FIT rates set

Existing and potential providers supplying the national grid with energy from renewable sources now have a firm guarantee for their investment.

At the same time, with new rates and increased maximum capacity to the grid, the country is expected to save some $53 million over the next decade, while the Barbados Light & Power’s (BL&P) customers should not witness any increase in electricity rates.

These assurances have come from the Fair Trading Commission (FTC), who today issued its decision on the feed-in-tariff (FIT) for renewable energy technologies up to and including one megawatt (MW), which will replace the unsatisfactory Renewable Energy Rider (RER) programme, introduced in 2010.

Existing RER customers will maintain their existing arrangement with the utility company for 20 years, with their system’s original date as the start date as they are grandfathered into the new programme.

Those existing terms include renewable energy rider rates of $0.416/kWh for solar photovoltaic, and $0.315/kWh for wind.

The current maximum of renewable energy from individuals and businesses to the grid is 24 megawatts (MW), and another 10 MW from the utility company.

However, delivering the decision on the new FIT at the FTC’s Green Hill, St Michael office on Tuesday, Chairperson Tammy Bryan said the first round of the FIT programme will run from October 1, to December 31, 2021 or until the new limit of 32.7 MW has been used, which ever comes first.

Individuals or commercial entities that sign up for the FIT programme will be able to provide energy from solar, land-based wind and biogas or anaerobic digestion, and solid biomass.

The new FIT rate for solar systems up to 10 kilowatts (kW) is 42.75 cents/kWh; solar systems above 10kW to 100kW is 44.75 cents; solar systems above 100kW to 250kW is 41.75 cents; solar systems above 250kW to 500kW 38.25 cents; while solar systems over 500kW to 1 megawatt is 36.25 cents.

The new FIT rate for wind up to 10kW is 39.75 cents; wind above 10kW up to 1 megawatt is 38.25 cents; biogas systems up to 1 MW is 44.25 cents; and solid biomass up to 1MW is 52.25 cents.

Prior to expiry, the FTC will conduct a review and thereafter the rates will be reviewed on an annual basis, with new rates announced before the end of each period.

The maximum allocated capacity for renewable energy to the grid may also be amended.

“This represents a major step for the renewable energy sector in Barbados as this rate will, we believe, guarantees investors a stable rate of return for 20 years,” said Bryan.

Licences will be granted on a first-come, first-serve basis and after licences are issued individuals will have a maximum of 12 months to complete solar and wind projects, and 36 months to complete anaerobic digestion and biomass projects.

“Extensions may be granted in some circumstances. However, if these deadlines are not met the licences will be revoked,” said Bryan.

The decision also makes provision for community-shared renewable energy projects, but there must be at least 15 residential customer investors with no entity or individual owning more than 50 per cent of the project.

These community-shared projects will benefit from “more favourable rates, at least 10 per cent more than the regular rate,” said Bryan.

During the allotted 30-minute media briefing on Tuesday, Director of Utility Regulation Dr Marsha Atherley-Ikechi said the FIT will allow a reasonable rate of return to investors, and that it was in keeping with the national energy policy.

She gave the assurance that a rigorous process was followed during the research period, adding that stakeholders were consulted and the utility company was informed of the decision on Monday.

She said based on empirical evidence, the FTC “did not expect any significant increase” in electricity costs up to 2030.

In fact, she said: “On average we should see a reduction, in that the average cost of FIT should be 30.61 cents and the fuel clause 31.1 cents”.

“We anticipate an overall saving in nominal terms of $53.3 million [for the country] over the period, and that is based on information we have to hand at this time,” Atherley-Ikechi said.

“We have a situation where we spend between $500 million to $600 million annually on imported fossil fuel, that is not very tenable for a small economy like ours. We understand the predicament we are in and this is one way we can use to offset that challenge,” she said.