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THE ISSUE (ON THE LEFT): A chance to reduce fossil fuel usage


Barbados Business Authority

THE ISSUE (ON THE LEFT): A chance to reduce fossil fuel usage

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Should Barbados pursue a 100 per cent renewable energy system?

Over the last couple weeks the tale of a 100 per cent renewable energy solution for Barbados has received attention publicly and privately, thanks to the initiatives of the Barbados Renewable Energy Association (BREA) and a German professor of energy economics, Dr Olaf Hohmeyer.

We were informed that it can be done, it needs to be done sooner rather than later and that it’s a win-win for everyone – consumer, country and utility company.

In a world of near panacea, consumers and businesses benefit from lower electricity rates, the country benefits from becoming significantly less energy dependent, reduces its foreign exchange losses to oil imports substantially while becoming more competitive and the transition from fossil fuel generation and distribution benefits the utility company, namely the foreign-owned Barbados Light & Power Company Ltd.

And there is good news for a Government that will most likely be struggling with earning and raising revenues for quite some time. It, too, will benefit from taxation.

The role of both regulators, Government and the Fair Trading Commission (FTC), could make or break this perceived gem of an opportunity.

In the Organisation of Eastern Caribbean States (OECS) it would appear, subject to deeper analysis, that the roles of Government and regulator appear to be coming together in the interest of the consumer.

Today the legislation is allowing Dominica to press ahead with a transition from fossil fuel imports to alternative energy.

Here the role of the regulator going by the outdated name of Eastern Caribbean Telecommunications Authority (ECTEL) has been critical as ECTEL and the Governments seem to appreciate that regulation needs to offer clear benefits to the consumer.

In Barbados, the role of the two regulators are critical to any major energy conservation and transition plan. But a review of price regulation since 2003 could lead to an assumption that it is the utility companies and not the consumers who have been winners.

In Dominica and Jamaica energy liberalisation is being pursued with the expectation that there is a role for independent power providers (IPPs) and that the future of national energy independence and consumers gain are tied to the unquestionable fact that sooner or later the economics of fossil fuel-based existence will fall flat like a disturbed pyramid of playing cards.

But it can only work if there are tangible benefits to consumers, not higher rates, restrictions, more taxation and regulation that favours the regulated utility to the detriment of the citizen and the national economy.

I have not commented extensively on the Fair Trading Commission’s decision on “Buy All/Sell All” in relation to the Renewable Energy Rider (RER).

The commission seems to have accepted the argument by the utility company that while the consumer bears considerable investment cost to have an energy system that is tied to the grid under the RER, the consumer should not be allowed to benefit from a rosy return on investment.

The ruling that a consumer who invests in a grid-tied system is forced to sell all of the electricity generated back to the utility at marginal benefit and cannot utilise that investment as they so please still has me floored.

But this and other decisions must raise alarm bells about the role of the regulator in any transition to 100 per cent renewable energy utilisation when it comes to feed-in tariffs, other aspects of price regulation and its determination of consumer benefits or restrictions.

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