital seek certainty, clarity on the timing, higher returns, methods of payment and frequency on those payments.
“We seek horizons. When are we going to get those payments, over what time period? We want to have confidence in the counter party,” Cave said.
“One of the things that lenders and investors look for is hard security. The simple rule is that uncertain increases costs and one of the disadvantages with renewable energy projects, is there is really no security. It is basically unsecured lending and the opportunity to go and pick up one of these second hand systems from off a roof and sell it on the market. I am not sure a lender would be able to get back a lot of money,” lamented Cave.
He therefore recommended greater flexibility on the system capacity of 150 kilo watts, examining other models such as that in Ontario, Canada, where prices provided reasonable rates of return over 20 to 40 years. The lender also proposed that the Light & Power’s rates need to be set, rather than being uncertain.
Another submission came from attorney at law, Aidan Rogers, who asked the FTC to reject several of the power firm’s recommendations, especially in light of the “scarcity of information provided”.
Head of Williams Industries, Ralph “Bizzy” Williams argued that the 150 kilo watts limit on the installation of renewable energy systems made no sense, when for example, his company could supply 7,000 kilo watt hour of energy from the sun. † Williams said his firm now had 1.4 mega watts of photo voltaic capacity installed, but had been limited to 150 kilo watts. The leading entrepreneur reasoned that the sun was being wasted with limitations being placed on people who could provide greater energy capacity.
He said he also believed Barbados could be converted into an electric vehicle island over time through the use of PV panels. He argued that the technology existed now in Barbados.
Other contributions were made by the Acting President of the Barbados Renewable Energy Association, Greg Merrick, Managing Director of CARITEL, Hallam Hope, David Staples, a director of Williams Industries, Director of Solar Works, Rodney England and Richard Bosher of Blue Print Renewables. (EJ)