‘Make push toward renewable energy’

In the face of rising oil prices and the possibility of the Barbados Light & Power Company Ltd. (BL&P) getting a rate increase, Governor of the Central Bank of Barbados Cleviston Haynes is warning of the need for a greater thrust towards Barbados becoming 100 per cent renewable energy dependent.

Pointing out that the utility company’s application for an 11.9 per cent rate increase should serve as an incentive for the acceleration of renewables, Haynes said: “In a perverse sense it creates added incentives for us to try to move away towards renewable energy.”

If the rate increase is granted, Barbadians would be paying between five per cent and 20 per cent more on their electricity bills.

The Governor, who was responding to questions during his third quarter economic review on Tuesday, said “We just have to manage the situation. It is obviously a matter that is before the Fair Trading Commission and they are the ones who will have to make an evaluation as to whether or not they deem such a price increase to be warranted at this stage or perhaps they may agree on an increase but not necessarily a significant increase as being sought.

“We will have to work that out. It is important that businesses are able to continue, but what we have to do when these things happen is to look to see if there are alternatives which we can use. One of them I think, will be an increased thrust towards renewable energy, which is the direction which we would want the national economy to go in any case,” said Haynes.

In relation to rising oil and other commodity prices, Haynes said “The one downside that we do have is the uncertainty about prices.”

Pointing to the rising international oil prices which moved from around US$50 per barrel at the start of the year to about $84 per barrel currently, Haynes said “That obviously is a concern as an oil importing country because it impacts not only our foreign exchange but it impacts the cost of doing business and our overall competitiveness.

“Therefore, that is a concern for us, and in that sense, therefore, we continue to emphasize the need for us to get our renewable energy sector going,” he said.

Under the National Energy Policy 2019-2030, Government has so far achieved 52 megawatt (MW) of installed photovoltaic (PV) installation and about 5MW of storage capacity, trailing the target of 64 MW of installed PV and 20 MW of installed storage, according to the implementation plan.

“I think right now our data suggest that we are probably getting almost 8.5 per cent of our electricity from renewables and we want to be able to increase that and increase it more rapidly. That is really the area in which we would be a little concern,” said Haynes.

“Right now it is not overwhelming, but the inflation rate has started to trend up and in a circumstance where there has been a reduction in incomes you can see the disconnect where prices may be rising but incomes have fallen and therefore we need to see a reversal where incomes are rising and prices are stabilizing,” he said.

For the 12 months ending August 2021, domestic prices rose by 1.8 per cent. Price increases were registered for food and non-alcoholic beverages, transportation, housing and utilities, according to the latest Central Bank report.

“The principle drivers for the price increases include international oil prices and freighting costs,” said the report. (MM)