Govt, NGO partnering to end renewable energy gridlock

The stalled renewable energy (RE) sector is poised for a significant revival, with numerous projects set to begin in early 2025 under a government initiative to address gridlock issues.

In a move announced on Tuesday at a Ministry of Energy procurement design workshop, the government has partnered with an international non-profit organisation to implement a comprehensive plan aimed at unlocking the sector’s potential.

Mauro Soares, co-founder of RELP, focused on accelerating renewable energy deployment in developing countries, revealed that a characterisation study has been conducted to identify current challenges and devise solutions. A key component of the plan involves strategically placing battery energy storage systems to minimise congestion, reduce blackouts, and enhance grid stability.

“Six months ago, the team from RELP began working with the Ministry of Energy and Business and other local stakeholders to design a competitive bidding process,” Soares explained. This process will facilitate the procurement of energy storage systems at various locations across the grid.

The initiative is expected to have far-reaching effects, enabling private RE project licence holders to begin implementation, expediting decisions on pending approvals, and creating a conducive environment for banks to resume lending for RE projects.

Soares added that in the next coming weeks, his team will publish detailed documents of the systems that will be procured, the technologies available and a breakdown of the study. Room will also be made for discussions about the procurement system initiative.

Cofounder of RELP Mauro Soares. (HG)

“That will give lots of information for investors, local developers to work around their projects and do their homework to be ready to go for a competitive bid submission,” he added. “Hopefully before the end of the year, we’ll have final documents and early next year, we might have a bid submission and soon after that, all the projects will be financed and constructed so that we can solve this issue as soon as possible.”

Currently, approximately 207 licences have been granted to approved private RE projects, with an additional 333 awaiting approval. The industry’s growth had been hampered by an overwhelming number of applicants, coupled with the grid capacity of 100 megawatts being reached without adequate storage solutions.

Shimon McIntosh, president of the Barbados Banking Association Inc., gave an assurance that once the procurement storage system is in place, banks will be ready to finance projects.

“There is no shortage of investors interested in the renewable energy sector,” McIntosh said. “As long as we get storage going, we are ready to fund generation side projects or storage projects or co-located storage projects as well.”

McIntosh said it would not be financially wise for the banks to finance renewable energy projects that could not get on the grid.

He said: “Right now the grid is full so if I were to finance a project that will not get connected to the grid or get connected to the grid at a reduced level, then that’s going to impact project cash flow is going to impact their ability to pay a loan. So we will not go down that road right now.

“But once we have the storage solution that we are going through right now, then it creates that capacity to fund those projects. I’m saying to you that once we are afield here, then the banks are going to follow in step with financing as well.”

The initiative comes at a crucial time, as the Barbados Light & Power Company (BLPC) has been engaged in a prolonged dispute with the Fair Trading Commission (FTC) over the implementation of a Clean Energy Transition Rider. The FTC had only approved 15 megawatts of the requested 90 megawatts battery storage system.

President of the Barbados Banking Association Inc Shimon McIntosh. (HG)

Minister of Energy Senator Lisa Cummins outlined that the procurement of energy systems will be implemented in tranches. 

“The first tranche will account for those persons who are already built and are waiting or who are functioning on curtailment, and then you will amortise it over time to be able to bring persons into the grid progressively,” she explained.

Senator Cummins also highlighted the impact of the gridlock on individuals, including retirees who had invested in RE projects but were unable to service loans due to the sector’s stagnation.

The international partnership includes collaborations with the Global Energy Alliance for People and Planet, the Inter-American Development Bank, the business consulting firm Deloitte, the US government’s National Renewable Energy Laboratory (NREL), and the International Finance Corporation, the World Bank’s investment arm. (SZB)