Barbados’ power generation fleet relies mainly on imported oil. Although Barbados produces some oil, domestic demand greatly exceeds local supply. This dependency impacts the Barbadian economy at the macroeconomic level and at the consumer level. In 2012, Barbados committed to increasing the share of renewables in its energy mix to 29% by 2029.
Barbados’ electricity market is managed by the Barbados Light & Power Company (BLPC), a private vertically-integrated utility. The Fair Trading Commission regulates electricity rates and service standards. The Energy and Telecommunications Division in the Prime Minister’s Office is responsible for developing and implementing energy policies.
In 2015, Barbados had 239MW of installed capacity powered by oil and diesel fuel. A fuel clause adjustment (FCA) is included in the retail electricity prices, which calculates and reflects the amount of fuel used to generate electricity consumed by customers. It allows both reductions and increases in fuel costs to be passed along to consumers.
While electricity demand is expected to grow by an average of 1.2% per year, 104MW of installed capacity is scheduled for retirement over the next four years. In 2012, the Barbados Declaration on Achieving Sustainable Energy for All in Small Island Developing States included a commitment to increase the share of renewable energy in its energy mix. It set an indicative target to get 29% of all electricity consumption from renewable sources by 2029. In addition, it committed to achieving efficiency savings, and set an indicative target to reduce consumption by 22% below a ‘business as usual’ scenario by 2029. To help plot a more detailed course toward these goals, the government has commissioned studies.
In February 2015, the Barbados Wind and Solar Integration Study was published by BLPC. It concluded that under current operating conditions, the existing grid can accommodate up to 20MW of distributed PV, 15MW of wind and 20MW of centralised PV. The study also suggests measures to maintain grid reliability and security.
Net metering has been allowed in Barbados since 2010, and consumers with wind and/or solar self-generation facilities may supply energy to the national grid via the Renewable Energy Rider programme. In February 2015, the programme limit was raised from 5MW to 20MW. As of May 2015, 8MW of distributed solar PV had been installed. The 20MW distributed PV limit is expected to be reached by the end of 2016.
Since 2013, Barbados has granted tax exemptions and deductions for activities related to renewable energy and energy efficiency. The first centralised PV plant is under construction in the St. Lucy district. The 10MW plant will be owned and operated by BLPC and is expected to be commissioned by the end of 2016.
Barbados scored 0.94 in Climatescope 2016, a marked increase on the previous year. It gained one place to rank 43rd on the list of countries overall, but jumped eleven notches on Enabling Framework Parameter I.
Its score on Parameter I increased to 1.20 in the current survey from 0.74 in 2015, putting it in 35th place. Low import duties on clean energy goods and tax incentives were among the positive factors, while a fall in the island’s average retail electricity prices was negative.
Barbados also ranked 36th on Clean Energy Investment and Climate Financing Parameter II, unchanged from 2015. Its relatively low average cost of debt (8.06%) helped to support this score.
The Low-Carbon Business & Clean Energy Value Chains Parameter III score was marginally higher, but the country dropped three positions to 44th. The availability of corporate finance was one positive factor.
On Greenhouse Gas Management Activities Parameter IV, Barbados placed 48th, a weak performance that reflected its lack of carbon-offsetting activity, among other issues.
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