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Shedding light on monopolies

The days of big monopoly Barbados Light & Power Co. Ltd. seem numbered. The switching to photovoltaic energy systems is hurting their sales. Being a monopoly, the BL&P has creative ways of still assuring high profits.

The BL&P enjoyed regulated monopoly in the supply of electricity in Barbados for over 100 years, ably assisted by the government which allowed them to pass on the fuel adjustment charge to customers, irrespective of the price, and guaranteed maximum profits. This practice offers no incentive for them to introduce alternative renewable sources of energy.

There has been some discussion by BL&P about exploring alternative energy by setting up a wind energy farm in St. Lucy, but that project never came into fruition, and there is no sign that it will get off the ground anytime soon.

This is a classic example of how a monopoly operates – profit maximization and slow to introduce new technologies and methodologies. The BL&P should have been the pioneers of renewable energy systems in Barbados. The Company has the resources (technical and financial) and leverage, and would be able to take advantage of economies of scale for the overall benefit of Barbadians.

For as long as BL&P remains a legal monopoly, the welfare of the entire country would be dependent on them for the supply of electricity. It is for this reason that Government, in addition to providing the incentives for renewable energy systems, must move swiftly in passing legislation, allowing the private sector to sell back into the national grid, rather than by just amicable cooperation.

-Carl Harper

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