The granting of a rate adjustment does not remove the Company’s responsibility and discretion to modify its investment plan in the interest of customers, given its assessment of changes in its external environment. The Plan is not conclusive, as socio-economic, commercial and industry developments might call for modifications after submission.

In 2009, Light & Power had intended to invest in new plant by 2012, however, with a rapidly changing business environment and a global and national thrust towards renewable energy, Light & Power felt it prudent to delay the retirement of its steam plant and its planned installation of new fossil fuel plant in 2012.

The delay gave Light & Power the opportunity to develop a more informed investment plan in response to the new business environment.

Between 2012 and 2014, Light & Power, in consultation with various stakeholders developed an Integrated Resource Plan (IRP), and on April 7, 2014, the FTC advised that it was satisfied with the approach and the assumptions made in preparing the IRP. An IRP is an assessment of future electric needs and a plan to meet those future needs integrating both demand and supply side options. An IRP also presents various scenarios with an option to choose the least cost or preferred plan based on an analysis of multiple criteria.
Light & Power’s IRP considered the Government of Barbados’ (GoB's) plan to introduce up to 60 MW of combined waste-to-energy and biomass generation between 2016 and 2018.

These announcements from the GoB coupled with a signed PPA between a project developer and the government for 35MW of renewable capacity, along with changes to the GoB's licensing regime, low sales growth projections, the new Electric Light & Power Act (ELPA) and anticipated reforms in the electricity market structure created uncertainty in Barbados’ energy environment. As a result, Light & Power felt it prudent to further delay investments in new fossil fuel plant and to extend the life of its steam plant to avoid the possibility of stranded assets.

In the intervening period, Light & Power instead invested significantly in facilitating the integration of renewable energy generation to the Grid. This included its own investments in a 10MW solar farm (commissioned during 2016) and to help facilitate the Renewable Energy (RE) transition, the Company embarked on and completed an island-wide installation of smart meters as part of its grid modernization program. Investments in strengthening of the transmission and distribution infrastructure, along with other investments in technology and key customer initiatives, continues.

When Light & Power recognized that investor-driven plans to commission up to 60MW of firm renewable capacity were not likely to occur and that as a nation we were still some ways off from achieving higher penetration of renewable energy necessary to satisfy the island’s energy needs, the Company advanced plans once again to install new fossil fuel generating capacity.

Light & Power recognized that to maintain adequate system reliability and resilience during the transition, there was an immediate and urgent need for additional fossil fuel generating capacity. At this stage, Light & Power not only conceived, designed and has now constructed the 33MW Clean Energy Bridge generating plant at Trents, St. Lucy, it also advanced plans for new solar and wind RE builds at Lower Estate and Lamberts and advised of the need to install utility scale storage or batteries in light of the continuously growing RE installations.

However, Light & Power was only given approval to move forward to build this new plant after significant resistance by some key stakeholders and after a significant period of planning and delays in obtaining permissions to replace firm capacity. To date, Light & Power has not been able to attain approval to move forward with its RE investments which align with Government policy and would help facilitate reaching the 2030 policy goals.

Decisions to modify its investment plans and delay the retirement of the steam were made with the full knowledge of Light & Power’s regulator, the Fair Trading Commission (FTC). Light & Power’s investment decisions were and continue to be made in the best interest of customers and in consultation with key stakeholders.

Light & Power notes the commentary of its regulator, the FTC below in its March 25, 2022 Decision on the Light & Power’s Depreciation Policy Application where the FTC acknowledges the prudency and reasonableness of the Company’s decision: 

“The Commission acknowledges the concerns of the Intervenor and the Applicant's rationale of their decision. The Commission was made aware of the government's intention to install the waste-to-energy and biomass plants. Additionally, policy changes by the government in the form of the development of the BNEP 2019-2030 by the Ministry of Energy was part of the considerations of the BLPC in its decision making
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Given the transition that the electricity market has been seeing over the period 2010 to present, a decision to retire steam units and replace them by other fossil fuel plant could potentially result in the creation of stranded assets, that is, assets that are still used and useful, but that need to be retired earlier than at the end of their useful life. In that the assets would have been determined to be prudently incurred, the recovery of those costs would still need to be borne by the Barbados consumer and therefore will result in increased cost to the consumer.

For this reason, the Commission therefore recognised the conclusion by the Applicant to defer its decision to remove aged infrastructure from generation as a reasonable one.”

The decision to continue utilization of the steam plant was entirely consistent with the technical capacity of such generators, often operated for 50 years with appropriate life extension measures. The approach to extend the life of the steam generators was aimed at keeping costs down for customers while the island transitions ambitiously to 100% RE.

We are still several years away from achieving electricity from 100% renewable energy and given the need to maintain adequate system reliability and resilience during the RE transition, Light & Power has invested in 33MW of additional fossil fuel generating capacity, referred to as the Clean Energy Bridge, that is expected to be in operation later this month at its generating plant at Trents, St. Lucy.