New rules for Barbados RE producers

Producers of electricity from renewable energy sources can now sell more power to the Barbados Light & Power Company (BL&P) under the Renewable Energy Rider (RER) programme at a fixed rate.

Additionally, in announcing its decision today, the Fair Trading Commission (FTC) set a temporary rate for the power, something businessman Ralph Bizzy Williams has been advocating for over the past few months.

The FTC said the decision was taken to increase the capacity limit to 500 kW from 150 kW and set a temporary RER credit at $0.416/kWh for solar photovoltaics and $0.315/kWh for wind, “until such time as a permanent rate may be established”.

The utility regulator said the decision was taken after careful review and discussions with stakeholders, which commenced on April 22 and concluded on May 13.

“The primary purpose for the review of the RER at this time is to address the concerns of current and prospective renewable energy suppliers and installers who have advised of the current uncompetitiveness and lack of economic viability of the RER credit. This is due to the low value of the RER credit, which is occasioned by the general low oil prices on the international market.

“Additionally, the motion considers the expansion of the RER programme to allow it to be accessible to suppliers with generating capacities up to 500 kW,” the FTC said in its statement.

“This motion is focused on the temporary establishment of an RER credit that will offer RE suppliers a level of compensation such that RE generation remains economically viable in an environment of low oil prices.”

It said this approach deviated from the existing credit system, linked to the fuel clause adjustment, based on the BL&P’s oil purchase price.

“The present approach renders RE suppliers completely vulnerable to the vagaries of the international oil market. It provides no protection to this new industry, one that is being developed and positioned by the Government to contribute significantly to the transformation of this country’s future security of supply status and reduce the outflow of foreign exchange,” the FTC explained.

The regulatory body said under the pilot phase of the programme – which commenced on July 1, 2010 – a credit floor of 31 cents was applicable, but was discontinued in the BL&P’s application for the permanent implementation of the RER.

The FTC said the BL&P was not in favour of a credit floor and had tabled fixed rates.

“It is of the view that fixed long term rates, as proposed in its submissions to the Commission, offer the necessary price certainty to the renewable energy sector,” the FTC said.

Meantime, Williams welcomed the FTC decision, describing it as “a giant step forward in the right direction”.

He told Barbados TODAY while the rate of $0.416/kWh was less than what he was hoping for he was happy with it.

The business magnate said the move meant he would soon seek permission from the Town & Country Planning Department to add additional capacity to the roofs of some of his operations.

However, Williams was not happy with the fees for systems of 150 kW, complaining those fees were too high.

For individuals with an installed capacity of more than 25 kW but less than 100 kW, the application fee is $500, with and additional
one-time licence fee of $100.

According to the FTC, larger systems such as those in the range of 100kW to 150kW attract an upfront fee of $1,150 and an annual fee of $7,000.

However, it said those fees were under review.

Credit: Marlon Madden, Barbados TODAY

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