A real green energy policy, please

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Yes! We are going to talk about renewable energy once again; simply because it is such an important issue for a country such as ours. One which suffers from the high cost of electricity and one at risk of climate change. Plus, the topic came to the fore during a recent Cabinet briefing, in which Minister of Information Melford Nicholas indicated that the Cabinet has promised to review the Antigua Public Utilities Authority’s (APUA’s) unpopular net billing policy. However, in the same breath, the minister stated that there was no promise that the policy would be amended in the homeowner’s favour.
For everyone’s understanding, but without going into the minutiae, “net billing” is a system by which homeowners in Antigua & Barbuda are paid roughly 45 cents for the power they produce (per kilowatt) and then buy back that energy at the retail rate, or approximately $1, when the sun is not shining. Of course, this all refers to solar energy.
In dollars and cents, it works like this: produce 20 kilowatts during the day, use five kilowatts and pump 15 kilowatts into the grid. APUA pays you $6.75 for the power ($0.45 per kilowatt x 15 kilowatts).  When the sun is down and you need to use the 15 kilowatts of energy, you buy it back from APUA at a dollar, so $15. APUA pockets $8.25 for the very power you produced earlier in the day.
Rewind to a few years ago and the initial policy that was introduced was something called “net metering”. In that billing system, the units consumed (ie, kilowatts) are set off against the units produced. Using the example above, if you produce 20 kilowatts during the day, use five kilowatts and then need 15 kilowatts while the sun does not shine, then you get back your 15 kilowatts. Your electricity meter simply moves forward and backward depending on whether you are producing or consuming.
The latter system, net metering, is widely used around the world to jumpstart the adoption of renewable energy solutions. As markets mature, the policy is modified but the system usually stays in place for many years because of slow adoption.
At this point, we need to get into the weeds and understand why we are, where we are, and the negative impacts that the current system yields. Simply put, Antigua & Barbuda has bought into petroleum and the practice of burning fossil fuels for electricity generation. And even though the prime minister boasts that APUA will have a profit of $100 million, it would appear that that is not enough for a public utility. A public utility that is there to service the people. It is easy money.
Let us examine what Minister Nicholas said, knowing that the government is the majority shareholder of another cash cow, the West Indies Oil Company (WIOC) which so happens to supply the fuel used in the electricity generation plants.
Minister Nicholas said that one of the reasons that APUA could not give more savings in the past two years was that it needed to generate revenue to cover the debt which it owed to the Antigua Power Company (APC). That debt is now to be satisfied via a power purchase agreement; however, Nicholas said “… there is a certain capacity we have agreed to purchase and we cannot get away from that. That is also a fixed component that has to be considered”. Fair enough, but APUA just made $100 million dollars of profit!
The domino equation goes like this: more solar means less electricity sold; less electricity sold means less revenue and profits for APUA and less fuel purchased from WIOC; less fuel purchased from WIOC equals less revenue and profits for WIOC.
Before we continue, let us dispense of the argument that the people benefit because they own APUA and WIOC. That is not how you build an economic powerhouse. The fundamental principle to any economic powerhouse is distributed wealth – in the hands of the people – NOT the creation of a government powerhouse.
Minister Nicholas also attempted to spin the situation by hiding behind the “poor working man”. Yes, the same “poor working man” that is contributing to the $100 million profit.  In his spin, the ,inister said that if homeowners, who could afford to install solar were allowed to do so, the cost of electricity would go up for lower income homes to “maintain the entire network”. The reality is that it would only go up if APUA is intent on maintaining a $100 million profit.
Meanwhile, the government, exempt from the billing policies, continues to benefit from solar installations because the government does not pay APUA for electricity. APUA is only too glad to have them produce electricity because at least they don’t have to carry that burden.
Then there is the argument of distribution — that APUA must pay for the distribution of the solar electricity and then provide the electricity when the homeowner needs it. This is a valid argument to a point and it is generally what drives a change in policy in other countries, as the renewable energy plant matures. The reality is that there is very little “distribution” when it comes to the energy produced by the homeowner. It goes to the neighbour. It does not go back to Crabb’s to be stored for later. Physics tells us that electricity takes the path of least resistance … the shortest path. So, the solar energy produced by one homeowner is quickly distributed to the neighbours.
We have no information related to the cost of distribution in Antigua & Barbuda, but if we utilise the Independent Statistics & Analysis provided by the US Energy Information Administration (EIA), we see that the major components of the US average price of electricity in 2014 was broken down as follows: 65 per cent generation, 25 per cent distribution and 9 per cent transmission. So, in all, transmission and distribution is about 35 per cent and that takes into consideration that the cost of generation is much lower in the United States.
Obviously, this is not an apples-to-apples comparison, but it shows that there it is highly unlikely that the cost of distribution and transmission could exceed 50 per cent of the cost. We are in the infancy stage of solar adoption and the government should be enacting policies that democratise the production of energy through an aggressive green energy policy. It would be myopic for us to sacrifice our future and the future of green energy in our bit of paradise in the pursuit of greater profits at APUA. Isn’t $100 million enough?

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