A new revenue protection framework is expected to go before Cabinet shortly, designed to counter a projected loss of some $300 million in fossil fuel vehicle taxes as Government drives towards its goal of near 100 per cent renewable energy usage by 2030.
Minister of Energy, Small Business and Entrepreneurship Kerri Symmonds also disclosed that his technical officers are working with the Barbados National Oil Company Limited (BNOCL) to devise strategies for switching mechanisms for the commercial introduction and supply of biofuels, an initiative he said, which provides for future investment and economic growth.
“We are equally conscious that the replacement of the nation’s fleet of internal combustion vehicles, will cause the Inland Revenue Department to potentially face a loss of $300 million estimated in terms of fuel-related taxes,” Minister Symmonds told delegates at the official opening of the second Barbados Sustainable Energy Conference and Expo 2021 on Monday.
He revealed that the studies on alternative taxation mechanisms which could be deployed in order to compensate for the potential and possible revenue losses that might result from the “broad-based introduction” of renewable energy vehicles in Barbados, have been completed.
“That work has been done by the technical people in my ministry. That work, essentially constitutes a safety net for revenue protection and generation and constitutes yet another point of national growth in terms of the Barbados economy,” he added.
Symmonds said the Government’s commitment to “decarbonizing” the transport sector has outstripped the pace at which the global vehicle manufacturers are going and can go.
“So as I speak to you, therefore, there are a number of makes and models and types of vehicles, especially in the heavy-duty construction sector and the agricultural sector in Barbados that has neither a hybrid nor electric equivalent; and Barbados is therefore ahead of most of the world with respect to commitments to building out a clean and a green transportation sector,” he stated.
He revealed that the Government’s national energy policy which was articulated in 2019 will need to undergo a major overhaul.
The minister said it prescribes a broad energy mix which includes solar PV, wind, ocean energy and biomass, but requires equally transformational and reformation work, which has to be done if Barbados is to undergird both the policy and the new market structure that have been created.
“It entails the creation of an integrated resource and resiliency plan, and that plan diagnoses the current market context which faces us today. It forecasts future demands across all the sectors of energy activity. It evaluates our supporting resource options and offers scientific assessments of critical issues, for example, generation and transmission of electricity, planning and storage technology,” the energy minister pointed out.
Symmonds also announced that the “integrated resource road map” has now been settled and is now ready to be submitted to the Cabinet of Barbados for its final approval.
“The implementation plan for the national energy policy plan makes provision for energy storage as part of the investment portfolio for renewable energy technologies in Barbados. Having said that however, the heavy-lifting of designing appropriate storage policy had to be done in order for us to adequately satisfy the requirements of the economic regulator and also to ensure that the policy will align with the national energy goals,” he added.
He said this body of work was also recently completed and the final consultations with stakeholders on the energy storage policy were held last week and he expects there to be a new energy policy before the Cabinet within the coming weeks.
“This in turn will help us to pave the way for the FTC [Fair Trading Commission] to design tariff rates which are applicable to various types of storage services in Barbados. Once again it will open another avenue for broad-based investment opportunities in this sector, further democratizing energy opportunities in the sector,” he declared.
The minister pointed out that together with a power purchasing agreement, the creation of these opportunities would establish a foundation for an anticipated $2 billion of investment in the energy transformation process in Barbados over the coming years.
Symmonds disclosed that Barbados spends an average $550 million per year on such imports, which if continued, would be an act of fiscal imprudence and absurdity.