FTC announces new rates for power sold to national grid

Most householders who provide power to the national grid from renewable energy sources up to one megawatts (MW) will now earn less per kilowatt hour (kWh) under the revised Feed-in-Tariff (FIT) rate, according to the latest Fair Trading Commission (FTC) decision.

At the same time, those who provide above one (MW) and up to 10 megawatts (MW) now have the opportunity to earn more through the FIT programme.

And though he questioned the reduction, leading renewable energy investor and businessman Ralph Bizzy Williams told Barbados TODAY he did not believe the reduced rate for the smaller systems would deter people from investing.

However, he believes the focus should be on building storage capacity.

The FIT initiative, which guarantees a rate of return on investment in the renewable energy systems, was introduced in 2019, replacing the Renewable Energy Rider (RER) programme.

In its decision on the new rates, the FTC said the FIT rate for solar PV systems up to 10 kilowatts (kW) is now 34.25 cents/kWh, down from 42.75 cents/kWh.

The new FIT rate for solar systems above 10 kW to 100 kW is 35.75 cents/kWh compared to 44.75 cents; solar systems above 100 kW to 250 kW is 34.75 cents/kWh down from 41.75 cents; solar systems above 250 kW to 500 kW is 39.75 cents/kWh  which represents an increase from 38.25 cents. Solar systems above 500 kW to 1 MW will attract 34.25 cents per kWh, down from 36.25 cents

Meanwhile, the new FIT rate for land-based wind up to 10 kW is 36.75 cents/kWh and wind above 10 kW up to 1 MW is 45.75 cents/kWh. The previous rates were 39.75 cents/kWh and 38.25 cents/kWh respectively.

The FTC noted that capacity shall be allocated on a first-come, first-served basis.

In relation to solar PV above 1 MW and up to 5 MW the FIT rate will now be 26.75 cents/kWh, up from the 23.25 cents/kWh set in October 2020.

Meanwhile, the FIT rate for solar PV above 5 MW and up to 10 MW will now be 25.25 cents/kWh, up from the 21.75 cents/kWh.

The FIT rate for electricity produced from land-based wind technologies above 1 MW and up to 5 MW is now 26.25 cents/kWh and rates for those systems above 5 MW and up to 10 MW is now 25.24 cents/kWh.

This represents increases from 22.25 cents/kWh and 20.25 cents/kWh, respectively.

The FTC said the adjustments made under this programme took into account the impact of the COVID-19 pandemic on technology prices. “It is hoped that the initiatives made under this programme will promote greater uptake of renewable energy online while providing investors with price certainty,” the commission said.

Williams told Barbados TODAY it seemed “a little strange” that the rates for the smaller systems would be decreased, given that the current government administration has been promoting the need for all homeowners to have the solar PV systems installed.

“The cost of installing solar has actually gone up due to COVID-19 and all the various other things that have occurred due to shipping and all those things. So it is a little strange, but I am sure that the Fair Trading Commission has studied this very carefully and has decided what they want to do,” said Williams.

Acknowledging the slight increase in the FIT rate for power from PV systems between 250 kW and 500 kW, Williams said “I believe that the policy is going to be to encourage more systems in that range.”

However, pointing to the need for bureaucratic issues to be ironed out, Williams said at the same time, the focus should now be on storage capacity.

“We have no rates announced for storage of electricity and until we have that and it makes financial sense to install storage, we are not going to progress very fast in the move to renewable energy use because a lot of the grid feeders are already up to the 5 MW capacity,” he said.

Barbados is seeking to have all its energy needs from renewable energy sources by 2030.

The new FIT rates for systems up to 10 MW will be in place until July 30, 2023, while the rates for systems up to 1 MW will remain in effect until the end of the year, or until the allocated capacity is satisfied.

A total limit of 40 MW has been allocated for systems above 1 MW and up to 10 MW, while a total limit of 32.6 MW has been allocated for systems up to 1MW, and has been subdivided among wind (5 MW) and solar photovoltaic (PV) technologies (27.6 MW).

FIT contracts obtained under both categories, which took effect from January 1, 2023, will be effective for 20 years, which means that the Barbados Light & Power Company Ltd. will purchase the output of each respective renewable energy facility during that period. 

marlonmadden@barbadostoday.bb