Barbados has the opportunity to slash electricity rates by as much as 40 per cent once it fully delves into the use of renewable energy, the Government’s chief energy researcher said Monday.
His comments came after Energy Minister Kerrie Symmonds disclosed that Government “was giving way to renewable energy” by ending the 110-year electricity generation monopoly and allowing Barbadians to become “independent power producers”.
The move comes nine years before Government’s self-imposed 2030 deadline to power all its energy needs by renewable resources.
Bryan Haynes, Chief Project Analyst in the Research and Planning Unit in the Ministry of Energy contends that high oil prices are propping up the country’s electricity rates.
During Monday’s opening day of debate on the 2021/2022 Estimates in the House of Assembly, Symmonds said Government had almost concluded negotiations with Barbados Light & Power (BL&P) to end the monopoly.
Symmonds told the House Standing Committee on Finance: “There are some other areas which we have to focus on in terms of the development of this economy and the transformation of it. One of them is the National Energy Policy. It is critical to understand that we are now at the completion stage of a long negotiation with the BL&P that changes the market structure for electricity generation in this country.
“We will shortly be going to Cabinet with three licences for their approval; transmission licence, a licence for dispatch of electricity – they will remain in the hands of the BL&P exclusively – but competition in the sector for the first time will come about as a result of generation of electricity and storage.
“It therefore allows every Barbadian potentially to be an independent power producer and to store electricity and to sell it into the grid. The BL&P will be in this market structure what is called a single buyer or a monopsony and they will buy and dispatch it across the grid. We are also therefore giving life to the idea of renewable energy in all of its variations. Photovoltaic is the one that has the head start at this time, solar energy is coming on stream, biomass is also coming on stream and what effectively we will now have to do is to ensure there is stability in the grid and that is why the dispatch licence is so critical.”
When quizzed by Christ Church South MP Ralph Thorne as to whether alternative energy would lower electricity bills, Symmonds replied that it was a high possibility.
“The simple answer is that is the intention and one of the reasons why we have paid exceptionally close attention and detail to the negotiation with the BL&P in an effort to create the licences which will allow for there to be a new competitive arena for generation of electricity in Barbados,” he said.
Energy researcher Haynes explained that electricity prices were based on the fluctuation of oil prices, admitting that, “prices go up quickly but take a long time to go downward”.
He said it was important to ensure that the use of domestic resources such as the sun, wind and bioenergy was beneficial to investors and consumers.
Haynes said: “That balance has to be struck so that at no point in time there is obscenity in profitability and whereas the benefit of the investment resounds to all involved, including the investor.
“There is an opportunity for us here to bring prices down if we approach the renewable energy sector in a way that creates an environment where we can remove the fluctuations in oil prices that produce energy and we have the potential to, I dare say, to bring it as far down as 40 per cent, but it means we have to be very strong in our regulation, we have to be very strong in our market monitoring to ensure that we get prices that are at a level that is worthwhile to all involved.”
But Symmonds warned that Barbados could not allow foreign investors or wealthy Barbadians to be the sole beneficiaries.
While Government is challenging structure consumers’ rights also need to be protected, he said. (RB)
