By NEIL HARTNELL
Tribune Business Editor
A Bahamian provider has “high hopes” that a $600 million waste-to-energy plant will deliver the solutions this nation requires, while again expressing concerns that the Government had been less than transparent.
Ginny McKinney, Waste Not’s principal, told Tribune Business that “as a Bahamian I’d be extremely happy” if Stellar Waste-to-Energy delivered on its twin promises of lower energy costs and remediation of the New Providence landfill.
Yet, as with the separate landfill management contract that the Christie administration has agreed with Renew Bahamas, Ms McKinney said Stellar’s signed Letter of Intent (LOI) with the Ministry of Works had generated “the same undercover kind of feeling”.
She implied that the Government had effectively reneged on a promise to issue a public tender for waste-to-energy plant bids, which was given to the consortium of Bahamian waste service providers that Waste Not was part of.
And the Government’s decision to sign an LOI with Stellar, while not a ‘done deal’, raises numerous questions about its energy sector plans. The move raises issues about both the Bahamas Electricity Corporation (BEC) restructuring and renewable energy policy; its ultimate aims for the landfill; and whether the Ministry of Works and Ministry of the Environment are pulling in the same direction.
And the Government’s seeming decision not to put waste-to-energy out to public tender, apart from denying it the opportunity to see if better bids exist, revives the ‘lack of transparency’ concerns raised in the US’s controversial Investment Climate report on the Bahamas.
Indeed, the most transparent person in this process has been Stellar’s chief executive, Dr Fabrizio Zanaboni. He disclosed his plans, and 12-14 month talks with the Government, in an interview with Tribune Business that was published on November 21, 2013.
Dr Zanaboni revealed then much of the details now contained in the ‘agreement in principle’ with the Ministry of Works, namely that the proposed plant would involve a $500-$600 million investment. It would also create 2,000 construction jobs over the 18-month build-out timeframe, and 450-500 permanent jobs.
Separating Stellar Waste-To-Energy from concerns over how the Government has handled the process, Ms McKinney said Dr Zanaboni had been “consistent” with the details of his proposal.
“I know nothing negative about them,” she added of Stellar. “I hope it is good and they can prove it. I have high hopes, and hope it’s good.
“As far as we’re concerned, if this real, true and they can deliver, just as a Bahamian I’d be extremely happy for it. But we have to see the numbers crunched, have to understand the waste, and we have to have Bahamian ownership in whatever flies. If they can deliver what they’re saying, we can all be very happy.”
Dr Zanaboni last November said Stellar had been having discussions on its proposal with the “highest levels” of government, including Prime Minister Perry Christie and the Energy Task Force, over a 14-15 month period.
The company, which is registered in the Bahamas and has offices in Nassau, had contracted APP Tetronics, a waste-to-energy plasma technology specialist, and intended to fund a $200,000 waste analysis study of the New Providence landfill.
This study, to be conducted by APP, was to analyse the waste composition at the landfill and examine the possibility of building a 50-80 megawatt (MW) plasma plant. Some 1,500 metric tons of solid waste per day would be needed to generate this amount of electricity.
This, again, is the same proposal contained in the Letter of Intent. This agreement, while an important step, does not mean the Stellar proposal is guaranteed to happen, as this will be contingent on numerous other conditions being fulfilled.
Ms McKinney suggested the outstanding studies references by the Letter of Intent would focus on determining the volume and content of the landfill’s waste streams, and how much energy could be derived from them.
“The only reservation I have is it did seem a large investment for that amount of waste,” Ms McKinney told Tribune Business of the Stellar waste-to-energy proposal.
“It’s much larger than our investment, which was around $120 million, and we were only looking at 17 Mega Watts (MW) that we could get for power using a fluoridised bed.
“If they can get that much energy out of it, fantastic. We were more conservative; way more conservative. If they can produce that amount of energy, that’s way more than we can produce.”
Stellar, though, is planning to employ plasma technology in a dual gasification process to convert waste into energy. And Ms McKinney said the $2.6 billion Baha Mar expansion might provide the waste volumes it is seeking.
Waste Not, together with Bahamas Waste, Impact and United Sanitation, had formed the Bahamas Renewable Energy Resources (BRER) consortium, which had submitted its own landfill management solution to the Government together with a waste-to-energy plant proposal.
The consortium, and at least four other groups, did similar without the Government issuing a formal Request for Proposal (RFP) and tender to specify what it wanted. And Ms McKinney suggested that Stellar had merely done the same thing.
“When there’s a window, you just try to fill it,” she said. Ms McKinney said the proposed $0.20 per kilowatt (KWh) price that Stellar will sell its electricity to BEC at was the same as the BRER consortium’s.
But again, lamenting the Government’s failure to follow through on pledges to stage an open waste-to-energy RFP, Ms McKinney said: “We were obviously not the chosen ones.
“I don’t know what to say. It’s all the same kind of undercover kind of feel. They [the Government] said there was going to be Renew Bahamas, and then there was going to be a tender process for waste-to-energy and we could put in a bid again when it got there.”
The BRER group’s inclusion of a waste-to-energy plant in its landfill management proposal was cited by the Government as the reason for its rejection, the Christie administration saying it did not want to move that far yet. Yet it has seemingly done just that with Stellar.
“I also feel as if governments feel it’s their country,” Ms McKinney added. “They move the goalposts all the time, and we have to scurry around trying to fulfill what we can fulfill.
“It’s strange. Maybe if we knew the full story, we’d say: ‘Oh, that makes sense’. What a tangled web we weave.”
Ms McKinney also questioned how any deal with Stellar would work alongside the contract given to Renew Bahamas for landfill remediation and to study waste streams.
Renew Bahamas is also constructing a recycled materials manufacturing facility, aiming to make finished products from landfill waste. That venture, as previously revealed by Tribune Business, is designed to generate $10 million in annual profits, split equally between the Government and the company.
It thus appears possible that Renew Bahamas and Stellar might be in direct competition for the landfill’s waste streams. Ms McKinney queried whether Renew Bahamas, as the landfill manager, would sell refuse-derived fuel to Stellar - a move that would work against the ultimate goal of reducing electricity prices.
Dr Zanaboni’s previous comments to Tribune Business also raise questions over whether Stellar would be able to work with Renew Bahamas, as he describes his proposal as superior.
“We made them aware that our proposal, in many ways, is even more beneficial because we can do what they do and much more, because we can immediately implement waste-to-energy,” Dr Zanaboni said of the Government.
“It’s up to the Government on what they want to do. The Government is fully aware now of the advantage of our proposal and it’s up to them to see if they want to integrate our proposal with RENEW Bahamas.
“We can produce an integration and level of sophistication I don’t think RENEW Bahamas would be able to provide.”
The Waste Not principal also raised the question of whether the Stellar LOI was intended “to cover their [the Government’s] backs”, and “take the load of” whoever won the bid to manage and overhaul BEC’s power generation assets.
Indeed, the Stellar agreement does play into a narrative that Tribune Business is increasingly hearing - that the Government may give Carolina-based Power Secure a management contract for BEC’s transmission and distribution business, but shy away from the part-privatisation of the power plants/generation side.
A waste-to-energy contract with Stellar, apart from promising reduced prices, could be a ‘Plan B’ option if the Government decides not to go through with the generation privatisation. It would help to ease the burden on the ageing Blue Hills and Clifton Pier power plants.
Yet the LOI also goes against the Government’s previous policy pronouncements, namely that it would not look at renewable energy - and multiple such proposals previously submitted to it - until the BEC restructuring process was completed.
It is also interesting that Stellar appears to have been negotiating with the Ministry of Works, headed by Deputy Prime Minister Philip Davis and parliamentary secretary, Renward Wells.
While they have ministerial responsibility for BEC, it is the Ministry of the Environment and Kenred Dorsett who have the same for both renewable energy and the landfill. The Stellar deal thus raises questions of whether both ministries, and their respective ministers, are on the same page when it comes to these issues.
Tribune Business was unable to obtain the answers to these questions, as all three politicians did not return Tribune Business messages seeking comment.