Barbados to diversify energy matrix, promote sustainable energy sources with IDB assistance

The Inter-American Development Bank (IDB) has approved a $70 million loan to help Barbados reduce its dependence on fossil fuels by diversifying its energy matrix, promoting sustainable energy sources, and supporting power saving efforts.

The operation, the second in a series of two programmatic loans for the sector, will support policy and legislation moves aimed at promoting renewable energies as well as the rational and efficient use of fossil fuels.

As a result, Barbados is expected to reduce its electricity consumption by 19 percent by 2029.

Greater efficiency will also enable Barbados to cut its oil import bill by about 30 percent over a 20-year period, yielding cumulative savings of approximately $600 million. This could have a dramatic economic impact on the population at large, as soaring prices of oil used for power generation mean that Barbados residential users currently face one of the highest electricity rates in the world—$0.30 per kilowatt hour.

Under the plan, the country will aim to have 29 percent of electricity consumption come from renewable sources such as photovoltaic, solar water heating, wind, biomass cogeneration, and waste-to-energy projects by 2029.

The program will also advance plans to promote the use of biofuels by blending ethanol with gasoline, encourage the use of natural gas as a substitute for other types of fossil fuels, and replace incandescent light bulbs with more efficient alternatives.

The program will enable Barbados to reduce greenhouse gas emissions by around 4.5 million tons of carbon dioxide equivalent by 2029; it will support energy sector climate-change initiatives; and will help fund institutional strengthening, public education and awareness, and capacity building drives to promote sustainable energy and conservation initiatives.

The loan is for a 20-year term, with a five-year grace period, and at a variable interest rate based on LIBOR

IDB. News Releases.Nov 8, 2011

A review of solar energy: markets,economics and policies

Solar energy has experienced phenomenal growth in recent years due to both technological improvements resulting in cost reductions and government policies supportive of renewable energy development and utilization. This study analyzes the technical, economic and policy aspects of solar energy development and deployment. While the cost of solar energy has declined rapidly in the recent past, it still remains much higher than the cost of conventional energy technologies.

Like other renewable energy technologies, solar energy benefits from fiscal and regulatory incentives and mandates, including tax credits and exemptions, feed-in-tariff, preferential interest rates, renewable portfolio standards and voluntary green power programs in many countries. Potential expansion of carbon credit markets also would provide additional incentives to solar energy deployment; however, the scale of incentives provided by the existing carbon market instruments, such as the Clean Development Mechanism of the Kyoto Protocol, is limited. Despite the huge technical potential, development and large-scale, market-driven deployment of solar energy technologies world-wide still has to overcome a number of technical and financial barriers.
Unless these barriers are overcome, maintaining and increasing electricity supplies from solar energy will require continuation of potentially costly policy supports.

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