Light and Power’s investment in battery storage ‘on hold… but prices will rise’
By Marlon Madden
The island’s sole electric utility company said it has paused a $600 million investment in the national grid until the regulator decides on its application to fund battery storage capacity under its Clean Energy Transition Rider (CETR) mechanism.
But electricity bills will rise if the Barbados Light and Power Company (BLPC) gets the green light to pump money into storing electricity from renewable energy sources, company officials said during a media call on Wednesday. Consumers can expect to pay another 2.5 cents per kilowatt hour per month, in the first year, as the company seeks to recover that investment.
With renewable energy connections to the national grid quickly approaching the 100-megawatt (MW) limit without storage, amounting to 13 per cent of the electricity supply, the Barbados Light & Power Company told journalists it is hoping that the Fair Trading Commission (FTC) will give a verdict soon on the CETR application for battery storage.
Up to the end of September, renewable energy, largely from photovoltaic cells from homes and businesses has been growing at a rate of two megawatts a month, reaching 89 MW from just over 3,000 BLPC customers, the company said,
Managing Director Roger Blackman said BLPC was itching to invest in battery storage capacity to accommodate the growing number of renewable energy connections as Barbados presses ahead with its target of total reliance on renewable forms of energy by 2030.
While hailing the island’s renewable energy levels as a global landmark, Blackman expressed concern about grid instability and reliability without battery storage as more photovoltaic panels and wind turbines come online.
“It is growing at about an average rate of about two megawatts per month year to date,” he said. “There comes a point, with intermittent renewables like solar PV and wind [turbines], when we need to put batteries in particular on the network… to facilitate the continued growth of the renewable energy sector. There are several investments that have to be made including batteries, to ensure continued stability of the grid.”
For the electric utility to make the investment in battery storage – amounting to about half the value of the utility company – it must now await the FTC’s decision.
Light and Power said that if the application for the investment in battery supplies was not granted by the time renewable energy connections to the grid hit the 100 MW mark in a matter of months, the timing for installation of new systems would have to be adjusted.
In relation to the company’s ongoing application for a rate increase, the BLPC officials said they were eagerly awaiting the decision from the regulator.
The utility company had applied for an 11.9 per cent increase in its base rate back in October 2021, and following a protracted rate hearing that ended this year, is hoping that a decision would be forthcoming in a matter of days, the officials said.
Three years after submitting an application for the CETR mechanism, which forms part of the five-year Clean Energy Transition Programme (CETP) that started in 2019, Light and Power received approval from the FTC in May.
With that approval, the regulator also issued guidelines for the utility company to submit further applications for investments relating to the CETR, which the company did on October 5.
“The timely approval of that CETR is really important as the technical assessments we have conducted over the years did determine that we would require battery storage to ensure continued reliability of the grid once distributed renewable energy grows beyond 100 megawatts,” Blackman said. “And we are quickly approaching that.”
The company’s customer relations executive Kim Griffith-Tang How said time was of the essence for the CETR mechanism, which she said was a regulatory response to the renewable energy build-out and which started in 2018 with the research.
Griffith-Tang How said the company was waiting to invest in about five different projects between 2024 and 2026.
“We have applied under the Clean Energy Transition Rider, to invest in 90 MW of battery storage. Secondly, we need to procure an automatic generation control (AGC) system to collectively and automatically regulate the power output from multiple conventional generation plants in response to fluctuations in electricity,” she told reporters.
“Another critical investment will be the construction of synchronous condensers – large stabilising devices that we will use on the grid… The fourth project we have planned ties in with those investments. We plan to do a pilot called the distributed energy resources aggregation and control platform.
“It is to, on a small scale, test how we can aggregate all of the solar and storage systems so that we can control those systems remotely. As the utility, we have to have ultimate control to ensure those systems are operating optimally across the grid.”
Griffith-Tang How added that another investment under the CETP was the interconnection infrastructure, which would hook up large independent power producers to the national grid. This would mean an upgrade of the transmission and distribution lines, she added.
“Before we make those investment decisions we need to ensure that we are all aligned because it is quite costly,” she said. “The cost of these projects will increase our asset base by over $600 million, with the lion’s share of that being the batteries.”
