Barbados serves as an example of how well-structured policy incentives can boost demand for distributed renewable energy and reduce utility-scale generation. In 2013, the country published an extensive tax incentive policy to benefit activities related to renewable energy, particularly self-generation. The Barbados net metering regulation has been in force since 2010 and has since been modified to quadruple the program’s capacity cap. This has led to a 9% cut in generation from thermal plants in 2016, compared to 2010 levels.
Still, Barbados’ power generation fleet relies mainly on imported oil. Although the country 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 2016, Barbados had 249MW of utility scale installed capacity. The bulk of it (239MW) is powered by oil and diesel plants. The remaining share comes from a PV plant commissioned in October 2016 in Saint Lucy Parish. 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.
In February 2015, the Barbados Wind and Solar Integration Study was published by Barbados Light and Power Company (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 centralized 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 program. Currently, the island nation allows for up to a total of 20MW of distribution generation in the grid. As of March 2017, 14MW of distributed solar PV had been installed.
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.
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 three 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 a non-legally binding 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.