The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Renewable energy professionals yesterday rejected PowerSecure’s dismissal of utility-scale solar for New Providence, describing its model costs as “extraordinarily high”.

Guilden Gilbert, vice-president of Alternative Power Sources (APS) Bahamas, told Tribune Business “there is no way that a 40 Mega Watt solar photovoltaic (PV) plant would cost $140 million” as stated by Bahamas Power & Light’s (BPL) former manager. He suggested the cost was over-priced by as much as 44.3 per cent.

BPL’s business plan, as drafted by PowerSecure, had rejected such a renewable energy investment as “not economically viable” on New Providence. Besides the difficulties associated with finding 155 acres of land for the solar farm, the rejection seemed largely based on its inability to produce energy “when it is needed most” - during the evening hours between 7pm and 11pm, when the darkness coincided with peak loads.

However, this rationale was also dismissed by Philip Holdom, Alternative Power Supply’s president, who argued that the ‘peak hour production’ issue could be sold by using batteries to store solar energy generated during the day for use at night.

And Mr Gilbert blasted: “For them to say it’s not economically viable is nonsense.” He argued that financing would be available for a utility-scale solar plant provided the developer had already “locked in” a 20-25 year Power Purchase Agreement (PPA) with BPL, thereby guaranteeing an income stream to secure repayment.

“There is no way that a 40 MW PV plant would cost $140 million, and we, too, would reject any anyone who offered a plant at such price,” Mr Gilbert told Tribune Business. “If BPL offered a $0.20 per kilowatt hour (KWh) PPA for 20 years, with a small escalator, a third party would finance and provide the power.”

Joining Mr Holdom in rejecting PowerSecure’s ‘peak hour production’ reasoning, Mr Gilbert added: “This is not true in that most modern PV plants have a storage component – batteries being the most used.

“We know that when everyone gets home from work they turn on their A/C, and that the load profile does go up somewhat, but I am not sure where they get the notion that any PV plant is a ‘peak plant’. A PV plant is a renewable energy plant; it contributes to the base power during the day, and lowers the need for fossil fuels.”

PowerSecure had described its model solar plant as having annual operations and maintenance costs of $0.56 million, excluding the cost of spinning reserves. Unit costs were around $0.10 per kilowatt hour (KWh), but it added that one developer in Nassau “recently quoted $0.19 per KWh factoring in land - furthering the financial challenges”.

Mr Gilbert, though, described these figures and the $140 million up-front investment estimate as “extraordinarily high”.

“Even with the cost of bringing in the manpower, which maybe not be a necessity, importing materials, extra transport, the all-in cost including land should be around $78 million, in our estimation,” he added. “The land used should be the least desirable and usable land there is... A cost analysis versus oil consumption alone would probably justify solar.”

Mr Gilbert also branded as “unreasonably high” the PowerSecure estimate that a 40 MW solar plant would incur annualised costs of $8.6 million

Tribune Business’s revelation of PowerSecure’s findings appears to have sparked a sharp backlash from renewable energy providers, concerned that it would so readily rule-out such an environmentally, clean-energy solution for New Providence.

Mr Holdom, also co-founder of Sustainable Energy Ltd Bahamas, said: “The statement that utility scale renewable energy is not economically feasible in the Bahamas underestimates our strength to be a leader in the move toward sustainable, renewable, eco-friendly power generation.

“I would go so far as to state that it is simply false, and does not take into consideration the technology that exists today. Utility-scale renewable energy is the fastest growing energy sector in the world, and that would not be so if were not economical.”

APS and Sustainable Energy, who have a1 MW power plant approved for commercial use in Nassau, said they wanted to show the Government a utility-scale plant is economically viable and will produce substantial energy savings to Bahamians.

“The BPL management were partially correct when they concluded that utility-scale PV could not ‘produce energy when it was most needed’, because they were only viewing it as a grid tie system with no battery back-up,” said Mr Holdom.

“Any utility-scale solar plant in the Bahamas must, by necessity, have a Battery Energy Storage System (BESS), and this is no more critical anywhere than in the Bahamas due to the fact that the utility is underpowered and has been so for the past 40 years.

“The Bahamas is plagued by constant brownouts that damage all manner of sensitive electronics, including fridges, TV’s, cable boxes, computers, networks and more. This affects homes and businesses throughout the archipelago. A brownout occurs when the utility cannot provide constant voltage and frequency in peak load periods, or even as a matter of course. Without sufficient capacity, supplemental capacity is required that is available 24 hours a day.”

Mr Holdom argued that “there is no ‘silver bullet’ for solving the Bahamas’ energy woes, arguing “a mixed generation of reliable, viable and economical solutions working in conjunction with each other, instead of in opposition” was required.

“The Bahamas will be best served by decentralising the power grid, mandating the highest energy efficiency standards in homes and businesses, and modernising the highest energy users, public buildings,” he added.

“The Bahamas as a nation is just getting into renewable energy, and is three decades behind countries with one-quarter of the solar potential of this country. Therefore we need to approach solar integration immediately on large utility scales, as well as commercial and residential rooftops”.