Times are so hard in Barbados and other Caribbean islands that Governments and citizens are on a never-ending search for solutions.
Debt payments are huge, fiscal deficits are a major headache, investors have been cautious, and depressed economic conditions in key international markets have contributed to the difficult circumstances.
With the cost of energy long considered something on which important and increasingly limited foreign exchange resources are spent, finding a solution to this high price has also increasingly been the focus of authorities.
In this regard, it has dawned on many that the region, with its abundance of sunshine all year, its wide and deep territorial waters, and often windy conditions, has many of the ingredients needed to develop buoyant energy sectors.
The result has been the frequent use of phrases including renewable energy, alternative energy, and the green economy. And as financial resources dwindle and the price of imported fossil fuels become an increased burden, pressure has mounted on countries like Barbados to do something about the problem rather than simply talk about it.
In the case of Barbados, like some other Caribbean islands, diversification of the energy mix to include the generation of electricity from solar power, for example, has therefore become a great focus.
The island has formalised this effort with financial support from the Inter-American Development Bank and the related formulation of a Sustainable Energy Framework to guide the effort.
Part of its objective was “to promote and support sustainable energy and energy conservations programmes in order to ensure a sustainable development in Barbados and provide alternatives to minimise the dependency on fossil fuels”.
Other regional islands, including those in the English-speaking Caribbean, have also started to pursue energy diversification under structured programmes, and private sector entities have been increasingly leading the way, as in some cases Governments struggle to get the requisite policies in place.
Speaking on the topic recently, Minister of Industry, International Business, Commerce and Small Business Development Donville Inniss reiterated that Government’s objective “is to have approximately 29 per cent of all electricity consumption in Barbados being produced from renewable energy sources, along with a 22 per cent reduction of overall electricity consumption by the year 2029”.
“The Government has done its part by providing the appropriate legislation, fiscal incentives and some measure of financial support along a solid regulatory environment via the Fair Trading Commission.
“The onus is now on households and businesses to take the baton and to run with it,” he said.
Before that, Minister of Finance and Economic Affairs Chris Sinckler had idenfitied the sector as key to Government’s economic growth strategies. He mentioned “a suite of incentives for renewable energy and the Electric Light and Power Act” in this regard sand said this sector and the cultural industries would be “two new foreign exchange and employment-generating sectors and represent the most significant efforts to restructure and diversify the Barbados economy since the rise of the international business sector”.
Such views are in sync with what is taking place internationally, where economists and others have linked energy to economic growth.
In a 2012 report entitled Energy For Economic Growth, the World Economic forum concurred with this view.
“As the world struggles to emerge from a global recession and financial crisis, countries are looking for solutions to improve domestic economic performance and put people back to work.
“Global energy demand and prices have been resilient during the recession, leading policy makers in countries with the potential to produce energy to look to that sector as a potential engine for economic growth,” it said.
“The energy sector constitutes a relatively modest share of GDP in most countries, except for those in which oil and gas income loom large. However, the energy sector’s impact on the economy is greater than the sum of its parts.
“Most importantly, energy is an input to nearly every good and service in the economy. For this reason, stable and reasonable energy prices are beneficial to reigniting, sustaining and expanding economic growth.”
