By NATARIO McKENZIE
Tribune Business Reporter
A local renewable energy firm yesterday slammed Bahamas Power and Light's (BPL) failure to produce an acceptable Renewable Energy Plan (REP) on time as "pathetic".
Zoltan Szasz, vice president of technical sales at Bahamas Energy and Solar Supplies, told Tribune Business: "It's pathetic. That's the short of it" over BPL's failure to meet the Electricity Act's requirements. He suggested its proposed liquefied natural gas (LNG) power plant deal with Shell was a means to delay the introduction of solar into its energy mix.
The Utilities Regulation and Competition Authority (URCA), in its draft order and initial findings, said the utility monopoly had failed to meet its legal obligation to produce a Renewable Energy Plan (REP), featuring timetables and performance benchmarks, within six months of the Act taking effect.
While BPL did submit an REP on April 28, 2016, URCA said this failed to meet the Electricity Act's requirements. It is alleging that the state-owned monopoly has subsequently failed to remedy these deficiencies, which has also left it in breach of its licence obligations as well as the Act.
Mr Szasz said the National Energy Policy sets a goal of 30 per cent renewable energy use by 2030. "They put PowerSecure in charge of BPL that came up with the best ideas ever, but the Government did nothing to put the necessary framework in place to make solar happen," he lamented.
"Although they established URCA, it didn't have necessary powers to force the utility to make structural changes and adapt to distributed generation. In fact BPL, being a vertical monopoly, continued to operate as if no changes were necessary. In the meantime, jurisdictions leading the renewable revolution like Hawaii implemented an aggressive integration since 2008, and set the goal to be 100 per cent off fossil fuels by 2045."
Mr Szasz continued: "BPL is delaying and diffusing the integration of solar to continue its vertical structure by the future LNG power plant. It is hoping to generate most of its base load from the new power plant and, with the implementation of automated meter reading, it is hoping to introduce "time-of-use" tariffs enabling higher charges for peak hours.
"BPL's structure at the moment is based on the 'cost of service' model, except that its costs are way over what it can cash in for its service, and has thus piled up hundreds of millions in debt."
URCA said "more than 27 months have elapsed" since the Electricity Act 2015 took effect, and expressed concern that BPL's continued delay was jeopardising the National Energy Policy (NEP) goal of generating 30 per cent of this country's energy needs from renewable sources by 2030.
It added that BPL's failure to produce an acceptable REP was also delaying plans "by several commercial entities" to introduce renewable self-generation projects that will generate between one Mega Watt (MW) to 2.5 MW of energy, with any excess sold to the utility's grid. With only Small Scale Residential Generation (SSRG) of up to 100 kilowatts currently permitted, such projects - as well as utility-scale renewable generation - fall into a "hole" outside the existing legal and regulatory regime.
Mr Szasz said that managing a utility's load profile, where variable power sources supply the grid, is a big challenge. "This grid now has to be 'smart' to handle the continuous interaction by intermittent loads and generation, and completely new technologies are needed to automate this process," he said.
"The solution is automation and storage. Automation splits up the grid to smaller segments, and constantly communicates telemetry data to route power. Storage is applied either as a dispatchable load when there is too much power in the system, or a very fast source of power when there is a shortage.
"To adapt to this technology BPL must become an 'air traffic controller' for power, must adopt to micro and smart grid technology on the smaller islands, and on the substation level in New Providence. For this BPL needs a whole new set of expertise, namely IT specialists who can implement and operate a smart grid infrastructure."
Mr Szasz added: "The ownership structure must also change from the Government to private operators that can much faster adapt to new technologies at an affordable price. Still, the transformation to micro and smart grid will be just as costly as building a new power plant, if not costlier.
"To achieve this the Government must be far more creative to force deep-cutting structural changes in both operational and management standards. Smaller islands should be sold to developers who can transform those small grids to smart microgrids and community ownership on a non-profit basis."
As to this nation's renewable energy goals, Mr Szasz said: "It's clear that given the load profile of the nation we need to integrate about 80 MW capacity. We have 12 years to do this, which means 6.6 MW a year. If we continue at this pace we will continue to get behind and, honestly, I don't see where the structures to implement this are.
"First of all, in New Providence this capacity should mostly come out of roof-top solar since there are not many land areas suitable. The regulator must decouple generation from transmission and distribution to establish a wholesale price of electricity, which will also be derived from the pricing of energy from the new power plant Shell is putting in place.
"Who knows what the price of power will be from a generation site that will be first operational in three years, and who knows what the price of LNG will be then? My assessment is that the total cost of building the LNG facility and power plant will run into $400-500m. I have no idea how the cost of electricity could be ten cents per kWh with these kind of investment figures? We must immediately force a price formation by applying BPL's current cost of generation to establish a wholesale price and we have no time to lose."