THE ISSUE: Storage of excess a key point
A key part of Barbados’ push towards becoming a green company is the increased production of electricity from renewable energy sources including the sun and wind.
But with Government opening up the market, a move that means increased competition for the incumbent Barbados Light & Power Company Limited (BL&P), the way the special Renewable Energy Rider (RER) offered by BL&P and regulated by the Fair Trading Commission (FTC) is being executed continues to generate discussion.
The RER was first proposed by BL&P when it applied for an electricity rate increase in 2009. It came into force a year later as a pilot programme to be offered for two years, and the electricity company subsequently applied for it to be permanent.
On August 9 last year, after it completed a review of BL&P’s application for a permanent RER, the FTC approved the application and made a number of determinations, including customer capacity, and the billing arrangements.
The FTC said the RER “was designed to facilitate the sale of excess electricity to the grid by customers generating electricity for their own consumption using solar photovoltaic or wind renewable energy systems up to a maximum of 150 kilowatts”, and that it “is not meant to be used by commercial entities as a revenue generating enterprise”. This was because these commercial enterprises were “considered to be independent power producers for which a different legal regime is required”.
One of the main criticisms of BL&P’s RER programme from intervenors and sector observers was the absence of an energy storage component to utilise the excess energy generated by Barbadians participating in the programme.
According to a May 14 BARBADOS BUSINESS AUTHORITY report, while BL&P said such an option was too expensive, it was favoured by others because it “would allow excess power generated during low-demand periods to be used when increased electricity supply is required”.
“The technology is improving substantially and has improved substantially but we’re still at a position that it probably would come at a substantial cost and then the question would be who would bear that cost,” BL&P chief operating officer Stephen Worme said during an FTC hearing on the issue.
Alternative energy sector stakeholders argued, however, that the five megawatts limited capacity recommended by BL&P “had little or no impact on Barbados’ $800 million annual oil import bill” and they recommended that it be capped at 30 megawatts.
In its August 2013 ruling, the FTC “determined” that “the capacity limit for distributed intermittent renewable energy generation shall be increased to seven megawatts”, adding that “when five megawatts capacity is reached, one megawatt of the remaining two megawatts is to be reserved for domestic, employee and general service customers”.
In December last year, BL&P applied for a review of the FTC decision, specifically a change in the billing arrangements. The FTC had ruled that “the billing arrangement shall be based on the sale of excess electricity to the grid”.
Then on January 24, the utility regulator said it would grant a stay of its August 8, 2013 decision on the grounds that “the terms and conditions existing prior to the RER decision apply to new customers only”, and that “existing RER customers continue under their present arrangements until the Commission determines [BL&P’s motion to review and vary the RER decision”.
Whatever decision the FTC reaches in the coming weeks, and possible months, it will have major implications for the future of the island’s renewable energy sector.
That’s because it will likely influence the number of Barbadians who will sign up and participate in the RER, which is no longer temporary. Before the temporary RER period elapsed in 2012, more than two dozen Barbadians had participated, earning $19 000 in benefits.