On Feed-in Tariffs for Renewable Energy Technologies up to and Including 1 MW

• Jurisdiction: Barbados
• Court: Fair Trading Commission (Barbados)
• Judgment Date: 30 December 2022
• Docket Number: Document No.: FTCUR/DECFITMAX1MW/2022-13

On Feed-in Tariffs for Renewable Energy Technologies up to and Including 1 MW

Document No.: FTCUR/DECFITMAX1MW/2022-13

FAIR TRADING COMMISSION

DECISION

TABLE OF CONTENTS

List of Abbreviations	4
Section 1 Decision Summary	5
Section 2 Transitioning to Renewable Energy	9
2.1 Economic Regulator's Role In The Energy Transition	10
Section 3 Fit Programme Overview	12
3.1 Legislative Framework	12
Section 4 Feed-In-Tariff Design and Assumptions	15
4.1 Development of Tariffs	15
Section 5 The Determination	23
APPENDIX 1	26

List of Abbreviations

AC	Alternating Current
BLPC	Barbados Light & Power Company Limited
BNEP	Barbados National Energy Policy
COD	Commercial Operation Date
ELPA	Electric Light and Power Act, 2013–21
FCA	Fuel Clause Adjustment
FIT	Feed-in Tariff
FTCA	The Fair Trading Commission Act CAP. 326C of the Laws of Barbados (as amended)
GoB	Government of Barbados
LCOE	Levelised Cost of Energy
NDC	National Determined Contributions
PPA	Power Purchase Agreement
PV	Photovoltaic
RE	Renewable Energy
REC	Renewable Energy Credit
The Commission	The Fair Trading Commission
URA	The Utilities Regulation Act CAP. 282 (as amended)

Section 1 Decision Summary

The GoB through the BNEP has set a course for 100% RE by 2030. The Commission has established FIT programmes as the vehicle through which participants can invest in the local RE sector. The FIT programme that has been applied to the procurement of energy capacity under 1MW is especially beneficial to residential homeowners and small commercial enterprises, facilitating the maximisation of local participation. The FIT programme for RE systems sized up to 1MW, for land-based wind, solar, anerobic digestion and solid biomass expire on December 31, 2022. In order to ensure that the renewable energy sector continues to grow towards its 2030 target of 100% RE set out in the BNEP, a review of these rates is required. The FIT is a stable pricing framework, which continues to give the investors positive signals to encourage investment, while encouraging smaller investors to see the benefit of the sector.

Following is the Commission's determination made for RE systems sized up to 1 MW.

• I The effective start date for the FIT programme shall be January 1, 2023 (“2023 FIT Programme”). The 2023 FIT programme shall continue until December 31, 2025 and thereafter be reviewed annually or on the expiration of existing capacity, whichever comes first. New rates shall be announced three (3) months prior to the expiration of this programme.

• II The FIT shall be based on a twenty (20) year fixed tariff with no front loading, differentiated by technology and size. The tariff is based on the LCOE, using a multi-criteria approach according to the guidelines espoused in the BNEP.

  FIT Policy Design

  FIT Policy Element	RE Systems = 1 MW
  Proposed Effective Date	2023-01-01
  Rate: Fixed, Tiered or Variable Options	Fixed
  Rate: Differentiated by Technology & Size	Yes
  Tariff Duration	20 years
  Administratively-Determined or Competitively-Bid	Administratively-Determined
  Presumed Off-taker	The BLPC
  Quantity Covered by FIT	100% of output
  Periodic Review of Rates and MW Allocation	36 months initially, thereafter, annually.

  FITs Differentiated by Technology and Size (Up to and including 1MW)

  Technology Category	Size Category
  Solar	up to 10 kW
  Solar	> 10 kW to 100 kW
  Solar	> 100 kW to 250 kW
  Solar	> 250 kW to 500 kW
  Solar	> 500 kW to 1 MW
  Land-Based Wind	up to 10 kW
  Land-Based Wind	> 10 kW to 1 MW

• III The applicable categories, rates and capacity allocation shall be as outlined below:

  Technology, Size Category	FIT (Bb cents/KWh)	Total Allocation (MW)
  Solar, Up to 10 kW	34.25
  Solar, >10 to 100 kW	35.75
  Solar, > 100 to 250 kW	34.75
  Solar, >250 kW to 500 kW	39.75
  Solar, >500 KW to 1 MW	34.25
  Total Solar Allocation		27.6
  Land-Based wind, up to 10 KW	36.75
  Land-based Wind, >10 KW to 1 MW	45.75
  Total Wind Allocation		5
  Total Allocation		32.6

• IV Capacity shall be allocated on a first come first served basis.

• V The total MW to be allocated to the 2023 FIT programme is 32.6 MW.

• VI Under the 2023 FIT programme, systems of 3kW or less shall utilize the “sale of excess” billing arrangement at the appropriate rate, while those of 3kW and above up to 1MW shall use the “buy all sell all” mechanism.

• VII A multiplier of 10% in the 2023 FIT programme shall apply to all community – shared RE projects. The criteria for community – shared RE projects shall be: 1) a minimum of fifteen (15) residential customer investors, 2) no single entity owning more than 50% of a single project.

• VIII All terms shall remain constant for the duration of the 20—year contract. New or revised terms, conditions and tariff prices shall only be applicable to new projects entering the market in future programme years.

• IX The FIT includes the purchase by the BLPC of all present and future commodities and/or environmental attributes generated by the project — including energy capacity, RECs or other commodities that may exist now or in the future. All rights, titles and interests in RECs shall be affirmatively purchased as part of the FIT and retained/retired on behalf of the Commission or other government agency so assigned. All RECs accrued from FIT projects shall be retained/retired and counted toward the 100% by 2030 goal, as is deemed appropriate. Further, the resale of RECs by the BLPC to fulfill any other claims or commitments, or for financial gain in international markets is not allowed.

Section 2 Transitioning to Renewable Energy

The GoB continues to demonstrate its commitment towards exploiting the applicable indigenous energy resources potential as it envisions a near net-zero carbon neutral economy. The utilisation of FIT programmes has been adopted as a key driver towards the expansion of the RE1 sector. Consequently, this policy initiative is expected to contribute to the GoB's NDC targets2, realise energy independence, predominant RE production and consumption, and economic development for Barbados.

On September 24, 2019 the Commission issued its first Decision on FITs for RE technologies up to and including 1 MW (2019 FIT Decision). By this 2019 FIT Decision, FITs became effective October 1, 2019 until December 31, 2021.

The Commission, cognisant of the economic impact of the prevailing COVID-19 pandemic prior to December 2021 on existing and future price movements of RE technologies, issued a proposal to the public on December 21, 2021 to extend the 2019 FIT Decision until June 30, 2022. Having received no objections from the public, the Decision was extended as proposed. This extended period was considered reasonable to observe the stability of prices for RE technologies and their associated logistics costs so that a determination could be made on how future rates should be treated. Notably, price movements associated with RE technologies remained sluggish despite incremental contractions in prices and the instability of these prices continued. In light of this development, the Commission determined it appropriate on July 4, 2022 to further extend the 2019 FIT Decision until December 31, 2022. This additional six (6) months assisted the Commission in conducting the necessary monitoring and evaluation of RE technology prices during this period.

The Commission issued its Consultation Paper on Feed-in-Tariffs for systems under 1 MW and gave the public from November 2, 2022 to December 2, 2022 to respond.

A total of six submissions were received from the following parties by the date of closure:

• • Blackstone Megawatt Energy Services Inc.

• • Barbados Light and Power Company Limited

• • Solar Watt Systems Inc.

• • Barbados Renewable Energy Association

• • Emera Caribbean Renewables Ltd.

• • Blue Circle Energy (Barbados) Inc.

A synopsis of the responses from the aforementioned parties is presented in the attached Appendix 1.

The Commission thanks all respondents for their contributions to the Consultation.

2.1 Economic Regulator's Role In The Energy Transition

A FIT is the rate at which energy generators sell their output at a specified price for a specific duration to an off-taker. The use of FITs as it relates to design and level of rates, allows the Commission to align with the GOB's policy goals and objectives as set out in the BNEP. FITs also allow the Commission to balance its functions as a regulator with the needs of all stakeholders. Specifically, the rates consider the continued incentivisation of private investors, current economic conditions, the continued viability of the utility company and the impact of the rates on the consumer.

The economic regulator also must consider the integration of RE to the grid, ensuring that the electricity service provided is safe and reliable. Under the FTCA and the URA, the Commission is responsible for establishing principles for arriving at rates to be...