Henry S. Fraser: Light, power and light at the end of the tunnel

Solar panel on a red roof reflecting the sun and the cloudless blue sky

Henry S. Fraser

BRIDGETOWN, Barbados, Sunday August 31, 2014 – The recent announcement of the Fair Trading cap on photovoltaic (PV) inputs into the Barbados Light and Power grid must give us all pause for reflection.

For those who may have missed it, it was announced on August 9th that the Fair Trading Commission had completed its review of the Barbados Light & Power Company Limited’s request to implement the Renewable Energy Rider (RER) on a permanent basis, with new terms. The RER was designed to provide for the sale of excess electricity to the grid by customers generating electricity for their own consumption using solar photovoltaic (PV) or wind energy systems up to a maximum of 150kW. The published determinations of the Commission, as can be seen on the web, are that:

  1. The RER credit of 1.6 times the fuel clause adjustment (FCA) is representative of the BL&P’s avoided fuel cost when consideration is given to, among other things, the type, quantity and cost of the fuel utilised to generate electricity, the generation mix, the cost at peak load and the renewable energy generating capacity limit;
  2. The individual customer capacity limit of 1.5 times the customer’s current usage is appropriate up to a maximum capacity of 150kW;
  3. The capacity limit for distributed intermittent renewable energy generation shall be increased to 7MW. When 5MW capacity is reached, 1MW of the remaining 2MW is to be reserved for domestic, employee and general service customers;
  4. The billing arrangement shall be based on the sale of excess electricity to the grid.

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It seems to me that, with my admittedly limited knowledge of this issue, for most Bajans with any enterprise and appreciation of the logic of domestic PV systems, it is items 3 and 4 that stand out – the billing arrangements, and the decision that BL and P’s limit for the total external PV contribution will be only 7 mega watts.

Several unsolicited opinions have come through my email, including the following:

“The decision by the Fair Trading Commission to grant Barbados Light and Power “Buy all/Sell All” as the only option available to consumers with solar electric systems greater than 2 KW capacity is blatantly bad both economically and environmentally.”

“BL&P will continue to supply our electric needs by burning fossil fuels, they will continue to pollute the environment at an only slightly reduced rate below current levels, and will continue to spend our hard earned foreign currency on overseas supplies of fossil fuels, continuing to negatively impact our currency exchange balance.”

“BL&P says they will pay us more per kilowatt-hour when they buy from our solar systems than they charge us for the electricity that they sell us. BUT THEY NEVER MENTION THE FUEL SURCHARGE which makes their cost of electricity nearly 20% higher than the rate at which they will reimburse us! So, even though we consumers take on debt to install environmentally friendly systems and save money, BL&P will continue to charge us MORE per kilowatt-hour than they pay us!!! This is blatantly absurd!”

“If BL & P is being allowed to limit the input from non-BL & P photovoltaic systems to such a ludicrously tiny contribution, how are they cooperating with Government’s green policy?”

In fact, BL & P’s website states very clearly: “Under current law, only the BLPC is allowed to sell power to the general public. However, the effects of trade liberalization are already being seen in the telecommunications industry and the Company can expect there to be new forms of competition in the supply of electricity in the future. It is expected that the regulatory structure for utilities will move away from a standard rate of return model to one of virtual competition in which there are performance and incentive-based rates. The Barbados Light & Power Company is cooperating fully with the government as it makes these important changes to the regulatory framework and develops new regulations for utility companies.”

That last sentence is difficult to interpret in light of this FTC decision. There are three stakeholders here at present, the Government, the BL & P and the people of Barbados. A fourth is the non-domestic solar supplier, not apparently covered in this agreement, if I understand it correctly. It is rumoured that BL & P is setting up their own solar plant in St. Lucy, which would mitigate against the citizens of Barbados benefitting from their own logical and anticipated initiatives, and the obvious win-win “green” solution to our power needs would be a “six over mid wicket” for BL & P.

When Sir Grantley Adams proposed nationalisation of BL & P in the 1950s in the interest of the people of Barbados, few took him seriously … and when the present owners offered to buy up locally owned shares, a couple of years ago, the option of a quick profit resulted in almost wholesale sell out by Bajans, it seems, with Emera now owning 79.9 % of shares, according to the BL & P website. In other words, Bajans have not only sold the family silver (the National Bank, the major firms and our best Bajan hotels – almost the whole bag) to our Trinibag cousins, but we apparently sold our interest in light and power, and the FTC has now blessed our surrender. Is this acceptable to Government? Are we all rolling over and playing dead or is there light at the end of the tunnel?

henry-fraser-150Professor Fraser is past Dean of Medical Sciences, UWI and Professor Emeritus of Medicine. Website:  profhenryfraser.com