By NEIL HARTNELL
Tribune Business Editor
Grand Bahama Power Company yesterday said its decision to defer new generation investment had enabled customers to escape a 4.5 per cent base rate “charge” that would have been added to their bills.
Paul Miller, the utility’s managing director, told Tribune Business that its newly-approved three-year rate structure, coupled with planned renewable energy initiatives, had allowed GB Power to hold off on adding more generation capacity.
He disclosed to this newspaper that he planned to “go to the Board in early February” 2016 to seek approval for GB Power’s proposed 3-4 Mega Watt (MW) solar farm, the first utility-scale investment of its kind in the Bahamas.
The planned solar farm will likely be based in Freeport’s industrial area, and Mr Miller explained that its development - together with another renewable initiatives, such as the replacement of all street lights with Light Emitting Diode (LED) bulbs - was key to the generation investment deferral.
Apart from the savings realised by less reliance on fossil fuel generation, Mr Miller said GB Power’s renewable energy plans were also designed to reduce its “spinning reserves” and reliance on existing generation turbines.
He added that if all these initiatives, together with a proposed energy storage initiative, succeeded, the energy monopoly would be able to take a full generation unit off-line.
“We can tie all these initiatives to ultimately being able to defer future generation investment, which is ultimately what saves the customer additional money, as we have not included that in our rate plan,” Mr Miller told Tribune Business.
“If we had included that, we know with certainty that would have represented a 4.5 per cent base rate charge. We’ve been able to avoid that, and take that out of the rates.
“That’s money on the table, through the renewable energy initiatives, and that is critical to what we are trying to accomplish in Grand Bahama.”
Mr Miller added that a new generation unit would represent a $14 million investment, should GB Power have been required to invest in one between now and 2018.
He said the Grand Bahama Port Authority’s (GBPA) approval of the new rate structure, which takes effect from February 1, 2016, represented “an endorsement for us to proceed” with its focus on renewable energy initiatives.
The LED street light replacement will “start immediately”, Mr Miller said, following receipt of the GBPA’s approval, with around 10,000 new lights set to be installed between now and the end of 2016.
The replacement exercise will reduce GB Power’s fuel consumption, and enable the utility to run its diesel engines less, given that LED lights consume 60-70 per cent less energy than normal street lights.
They also enjoy a failure rate of less than 1 per cent, and are designed to last 12-20 years, compared to the four-five year lifespan enjoyed by regular lights.
Mr Miller said the next step would involve development of GB Power’s proposed utility-scale solar farm.
“Although we have [GBPA] approvals to our name, we have internal processes to go through, and need Board approval for our utility-scale investment in solar,” he told Tribune Business. “I hope to go to the Board in early February.”
Implying that GB Power management were now applying the ‘finishing touches’ to their solar farm proposal, Mr Miller confirmed it would be the first utility-scale venture of its kind in both Grand Bahama and the Bahamas.
He added that it would be the second such facility in the Ameri-Caribbean region, given that Barbados had already begun construction on its own solar farm.
“This initial one will probably be located down in the industrial area,” Mr Miller said of the solar farm proposal.
“We’ve got two-three options, and we will be working with stakeholders to determine what option is best for us and them. No final decision has been made on it. It’s something we’re working towards over the next two to three months.”
GB Power’s plans will likely provide some encouragement for both Bahamian households and the private sector, who have been eagerly awaiting movement on renewable energy adoption by this nation’s utility providers.
Apart from offering cleaner, and more environmentally friendly, forms of energy, renewable/alternative energy sources also offer the prospect of lower electricity costs, better energy security, and a reduction in fossil fuel uses/foreign exchange leakage.
Mr Miller said GB Power had completed its “solar profile”, and had been working since May 2015 to predict how much energy might be produced from its solar farm.
“If we get this off the ground, it allows is to validate our assumptions, validate the kilowatt hour savings, and positions us for what comes next,” he said, “the establishment of an energy storage facility.”
Tribune Business previously revealed that GB Power was seeking energy storage technology that is “maybe unique to the world”, in a move intended to reduce operating time for at least two generation units.
The timing of peak electricity demand on Grand Bahama creates a problem for the utility when it comes to maximising solar efficiency, as this typically occurred between 8pm-9.30pm at night.
This is why GB Power is turning its focus to procuring technology that could store solar energy produced during the day for use during night-time peak demand.
“We’re still validating the data we use in our model,” Mr Miller said of the energy storage initiative. “It’s complex data given the nature of our customers.
“We absolutely need to make sure that the strategy is 100 per cent correct, or otherwise we will have to go through that process again, and we don’t want to put the vendors through that.”
Mr Miller said GB Power would likely launch an ‘expression of interest’ process in a bid to both attract vendor interest and “narrow down the technology” that was best suited for Grand Bahama.
Once this was completed, only then would GB Power initiate a Request for Proposal (RFP) to select a preferred bidder.
“It has to be economically viable for this to work,” Mr Miller told Tribune Business. “It allows us to reduce our spinning reserves at our generation facility.”
He likened the ‘spinning reserves’ to a car idling at the traffic lights, as it was burning gasoline until the signal changed to ‘green’.
GB Power’s generation units had to do similar, he explained, as they sometimes had to sit idle, burning fuel, and then suddenly ‘ramp up’ when Freeport’s large industrial concerns needed “a large drawdown quickly”.
“There’s a cost associated with providing power to the industrials,” Mr Miller said. “The storage facility will allow us to reduce the spinning and idling, which means less fuel consumption.
“That’s the most significant reduction. We feel that if we can pull this off, we can take one full engine off line, if the storage facility is designed correctly.”