Premium given for investments made in solar and wind technology

Barbados has just announced the implementation of an Accelerated Investment Premium Programme for the renewable energy sector from which Barbadian nationals would benefit.

This programme will incentivise the sector by promoting and encouraging local investment. This Accelerated Investment Premium Programme will take the form of a 25 per cent premium for investments made in solar and wind technology systems above one megawatt (MW) of power and up to three MW of power and a 20 per cent premium for investments made in solar and wind technology systems above three MW of power and up to five MW of power.

Barbados Energy Minister Kerrie Symmonds, who made the announcement, advised that, “these investment premiums will be applied to the prevailing tariff rates established by the Fair Trading Commission (FTC) and will continue for a period of 12 months. In an effort not to disadvantage applicants who have already applied, but are still awaiting licences, these premia will be made retroactive to cover the period from October 1, 2020 and will continue for the period of 12 months from today as previously indicated or until the new limit of 75 MW has been utilised, whichever comes first”.

According to the energy minister, “we believe the premia will offer an incentive to Barbadians to get more involved in the generation of renewable energy, as well as the stimulation of economic activity and employment, and also to position themselves to benefit from the process of greening the Barbadian economy”.

He argued that, with this premium programme for the renewable energy sector, Barbados has the opportunity today to bridge two things – to accelerate the country’s steps towards shaping its pristine environment and the need for investment today in the economy.

Feed-in tariff to drive investment in renewables

He further described that “this can be done, through the use of feed-in tariffs to drive investment in renewables, so that we can get to net-zero emissions and a sustainable future. The bridge of which I speak is an Accelerated Investment Premium on the FTC’s determined feed-in tariffs for solar and wind generation. This Accelerated Investment Premium is designed to deliver a green recovery to Barbados and create green opportunities for employment and investment to Barbadians”.

The energy minister disclosed that, “there are local potential investors who are seeking an opportunity to make investment and drive economic activity and employment in the land of their birth. We believe that one of the more efficient ways in which a country can spur development and growth, is to encourage investment from within, by local entrepreneurs. In this regard, we emphasise that investment can be incentivised within the local energy sector, through the minimisation of risk in this overarching climate of uncertainty”.

As at December 2020, Barbados had an installed capacity of 49 MW of renewable energy from solar photovoltaic on the national grid. This consisted of 39 MW of distributed and 10 MW of utility-scale energy and represents 68 Gigawatt hours or an estimated eight per cent of the total electricity consumed, saving an estimated 114,412 barrels of oil or US$9,215,961 in foreign exchange.

Symmonds acknowledged that, “we still have a long way to go in order to achieve our 2030 vision”, and stated that he was honoured to announce the Accelerated Investment Premium Programme for the renewable energy sector for Barbadian nationals.

He advised that the government of Barbados desires an environmentally safe and unsullied future for all Barbadians, and that it is the ambition of his government to shape an environment which is the most pristine in the western hemisphere.

He noted that, “the single most effective way of making our environment less polluted, is by ending fossil fuel burning”.

In March of 2019, the Barbados National Energy Policy 2019-2030 was approved by the House of Assembly. Symmonds explained that, “this robust policy declaration created a bold 11-year implementation horizon within which Barbados would achieve its vision of becoming 100 per cent fossil fuel-free by the year 2030. The goal of achieving net-zero emissions, or in other words achieving an overall balance between the greenhouse gas emissions we produce and the greenhouse gas emissions we take out of the atmosphere, will require substantial investment by the private sector”.

This investment, the minister contended, is driven by feed-in tariffs for renewable energy generators to receive, when they supply electricity to the grid.

“It follows logically, that the higher the feed-in tariff, the more attractive the sector becomes for investment,” Symmonds lamented.