A leader in the renewable energy industry here has described as a strategic move oil executive Sir Kyffin Simpson’s decision to sell three-quarters of the operations of his SOL Group.
With Barbados and the rest of the region ramping up efforts to move away from the use of fossil fuel to more renewable energy dependency, Vice President of the Barbados Renewable Energy Association (BREA) Aidan Rogers said he was not surprised at the move by the region’s largest dealer in petroleum products.
SOL, which once came close to purchasing state-owned oil importer the Barbados National Terminal Company Limited (BNTCL), announced Wednesday that it would initially give up 75 per cent of its operation in a deal with Canadian fuel petroleum products marketer Parkland Fuel Corporation, valued at 2.4 billion.
In a joint statement, officials said “the SOL brands will remain in place, and the SOL business will retain key management and continue to be managed form the Caribbean”.
They said the deal created an opportunity for Parkland to roll out its private level, loyalty programme and enhanced food offer, while providing that company with increased exposure to stable earnings across multiple lines of business and an opportunity to expand into other markets in the Americas.
But Rogers told Barbados TODAY he believed SOL had made a strategic deal and reduced its likelihood of risks associated with declining market share.
With the plan for Barbados and the rest of the region to expand the renewable energy landscape and reduce their reliance on fossil fuel, the fuel supply market would have to adjust its business model in the coming years especially within the next decade, he said.
“As recent as 2016, the previous Government would have had a roadmap prepared by the International Renewable Energy Agency that had indicated that by 2030 the country would be using close to 65 per cent less fossil fuel in its daily operations. This is a presentation made to the national task force on energy of which both SOL and RUBIS were represented there for that presentation,” said Rogers.
“The move with SOL really entering into a deal is somewhat strategic. It increases its share [and] it spreads some of the risks, as it is now part of a bigger entity. But we see it as also being cognizant of the fact that this market will go through fundamental changes over the next decade. Not only Barbados, but every regional country is now looking to accelerate its renewable energy deployment and as we know SOL was the major play throughout the region,” he explained.
Stressing that the plan to rely less on fossil fuel was consistent throughout the Caribbean Community (CARICOM), Rogers told Barbados TODAY that once countries were serious about achieving the goals they have set, it was easy to see the long-term viability of the fossil fuel infrastructure coming under increasing threat.
“It doesn’t mean that fossil fuel will fully go away but it means that things will get darker rather than lighter in terms of the fossil fuel business model,” Rogers explained.
Under the Stuart administration, Barbados had set a target of generating 65 per cent of its power from renewable energy sources by 2030, and a 22 per cent reduction in electricity consumption by 2019.
But under its revised National Energy Policy 2017 – 2037, Barbados had set a target of 100 per cent renewable energy usage by 2030.
The target, officials say, would be achieved by increasing the island’s reliance on alternative energy especially in the areas of electricity generation and transport.
A 100 per cent renewable energy policy would see Barbados moving from its current 944 Gigawatt/ hours (GWh) per year usage to between 2,000 and 2,400 GWh/year.
Data showed that between 2006 and 2015, Barbados was importing an estimated 11,654 barrels of oil per day to meet its needs.
At the same time, there has been an increase in the number of solar photovoltaic electricity panels on buildings and a slower take up of electric vehicles.
Already, Minister of Energy and Water Resources Wilfred Abrahams has indicated that Government was seriously considering more energy-efficient options to replace the fleet of Transport Board buses and Sanitation Services Authority garbage trucks.
And with the removal of the road tax and implementation of a tax on fuel at the pumps, some officials have predicted that more companies and individuals will turn to electric vehicles.
Only a week ago, leading telecommunications provider Flow announced that it would be using electricity to power several vehicles in its fleet in a move aimed at improving operational efficiencies while reducing its carbon footprint.