Providers seeking to supply the national grid with energy from renewable energy sources above 1 megawatt (MW) are now able to do so through the feed-in-tariff (FIT) programme, with a guaranteed return for their investment.
What is more, the Fair Trading Commission (FTC) is projecting further savings in electricity costs as a result of more of the larger renewable energy systems being connected to the national grid.
In a decision issued on Wednesday, the FTC said the determination was made in accordance with the Utilities Regulation Act and with consideration of the objectives outlined in the Barbados National Energy Policy, as well as comments submitted during the May to June 2019 consultation period.
The FIT initiative, which was introduced a year ago, replaced the disappointing Renewable Energy Rider (RER), introduced in 2010.
The new component relating to systems above 1 MW takes effect Thursday, October 1.
FIT contracts obtained under this decision shall apply for 20 years.
A total of 75 MW has been allocated by the Ministry of Energy to this component of the FIT programme and has been subdivided among the PV and wind technologies.
The FTC explained that the FIT rate for solar PV systems of 1MW and up to 5MW will be 23.25 cents/kWh, and has a total capacity of 30 MW.
The rate for land-based wind systems is 22.25 cents/kWh with a capacity of 10 MW.
Meanwhile, the FIT rate for solar PV systems size above 5MW and up to 10MW shall be 21.75 cents/kWh and has a 25MW capacity, while land-based wind systems above 5MW and up to 10 MW is 20.25 cents/kWh, with a capacity of 10MW.
The Barbados Light & Power Company Limited will purchase 100 per cent of the output of each respective RE facility for a period of 20 years from the facility’s commercial operation date.
The FTC said the rates for systems of 1MW and up to 5MW will remain in effect for 18 months, until March 31, 2022, unless there is a “material change in the market” including the exhaustion of the capacity, in which case a review may be taken earlier.
In a video press statement, FTC Chairperson Tammy Bryan said the rates for all new projects over 5MW up to 10MW will remain in effect until March 31, 2021, “or until such time as a competitive procurement framework is established”.
“The level of investment required to achieve the Government’s goal of 100 per cent renewable energy by 2030 and the current economic position of the country, which has unfortunately has been exacerbated by the impact of the COVID-19 pandemic, have created a need for rates to address systems beyond 1 megawatt,” she said.
“These larger projects, because of their economy of scale benefits, are expected to be viable at lower price points, and once operationalized at sufficient numbers, should result in downward pressure in electricity rates.”
This arrangement, like the first, it is a buy-all sell-all.
At the end of the 20-year FIT contract period, a new contract will be needed based on several factors, including existing value of the assets and the costs of fuel.
Introducing the FIT programme last year, Bryan said the first round would run from October 2019 to December 2021 or until the new limit of 32.7 MW has been used up, whichever comes first.
The FIT rate for the solar systems up to 10 kilowatts (kW) is 42.75 cents/kWh; for solar systems above 10kW to 100kW, 44.75 cents/kWh; solar systems above 100kW to 250kW, 41.75 cents/kWh; solar systems above 250kW to 500kW, 38.25 cents/kWh; and solar systems over 500kW to 1 megawatt, 36.25 cents/kWh.
The FIT rate for wind up to 10kW is 39.75 cents/kWh; wind above 10kW up to 1 megawatt is 38.25 cents/kWh; biogas systems up to 1 MW is 44.25 cents/kWh; and solid biomass up to 1MW is 52.25 cents/kWh.
Renewable energy advocate and businessman Ralph Bizzy Williams was on record expressing joy at the new FIT rate system when it was introduced last year, saying the rates were “bankable and will result in additional investment” in the sector.