The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Bahamas needs “serious money” to reverse a “less than mediocre” renewable energy performance that has been “trumpted as ‘big strides’”, an industry executive is arguing.

Zoltan Szasz, vice-president of the Sustainable Energy Association of The Bahamas (SEAB), called for revisions to the Electricity Act to reflect the opportunities renewable energy integration can bring to this nation.

He told Tribune Business: “The Bahamas’ less than mediocre performance in renewable energy integration has been so far trumpeted as ‘big strides’. To really up our game and do significant strides in renewable, distributed generation, it will take serious money, and I’m intentionally stressing distributed, as centralised solar and or wind generation has significant loss profile and does not benefit the wider population directly. Large-scale solar will mostly benefit large investors. Lower energy prices would benefit the larger public, but that result is hinging on many conditions.”

Mr Szasz spoke out after K Peter Turnquest, deputy prime minister and minister of finance, said in unveiling the 2019-2020 budget: “In the area of energy conservation, one of the initiatives adopted from our 2017 manifesto is a move toward renewable energy, particularly in the Family Islands.

“To this end, the government is seeking, with the funding support of the multilateral community, to provide for over $170m over the next eight to ten years to introduce commercial scale solar energy opportunities throughout The Bahamas, with particular emphasis on the Family Islands.”

Mr Szasz, however, warned: “Government-managed investment structures have not been a big success in the past, and the funds’ distribution opens up for corruption and a lot of other deficiencies when it comes to evaluating which projects deserve funding and at what level.

“When it comes to the target area, namely the Family Islands, the idea is good and it’s going back all the way to 2013 when PowerSecure introduced its Interactive Distributed Generation (IDG) concept that never was implemented.

“Dusting off that concept would be a great model for further developments, as it would include New Providence as well, but with a different model for implementation. The $170m sounds like a large sum, but if we divide it to the 12 major islands and eight to ten years, the reality looks very different.”

Mr Szasz added: “Solar-plus storage, or rather call it mini/micro-grid projects’, aim to achieve lowest cost of energy over the lifetime of the system, usually 20-25 years. This is the magic lowest cost of energy (LCOE) concept that calculates what level of renewable penetration gives the biggest bang for the buck.

“In micro-grid design it is estimated that 70-80 percent renewable penetration is the magic number, as adding more reserve storage capacity for a few cloudy days is considered more expensive than to run generators for a few hours.

“In mathematical terms, renewable sources have to provide 70-80 percent of the island’s energy needs, which from solar entails three-four times base load generation where the largest chunk of energy is stored. Storage is then used to firm up intermittency and for peak shaving when most power is needed in a short period. This requires different types of batteries and today’s technology might be obsolete tomorrow, which means planning for 25 years is far from easy.”

Mr Szasz pointed out that the technology preceding renewable integration “is costly, its deployment lengthy and requires careful planning”. He said: “Probably a large part of the $170m would be required to provide the perquisite for renewable integration. What should be a better path is to hand over the initiative to private investors and developers.

“On the small to medium scale, the most cost effective method is to establish government-backed loans to install rooftop solar for up to 30-40 percent penetration level, and although this avenue is a bit less cost effective, every household and business investing in solar enjoys the immediate benefit of the investment by reducing or eliminating its power bill. Family Islands should be developed as cooperatives, perhaps making BPL shareholders in the amount they bring in their fossil generation and distribution assets.”

Mr Szasz added: “The developers then would contract expert design and engineering firms (EPCs) to build and operate solar and wind facilities, and URCA should regulate the appropriate business models that serve local communities. Any funds coming into the country should be managed by commercial fund managers, and project funding should be awarded by a competent Energy Council.

“The current Electricity Act should be changed to reflect the opportunities renewable integration can bring to the nation, and BPL should adapt by becoming partners on the Family Islands and a “wires-only” distribution entity in New Providence with the best possible technology to adapt to an ever changing technological landscape.”