The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A $102.3 million project that aimed to reduce Baha Mar’s air conditioning-related energy demand by 90 per cent has “come alive again”, Tribune Business was told yesterday.

The Cable Beach developer had placed the Seawater District Cooling (SDC) project proposed by Ocean Thermal Energy Corporation on the backburner in June 2012, after the company failed to meet timelines agreed by the two sides.

However, Robert Sands, Baha Mar’s senior vice-president of external and governmental affairs, confirmed the parties were talking again, with the developer hoping to exploit the potential “advantages” created by the SDC plant’s energy cost savings a year after the $2.6 billion resort campus opens.

“We have re-engaged in communication. That’s alive again,” Mr Sands said of the OTEC project, in response to Tribune Business inquiries.

He confirmed that the OTEC project, if it does go ahead, would be effectively ‘grandfathered’ into the Baha Mar project - meaning its construction would be factored into the design and take place after the new resorts opened.

“That is what will happen,” Mr Sands said.

“It will come on stream certainly after we open, and once that is in place, hopefully a year after we open, the advantages of that arrangement will be realised. We are encouraged by the progress they [OTEC] are making.”

OTEC executives did not return Tribune Business’s calls seeking comment, despite messages being left on the nature of the inquiries.

Baha Mar revealed to Tribune Business in June 2012 that OTEC’s failure to meet a pre-determined timetable for its $102.3 million SDC system meant it had been forced back to looking at “traditional forms” of air conditioning (AC) cooling.

This newspaper was told at the time that Baha Mar executives were concerned that delays in obtaining all the necessary government approvals for the OTEC project could prevent the SDC plant from fitting in with the $2.6 billion project’s construction schedule, throwing this off and delaying the planned December 2014 resort campus opening.

The OTEC project would involve construction of a 12,000 tonne system to provide Baha Mar’s $2.6 billion development with its air conditioning needs, via chilling capacity from deep sea water.

A previous analysis of alternatives to the SDC facility concluded that none were viable.

OTEC said that if it decided not to go ahead with the project, Baha Mar would lose the potential economic benefits resulting from a 90 per cent reduction in its air conditioning-related energy costs.

Without the SDC system, the analysis said Baha Mar would be forced back to its original plan of installing seven electricity-driven centrifugal refrigeration compressors, each weighing 1,300 tones, on its resort campus. A cooling tower would also have to be installed on the roof of its Central Utility Plant (CUP).

OTEC added that in the absence of its SDC plant and pipeline, the resort developer would need to dig six extraction and injection wells to deal with the volume of cooling water required.

And it would be forced to consume an extra 37,489 Megawatt house (MWh) of electricity, and 2.645 million gallons of oil, annually in generating the required power, something that would eat significantly into its bottom line through the extra cost burden.

The environment, OTEC said, would also suffer from the extra 71.64 million tones of carbon dioxide created annually by Baha Mar’s electricity reliance, plus the use of 25,000 pounds of refrigerants in the chillers.

“Use of the cold seawater system proposed as part of the SDC system would allow for the elimination of the seven electric compressor-driven refrigeration systems and the cooling towers from the CUP,” the OTEC assessment said.

“In addition, the SDC system would also provide cooling to the Sheraton and Wyndham resorts, allowing for the elimination of the existing compressors and cooling towers at these locations as well. OTE BM has estimated that the conventional cooling system would require 42,837 MWh of electricity per year to generate the 12,000 tons of air conditioning that the Baha Mar Resort, and the existing Sheraton and Wyndham resorts, would require.”

Further extolling the virtues of its project, OTEC added: “The use of the SDC system instead of the originally planned centrifugal compressor systems, and their associated cooling towers, would allow Baha Mar to reduce its cooling-related electrical use by almost 90 per cent. “Operation of the SDC system would avoid the purchase and consumption of 59,312 barrels (2.5 million gallons or 9.4 million litres) of oil per year, and the subsequent release of 36,408 tons of CO2 emissions each year.

“Using the SDC system would also allow Baha Mar to significantly reduce its use of the refrigerants (HFC-134a) in the conventional cooling system, reducing the impacts of associated releases of greenhouse gases during routine maintenance activities.”

OTEC had previously pledged that the construction workforce for the SDC plant would employ ‘75 per cent Bahamian labour’, accounting for 80,000 man hours.

Some $76.8 million in Inter-American Development Bank (IDB) debt financing had been lined up as the lion’s share of the SDC construction capital, with some $10.6 million being raised as equity - $5.6 million from OTEC itself, and the $5 million balance from its construction partner, DCO Energy.

Another $13 million was supposed to be raised from a preference share issue to Bahamian investors.