The rising cost of fuel because of the Russian invasion of Ukraine has prompted the local power company, Lucelec, to warn customers of rising electricity bills.
The local pricing structure of electricity allows Lucelec to pass on the rising cost of fuel, used in the generation of electricity, to the customer. In other words, Lucelec’s customers are not shielded from the rising cost of fuel on the international market.
The rising fuel prices have strengthened calls in some quarters for Lucelec to transition into renewable energy as a replacement to fossil fuel, in Lucelec’s case diesel. While there is a need to transition to renewable sources of energy to reduce Saint Lucia’s carbon footprint, the power company’s renewable energy initiatives to date have had little impact on the price of generating electricity.
In 2018, Lucelec opened a 3MW solar farm in La Tourney, Vieux-Fort.
The solar farm has been able to meet about 5% of the island’s electricity demand and has reduced the volume of fuel purchased by about 300,000 gallons per year, a very small amount when compared to Lucelec’s annual fuel consumption of 20 million gallons.
LUCELEC is now in the process of developing a 10 MW solar farm with battery storage on the East Coast, to be completed around 2024. This is estimated to cost about $85 million and should be able to power about 6000 households.
While Solar plants will create savings in fuel use they are not enough to offset the amortized capital cost of those plants and the fuel savings, in any case, remain relatively too small.
Communications Officer Carmy Joseph, who announced the impending monthly increases in electricity bills tempered customer expectations, saying existing solar plants would not be able to offset rising fuel costs, and they would be expecting too much so early.
She reminded consumers that “the amount of fuel saved by the solar farm is only about 1.7% of the fuel LUCELEC consumes annually.
It looks like it will be some time before solar energy will be able to reduce the price of electricity to the consumer. The changes to renewable energy by Lucelec, nonetheless, are welcomed if only for meeting the country’s climate change commitments.