Strategic investments in the country’s renewable energy sector can immediately assist in Government’s need to urgently cut spending by $400 million.
The inclusion of a dispatchable photovoltaic peak-shaving framework in Government’s long awaited energy policy could potentially reduce fuel imports for electricity generation by approximately $150 million annually, if implemented over the next 12 to 18 months.
The Barbados Light & Power Company Limited (BL&P) currently employs a range of generating plant producing electricity via a mix of fossil fuel sources to meet daily load demands.
Of its existing plant, the low speed diesel generators are the most efficient, employing the cheapest fuel source, heavy fuel oil, which accounts for 60 per cent of the total fuel consumption costs.
The remaining 40 per cent of fuel purchases consist of the most expensive fuels, namely, diesel and aviation fuel, both of which are utilized in the BL&P’s least efficient peaking plant during the daytime.
The establishment of a photovoltaic peak-shaving independent power producer (IPP) framework consisting of 20 to 30 one megawatt (MW) 20-year contracts, backed by storage, would reduce or eliminate the BL&P’s use of its most expensive fuels and least efficient generating plant, whilst ensuring grid stability through supplying “firm power”.
It should be noted, that on rainy or overcast days, there is a commensurate decrease in photovoltaic production and the demand for electricity, as air conditioners, which significantly account for daily usage of electricity during peak demand periods, operate more efficiently in cooler conditions.
Significant foreign investment would be attracted through the creation of this photovoltaic peak shaving IPP framework. However, from an energy security and domestic wealth creation perspective, it would be best financed with capital from local investors and the deposits of average Barbadians currently being held in commercial banks and credit unions.
Approximately US$80 to US$100 million would be required to procure and install the 20 to 30 MWs based on current global and local estimates. The reiterated assurances from the Governor of the Central Bank on the strength of our foreign reserves, suggests that this level of expenditure can be currently accommodated.
The cost effectiveness of a photovoltaic peak-shaving mechanism had been established in a 1996 study entitled The Performance And Economics Of Dispatchable PV Peak Shaving In Isolated Island Electric Utility Systems by Dr J. Byrne et al on 14 Caribbean Electric Utility Services Corporation (CARILEC) members, which included the BL&P.
The study found photovoltaic peak-shaving was economically viable for islands with utility rates above US$0.20 per kilowatt hour (kwh).
Electricity rates in Barbados are currently around US$0.35 per kwh. Several studies have since been conducted and implemented globally, which all highlight the economic viability of photovoltaic peak shaving over fossil fuel options, particularly natural gas fired peaking plant which is currently being considered by BL&P.
A dispatchable photovoltaic peak shaving framework would result in lowering the monthly fuel clause adjustment for all consumers, which currently accounts for over 65 per cent of all electricity bills.
Unlike several of the other options currently being considered for cutting expenditure, the establishment of the suggested framework would redound to the benefit of the entire country by lowering the fuel import bill and retaining foreign exchange, creating sustainable jobs, lowering electricity rates for all customers, improving the cost effectiveness of electrified transportation (vehicles and buses) and most importantly, lowering the cost of living and promoting economic growth.
• Aidan Rogers is an attorney at law and public relations officer for the Barbados Renewable Energy Association.
