Using more renewable sources in the total energy mix can be the best way to avoid volatility in electricity prices said Roger Blackman CEO of Barbados Light and Power. Price spikes and drops are caused primarily by the change in the price of oil, the fuel which most Caribbean islands rely on for energy.
Barbados has a fuel clause in place to help mitigate the constant change in prices, which has helped bring certain stability to the market. This policy was thought to protect both businesses and to avoid utility having to go to the regulator regularly (whenever the price of oil changes). The Barbados government has tried to set up financial hedges, though unsuccessfully. In the end, Roger Blackman continued, the best long-term solution for this challenge is to increase the use of renewable sources.
