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The next economic frontier

Aidan Rogers

The next economic frontier

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Over-reliance on fossil fuel imports primarily for electricity generation and transportation continues to be a major burden on the balance of payments for the Barbadian economy, with expenditure on fuel imports accounting for in excess of 20 per cent of total imports and at least six per cent of Gross Domestic Product (GDP) for the past three years.
Since 2007, the negative impact of this situation has been further exacerbated by the global economic crisis, resulting in a fall off in foreign direct investment (FDI) in construction and other related projects, declining tourist arrivals and spending, and reduced foreign exchange earnings from lower corporate tax receipts from international financial services.
In short, Barbados’ reliance on fossil fuels and the protracted duration of the global recession have created the perfect financial storm, with urgent attention now being placed on identifying viable solutions for stabilising the economy within the immediate to medium-term period.
In response, the rapid deployment of renewable energy technology (RET) throughout the island is being heralded as the primary option best equipped to holistically rescue and rebalance the skewed structure of the island’s economy away from dependence on imported fuel for electricity generation and transportation.
Renewable energy (RE) can be defined as a naturally occurring, theoretically inexhaustible source of energy, such as biomass, solar, wind, tidal, wave, and hydroelectric power that is not derived from fossil or nuclear fuel. RET can be defined as devices that utilise or harness renewable energy resources such as solar panels, wind turbines, bio-digesters and hydro-electric turbines.
Globally, the deployment of RET has been identified as one of the fastest growing sectors, with over 50 per cent of new installed electricity generating capacity worldwide comprising of some form of RET since 2009.
Along with this growing trend, has been the emergence of new sources of FDI, non-governmental funding and technical support, diverse employment opportunities and novel foreign exchange earning avenues.
Coinciding with these technological advancements and non-traditional investment opportunities, is the fact that Barbados due to its proximity to the equator, is blessed with an abundance of exploitable RE resources, particularly solar and wind.
In recent years, the cost of deploying RETs, particularly solar photovoltaic panels and wind turbines, has significantly plummeted making the generation of electricity via these technologies cheaper than traditional fossil fuel-based generation, which is currently the mainstay for the island’s lone utility company.
In spite of the availability of these commercially and increasingly economically viable technologies, several barriers such as the absence of a clear policy, legislative and regulatory framework as well the shortage of technical resources continue to militate against the aggressive deployment of RET throughout the island.
In recognition of these deficiencies, the Barbados Renewable Energy Association (BREA), a locally registered not-for-profit organisation, has assumed a key role in articulating a clear direction for the island’s RE sector. Since being established two years ago, BREA has identified a mandate geared towards promoting public education, facilitating training, policy and legislative development, industry standards and the promotion of energy efficiency.
In pursuit of its mandate, in July 2013, BREA, in partnership with RE industry leaders Solaris Global Energy Ltd. (a gold sponsor), Williams Evergreen, Sunpower Hot Water Systems and Caribbean LED Lighting Inc., launched a road Show geared towards public education. The Road Show constitutes the first of several scheduled activities within the association’s 18 month action plan, as greater emphasis will be placed on incorporating the participation of primary and secondary school pupils in the public awareness campaign.
In charting the way forward, BREA has continued to provide a range of technology, policy, legislative and regulatory options to the Government of Barbados geared towards unleashing the several benefits to be derived from the deployment of RETs throughout the island.
Accessing these benefits does not require reinventing the wheel, as several Small Island Developing States (SIDS), similarly dependent on fossil fuels imports and exposed to fuel price spikes, have implemented and continue to develop a range of policies and strategies designed to harness benefits from the rapid deployment of RETs.
The opportunities can emerge through structured deregulation of the island’s existing monopoly over electricity generation, transmission and distribution services, as was done in the telecommunications sector a decade earlier.
In adopting this approach, the introduction of grid interconnection mechanisms at the distributed generation and transmission levels, retail wheeling of electricity, commercial grid storage and electrified transportation initiatives, would all facilitate the sustainable lowering of overall utility rates thereby lowering the cost of living and doing business on the island.
In addition to these measures, the deployment of RETs can create much needed new foreign exchange-earning engines through carbon trading under the Kyoto Protocol’s Clean Development Mechanism (CDM) or via the trade of renewable energy certificates on the various RE trading platforms globally.
Aidan J. Rogers is an attorney-at-law and the Barbados Renewable Energy Association’s public relations officer.