BUSINESS MONDAY: REGION PAYING HIGH PRICE FOR ELECTRICITY

PRESIDENT of the Barbados-based Caribbean Development Bank (CDB) Dr. Gene Leon says the price of electricity in the region is among the highest in the world.

Speaking at an Energy Forum in the Turks and Caicos Islands, the CDB President said that the cost of electricity in the region averaged US$0.28 per kilowatt hour in 2019.

Against this background, he called for encouraging and incentivising the private sector to support the transition to sustainable energy.

His comments come at a time when Barbadians are voicing concerns that electricity rates in the island could go up, following an application by the Barbados Light and Power Company Limited to the Fair Trading Commission (FTC) for a rate increase.

“The high cost of electricity generation has a negative impact on the region’s economic and social development as it increases import bills, worsens terms of trade, erodes competitiveness, and stymies investment by the business community,” the CDB official told the function in the Turks and Caicos islands.

He remarked further that high electricity costs also affect economically disadvantaged people who spend a greater share of their disposal income on energy.

Barbados and other Caribbean governments have been pushing to make atransformation to renewable energy to lower electricity costs while making economic sectors more competitive.

The CDB President highlighted that although alternative forms of energy – especially solar, wind, and ocean resources – are in unlimited supply in the region, the Caribbean is one of the most energy import-dependent regions in the world, with CDB’s 19 Borrowing Member States deriving more than 90 per cent of their commercial energy supply from imported petroleum.

To make the transition to sustainable energy a reality, the CDB President laid out five priorities for the way forward, which are: improving energy efficiency, diversifying energy sources, incentivising the private sector, investing in strategic partnerships, and using innovative, flexible, and affordable financing instruments.

Citing a study by the CDB and the Inter-American Development Bank, which established that renewable energy could generate 50 to 100 times peak domestic electricity demand, Dr. Leon emphasised that the region needs to diversify its energy sources.

“In the Eastern Caribbean, the geothermal energy resource potential far exceeds domestic demand. There are also emerging opportunities for using renewable energy to produce ammonia and green hydrogen, which could be a key fuel of the future,” he added.