All commissioned systems of 500 kilowatt or less and licences issued for systems of this capacity as at July 6, 2019, will be “ring fenced” at the current rates for 20 years for electricity supplied from renewable energy sources.
Minister of Energy and Water Resources, Wilfred Abrahams, made this revelation during a press conference on Tuesday, at the ministry’s conference room, Country Road, St. Michael.
In addition, he noted that the Fair Trading Commission (FTC) would set rates for electricity supplied from renewable energy sources for systems up to 1 megawatt (MW) using feed-in tariffs by July 6.
Minister Abrahams said that he is optimistic that this methodology to the pricing policy for the renewable energy sector “would kick start the sector and catapult us to where it is we want to get, that is, to a 100 per cent renewable energy and a carbon neutral Barbados by 2030”.
Noting the fuel import bill for 2018 stood at $513 million, the Energy Minister explained that the decision to have a fixed rate for commissioned renewable energy systems and new systems, for which licences have been issued until July 6, for 20 years, is “an effort to accelerate the process of connecting renewable energy systems to the grid, to reduce the importation of fossil fuels, and to help drive the cost of electricity down”.
He further explained that the decision was approved by the FTC, the Ministry of Small Business, Entrepreneurship and Commerce, sector stakeholders and related ministries that have an input or concern within the energy sector.
Highlighting another benefit Minister Abrahams stated “because the current rates for the feed-in-tariff were temporary, people found it difficult to get loans based on temporary rates…so it became difficult for potential investors to get the funding and financing they needed to push renewable energy systems.
“By fixing the existing rates for 20 years, we’ve protected those who took the risk in the early days to invest…and there is certainty you can now take to the bank.”
Minister Abrahams said the unavailability of financing for renewable energy projects had effectively grounded the sector to a halt, and this ‘good faith gesture’ of a fixed rate to people in the sector would help, and also encourage smaller investors, in particular, to get on board.
“So that between now and July 6, this year, we expect to see a plethora of licence applications for people willing to take advantage of this rate that is fixed now for 20 years,” Minister Abrahams stated.
The Minister of Energy and Water Resources pointed out that after July 6, the FTC will make a determination on the appropriate methodology or combination of methodologies for the pricing of renewable energy systems to be connected to the grid over 1MW.