Amid growing concerns over electricity price hikes, Minister in the Ministry of Finance Ryan Straughn is banking on renewable energy investments to stabilise energy costs as the government’s long-term strategy.
Speaking with Barbados TODAY on Wednesday, Straughn acknowledged the immediate challenges posed by rising electricity costs but emphasised that the government’s broader vision focuses on transitioning away from fossil fuels to reduce exposure to global fuel price volatility.
“The government continues to monitor the variability in pricing around electricity,” he said. “The long-term solution really is, and has been, to be able to invest more in renewable energy, which will actually lower the cost of electricity.”
Straughn acknowledged that investment in renewable energy comes with upfront costs: “Whilst the investment is probably going to be able to address some of the issues in relation to electricity, it will take investment, and there’s no getting around that that investment has to have a rate of return, and therefore, to get lower costs, somebody has to put in the money to invest in these things, or to get lower costs in the future.”
“We are confident that notwithstanding the tariff as proposed, that so long as we are able to get Barbadians to do more investment in renewable energy, then I’m confident over the medium to long term that the production cost of electricity should come down, and therefore that should also translate into lower costs,” he added.
With the approval of new legislation to address long-standing issues within the energy sector, the minister expressed confidence in a future where renewables would play a central role in lowering production costs.
At the same time, he pointed to the country’s continued vulnerability to external crises, like those in the Middle East, which drive up global fuel prices and, by extension, domestic electricity costs.
Straughn said: “The longer that we take to be able to transition away from fossil fuels, then it means that every time there is a crisis or something of that nature, we will continue to be exposed because the production, the cost of acquiring the fuels would have gone up, and that variability is what we are trying to make sure that we have sufficient resilience across the production landscape for renewables that mitigate against that volatility there.”
In response to the immediate financial strain on households and businesses, he reiterated that the government has implemented measures like reducing VAT on the first 250 kilowatts of electricity, a move intended to offer some relief while longer-term plans take shape.
Straughn further urged consumers to consider renewable energy options, even on a smaller scale, as a way of shielding themselves from fluctuating electricity prices.
“Whilst the government continues to monitor it, I can only urge Barbadians, as much as possible, whether individually or collectively, to work together in relation to investments in renewables, which helps to protect them from the variability in these shocks,” Straughn said.
The government’s commitment, he added, remains to pass on cost savings to consumers as renewable energy reduces production costs in the long run.
