Keeping the lights on across Barbados comes at a significant cost, with Barbados Light & Power Company Limited (BLPC) spending about $700 000 every month for rental of the 11 megawatts (MW) generation units.
That monthly cost is expected to rise to about $900 000 when an additional six megawatts of temporary generation is installed later this year, following approval by the Fair Trading Commission (FTC) for the utility to recover the associated fuel expenses through the Fuel Clause Adjustment.
The addition of the six megawatts will increase costs to the customer by about 0.04 cents per kilowatt-hour. For a customer using 1 000 kilowatt-hours of electricity per month, that translates to roughly $1.25.
However, BLPC officials say the investment is necessary as electricity demand is expected to increase in the coming years due to major tourism and commercial developments, increased use of air conditioning in homes and a growing number of electric vehicles on the nation’s roads.
Speaking Wednesday during an exclusive tour of the company’s headquarters at The Garrison, St Michael, where the units are housed, BLPC vice-president of operations Johann Greaves said the additional generating capacity was critical to ensuring a reliable electricity supply.
“Presently, we are in the region of 23 or so per cent in terms of reserve so there is need for additional generation reserves going forward,” Greaves said.
“We need to have about 38 per cent reserve for the network based on the fact that we are an island environment and therefore not connected into another grid,” he said.
“Right now, the island as a whole uses somewhere in the region of 120 megawatts. That is the peak demand on a daily basis. All of that is not supplied by Light & Power. There is about, on average, 65 megawatts that’s supplied from the solar and wind systems,” he said.
The utility expects demand growth to accelerate.
“We are seeing very, very minor increases in demand presently but we expect that this will pick up over the next few months,” Greaves said.
“There is a lot of construction going on in the island with the number of hotels, residences, commercial buildings and we are aware of most of them. We are putting measures in place to be able to supply all of them, to be able to connect them to the grid. That is why the additional generation is also very important.”
BLPC manager of regulatory affairs Dr Adrian Carter said the company was also seeing changes in how consumers used electricity.
“We are seeing that a lot of householders are now utilising their AC to beat the heat. The heat was really in 2024 but they have gotten so accustomed to those ACs that they continue to use those ACs. We are seeing a lot more households now utilising electric vehicles and powering their cars from their homes, so that is also driving some demand,” Carter said.
While customers will ultimately contribute towards the cost of the additional reserve generators through the Fuel Clause Adjustment, BLPC officials stressed that the impact on bills would be minimal.
The utility also noted that the temporary generators were currently helping to keep costs lower than they otherwise would be because of the type of fuel being used.
Greaves explained that fuel selection was based on whichever option was cheapest for customers at a given time.
“Based on the cost of diesel compared to the cost of the aviation fuel right now, the diesel is actually cheaper than the aviation fuel. So we are running these in preference to the gas turbines.
“If we were running the gas turbines, the overall cost of electricity would be higher than running these right now”.
He said BLPC followed a hierarchy of fuel use designed to minimise electricity costs.
“So we use heavy fuel oil; it’s still the cheapest. And then after heavy fuel oil, we’ll use the diesel and we use the aviation fuel last.”
The price of aviation fuel is directly linked to international market fluctuations, while diesel prices are influenced by Government pricing policies.
“We look at the two of them, what the Government is charging for diesel and what the world price is at this point. At this point, diesel is the most cost effective,” Greaves said.
Carter stressed that unlike most businesses, BLPC could not simply raise prices when operating costs increased.
“Whenever we need to do an adjustment, we would have to go to the regulator and seek permission,” he said.
He said the company had not received a full rate increase since 2010, apart from an interim adjustment approved in 2022. (NS/SC)
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