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Tough Call: Power Problems Mask Lack Of Renewable Energy Progress

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Larry Smith

By LARRY SMITH

According to the latest report from the International Energy Agency, which tracks these things, renewables and natural gas (much cleaner than other fossil fuels) are leading in the race to meet energy demand growth.

In other words, a big transformation is taking place, spurred by the Paris climate agreement.

But whether The Bahamas will benefit from these advances within a reasonable timeframe is questionable.

Government officials often refer to our high vulnerability to climate impacts, like rising sea levels and stronger storms. But we see little real leadership in moving towards a clean energy economy.

Environment Minister Ken Dorsett said recently he became involved in politics to facilitate change. “And over the last four-and-a-half years we have seen evidence of the foundational work for that change, (including) energy sector reform.” In support, he pointed to a national energy policy that was developed over successive administrations. It sets a goal of 30 per cent renewable energy use by 2030.

The policy envisions The Bahamas as a “world leader in sustainable energy”. And to its credit, the government did pass a new Electricity Act, which specifically provides for renewable energy generation and grid inter-connection. The draft law was left on the table by the previous administration and not enacted by this government until 2015. Provisions in the law for the establishment of Bahamas Power & Light (BPL) are already in effect, but the renewable energy provisions are not.

That’s because everything is on hold until the Utilities Regulation and Competition Authority (URCA) can approve plans and set up a licensing and regulatory system for the electricity sector. URCA assumed responsibility for the sector this summer. Since then it has been working with consultants until sector experts can be appointed.

The renewable energy provisions in the new Electricity Act cover self-generation by homes and businesses (using solar panels or wind turbines, for example) together with grid inter-connection and utility billing credits (known as net metering). The law also provides for utility-scale renewable energy generation, based on power purchase agreements to be negotiated between BPL and third party providers.

In fact, BPL is actually required to increase renewable energy supply in the country based on URCA-approved plans, which must be reviewed every three years. The first of those plans was submitted to URCA by BPL in May, but has yet to be finalised.

According to URCA’s chief executive, Stephen Bereaux, “the introduction of renewable energy is one of the highest priorities of the government. The need for the regulatory regime (is) critical. However, it was simply not possible to address it more quickly, with the resources available”.

“We have had to ensure that the plans are consistent with the act, that they address existing renewable installations so that investments are protected, and that they are consistent with established best practice,” Bereaux told me.

So to speed things up, URCA has decided to separate the small-scale plan, for which an outline has been in place since 2011 (when BEC first approved it), from the utility-scale plan, which Bereaux says requires a lot more work. The plan for small-scale renewable generation by consumers and businesses will be published within days, and implemented at the beginning of 2017.

This means there will be opportunities for grid-tied solar and wind generation for homes and small businesses in the first nine months of the year. After further consultation with BPL to expand these opportunities in the second phase. a third phase will form the status quo going forward. Existing systems will be grandfathered in, with the option for consumers to switch to grid-tied generation if desired.

But the large-scale plan requires more engagement with BPL before it can be approved, URCA said. Unfortunately, that translates to a significant delay for the implementation of utility-scale renewable energy. Once the pubic consultation phase ends, the plan will be finalised by URCA. Then regulations have to be brought into force, followed by a procurement process.

So if the utility-scale plan is published by mid next year, we are likely to be approaching 2020 before anything concrete can happen. This is hardly acceptable for an island nation touted as a “world leader” in sustainable energy.

Executives at BPL have talked in the past about utility-scale renewable energy (RE) projects for the out islands. But CEO Pamela Hill did not respond to my email asking to discuss BPL’s future generation mix and other issues .

BPL’s business plan calls for construction of a $600 million power plant using gas turbine generators burning propane or natural gas. But BPL (which is owned by BEC, which is owned by the government, which appointed the board) is bankrupt and can’t raise the money on its own.

The Electricity Act allows BPL to buy electricity from private investors and even contract public supply to third party providers in the out islands. And those providers can receive duty exemptions, plus other concessions as agreed.

But, as mentioned earlier, this is not expected to happen for years under current conditions. And an election is likely to interrupt the process next year, causing further delay.

As for residential and small business solar photovoltaic (PV) installations, there are already hundreds of these operating around the country - including several owned by cabinet ministers. But less costly grid-tied facilities and net metering will not be authorised until next year (they are less costly because they don’t require battery storage).

When that happens, owners will have to apply for permits to operate their RE units, grid inter-connection will have to conform to specific equipment standards, and installers will have to be appropriately qualified.

Owners who fail to apply for a permit or who operate outside the terms of the permit will commit an offence for which they can be fined.

According to Ministry of Works Permanent Secretary Colin Higgs, “Persons who have installed renewable energy systems that are in compliance with the former Electricity Act can continue to operate them until Section 27 of the new Act comes into force and necessary regulations are prescribed and other measures issued by URCA.”

Part of the subtext to all this is a proxy war between the renewable industry and the legacy fossil fuel industry, which benefits from huge subsidies and political influence worldwide. In the Bahamas, for example, there is a strong current of opinion that progress towards cleaner energy is being restrained by powerful special interests who benefit from supplying oil to fuel BEC/BPL generators.

Last year, Costa Rica powered itself purely with renewable energy for 299 days. That isn’t just due to size or location - the Costa Rican government is serious about eliminating the use of fossil fuels and is providing the leadership to achieve it.

Non-hydropower renewables are forecast to generate nine per cent of electricity generation in the United States next year. In Nevada, a 100-megawatt solar project will deliver electricity at four cents per kilowatt hour. Chile and India are experiencing similar costs.

Germany’s cumulative solar energy generation capacity reached around 37 gigawatts in 2014, or about 21 per cent of the country’s total power generation capacity. Jamaica is finalising an agreement for a 33.1 megawatt solar facility that will start supplying power in 2018 - at eight and a half cents a kilowatt hour. A $90 million wind farm was commissioned in August, providing energy at just under 13 cents per kilowatt hour. Morocco is building a huge solar farm in the North African desert, and expects to generate 14 per cent of its energy from solar power by 2020 - when we will just be getting started.

In a speech last year, Deputy Prime Minister Phillip Davis boasted that the government had created marvellous new opportunities for renewable technologies in manufacturing, project development, construction, installation, maintenance, logistics, and financial, legal and consulting services. But the handful of legitimate renewable energy installers who struggle in an unhelpful and confused environment, and the many investors who have proposed renewable energy projects over the years, probably see things differently.

The solar industry can provide lifetime technical training and high-paying jobs, one local installer told me, but the difficulties of conducting legitimate business in the sector are hard to overcome. “Two successive Prime Ministers have promoted solar to the public, but BEC has always shut it down. The people should know where the blame lies. Those of us who try to work professionally to international standards, often find ourselves swimming against the tide,” he said.

“Solar power is a mature and cost-effective technology with many benefits for the environment and the economy, yet there has been continuous obstruction and stonewalling of the process by BEC, the Ministry of Works and the government inspectors. URCA should appoint overseers with the authority to prevent civil servants from abusing the public. It’s as if the government removed all taxes on conch to promote consumption and then said only government-approved conch salad could be sold, or conch salad would only be available for government officials, or only experimental conch salad would be allowed, or only the government can decide what a conch salad is. In the meantime, our conch spoils and the conch stand goes out of business.”

As for the bigger picture of powering the national economy, the problems currently faced by BPL are the shared responsibility of successive governments - probably best illustrated by a former chairman’s unashamed admission that he did not pay his electricity bills and the conviction of a political crony for bribery relating to a generator contract.

The utility is burdened by a $400m-plus legacy debt that it can’t repay, and needs to raise hundreds of millions more to build a modern power plant. Failure to address these problems could result in a catastrophic meltdown that will shock our economy and dramatically affect our quality of life.

In the context of the Paris agreement and the ongoing transformation of global energy production, renewables must be an integral part of that Bahamian solution. And that requires genuine interest and leadership to move things forward as fast as possible.

What do you think? Send comments to lsmith@

tribunemedia.net or visit www.bahamapundit.com

Comments

alleycat 3 years, 10 months ago

Thank you Larry for spelling it all out. I live in a solar community in Abaco - no BEC available - and never understand why more people don't go this route. We have lots of sunshine all year, and no need for heating, unlike Germany or Canada. But Germany and Canada both have lots more solar power than we do.

On a personal level, our community never loses power during or after a hurricane. We never have blackouts and brownouts. We never lose appliances because of a power surge. And we never get a bill! Yes, there is an upfront investment, but once that is paid off (with the money that would have been given to BEC every month) then you have free electricity.

It's long past time this country got serious about renewable energy. Stop talking about it, just do it!

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