Wednesday, April 24, 2024

First steps to renewable energy (III)


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BARBADOS’ CURRENT electricity demand is 912 gigawatt hours/annum which is small in comparison to most developing nations and can be generated with the current renewable energy technology.

Barbados has a mature solar water heating market but the penetration can still be higher as there are still households using electricity to heat water.

I believe the first challenge to address is the Utility Act. Barbados Light & Power (BL&P) is guaranteed a minimum rate of return every year and they are allowed a 25 year depreciation on their generation plant. All of this was designed to incentivise the utility company to make the significant investments required to provide a relatively clean, stable, reliable power source to its customers.

The first change should be focused at transitioning the current operating model of the utility company. The BL&P is currently the only company allowed to generate power for distribution.

jerryfranklinLegislation to enable independent power producers (IPPs) needs to be implemented. IPPs should only be allowed to generate power using a renewable sustainable energy source. Preparation for distributed power generation should start now to allow for the easy management of IPPs.

This would mean the implementation of a smart grid. The government would have to decide if they will manage it themselves or if they should allow a private company to manage the grid (it should probably be BL&P because they already own the power transmission network).

Things to follow would include the implementation of a grid access fee to allow the grid management company the means to maintain the smart grid; a mechanism for the buying and selling of energy for commercial and residential users/customers by third parties, i.e. a fair way of determining the rate of electricity wholesale pricing and retail pricing driven by market forces with price caps would need to be developed and regulated.

Other proposals:

• Solar water heating systems should be mandatory for all homes and businesses requiring hot water and any existing electrical water heating system should be made to change to solar water heating by a specified time frame.

• New building codes need to be implemented to encourage building designs with features for enhanced natural cooling efficiency, e.g. better insulation where air-conditioning is required. Development of national standards on energy efficiency for appliances and mandate only appliances that meet those standards can be imported.

The adoption of LED lighting to replace traditional bulbs for commercial and residential properties and street lighting.

• The Government should maintain the current duty free and value added tax free regime for renewable energy and energy efficiency products and services for a period determined by set targets for example. Oil imports for the purpose of electricity generation should be reduced by 50 per cent by 2020. Widen the list of exemptions and enforce consistent implementation of the exemption policy.

I also believe no other subsides should be implemented. Subsidies come at a cost and therefore tangible, measurable economic benefits need to be realised.

Realistic targets for the gradual reduction of the level of oil importation need to be set and tracking and reporting on these targets needs to be done on a bi-annual basis to all stakeholders.

This can only be achieved with a more progressive regulatory framework, which is inclusive of the policies I outlined above and any others that are appropriate. This will provide the enabling environment for the market to regulate itself, while delivering on its targets.

These are all ambitious policy goals and will not happen overnight. However to achieve them the authorities must start putting the framework in place now. Moving any country to 50 per cent, 75 per cent and ultimately 100 per cent renewable sustainable power will not be easy and will take bold steps.

The current measures implemented by the Government have already seen new companies emerging and the development of a new sector that has been dominated by a monopoly for many years.

Barbados could have a very bright future where the evolution of the smart grid will make it possible to identify who is producing the power and who is consuming power from that specific provider.

Barbadians will have the choice to self-consume, consume from their choice of provider, sell to the grid or a combination of all three. Barbados will enjoy clean renewable energy while reducing the impact on the environment from fossil fuels.

The economy will have a better chance to grow and thrive due to significantly reduced energy costs and the jobs provided by a developed energy industry.


• Jerry Franklin is managing director of Ensmart Inc. Franklin is an engineer, energy auditor, equipment tester, and energy solutions provider.


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