WHAT DOES THE FUTURE HOLD for renewable energy in Barbados? What should be our next steps to shape and achieve that future vision?
The answer should be simple: The future is bright for us given the abundance of clean energy potential we have in the tropical sunshine and the prevailing trade winds, but the next steps that we need to take to exploit this potential for our future benefit is not such an easy answer.
The facts – Barbados is a tropical paradise that enjoys at least five hours a day of energy-producing sunlight throughout the year, unlike most of the developed countries that have four seasons and therefore much less productive hours of sunlight.
When we look around the world we see significant activity with the installation of renewable energy systems led by photovoltaic (PV) power and wind power systems.
Germany is now the leading country in the world for Solar PV and wind penetration with over 1.4 million PV systems installed and with 31 per cent of the country’s total energy requirement supplied by renewable energy. So why are we not following Germany’s lead?
In the Renewables 2014 Global Status Report – Barbados is fourth in the world for solar water heating capacity per capita. This is a great achievement, and it shows that Barbados can be a world leader in the adoption of one type of renewable energy system, but when it comes to Solar PV penetration we are not even on the radar.
Why?
Germany is spending, and has spent, a significant amount of money to get to this point. This development was driven by government funding. This has now forced the German government to introduce a number of taxes and levies to pay for all that development.
The rapid development of Germany’s renewable energy network has come at a price. Germany now has the highest cost/kilowatthour in Europe for their energy. Average electricity prices for companies have jumped 60 per cent over the past five years because of costs passed along as part of government subsidies of renewable energy producers. Prices are now more than double those in the United States (US) – Wall Street Journal article – Germany’s Expensive Gamble on Renewable Energy
In spite of this, Germany still has one of the most aggressive renewable energy programmes in the world. Germany believes that reducing and reversing the effects of climate change is a compelling enough reason to continue with their plans.
What can be learnt. There are many lessons to be learnt from the German model. Government imposed subsidies have been used as an instrument to facilitate the growth of renewable energy across the world.
However, the real question is how much is too much? It appears Germany has done too much in the way of subsidies leading to higher costs to the consumer.
The important question is how can Barbados avoid this trap, and build the right level of renewable energy capacity without the long-term negative cost impact to the energy consumer.
What is the right balance of government subsidies and organic market forces? Most developed and developing nations are struggling with this question; however, we can learn from the state of Michigan in the US.
“Recent Michigan wind contracts are coming in at $45 to $50 per megawatt hour. And the Lansing Board and Water and Light recently received bids to purchase solar power as low as $65 per megawatt hour. This compares to Michigan Public Service Commission (MPSC) estimates of coal at $133 per megawatt hour and $70 per megawatt hour for natural gas.” – The Detroit News.
It is important to clear up another point: Michigan does not subsidise renewable energy. Clean energy, including wind and solar, receives no subsidies from the state of Michigan.
This shows that with the right economic environment it is possible for renewable energy to stand on its own merits. Barbados still does not have a comprehensive policy on renewable energy.
However what the Barbados Government has realised is that the traditional policy of taxing imports to collect revenue for the Government would put renewable energy at a disadvantage simply because at this stage we are not importing large enough volumes of solar PV panels to have comparative price/cost efficiency as fossil-fuel based systems.
So while we can understand the apprehension and delay, we can all agree we have to develop and implement a policy and do it as a matter of urgency in order to reap the benefits of using renewable energy in a sustainable way as it will take years to implement enough renewable infrastructure in Barbados to make any meaningful impact on oil imports.
Jerry Franklin is managing director of EnSmart Inc. Franklin is an engineer, energy auditor, equipment tester, and energy solutions provider. Part two of this article will be published next week.
