Grand Bahama Power ‘very advanced’ on 20MW solar installation

Grand Bahama Power Company headquarters.

Grand Bahama Power Company headquarters.

• Utility in talks with three private power producers

• Aims to begin construction on own project in ‘23

• Critics fear fuel charge hike’s economic impact


Tribune Business Editor


Grand Bahama Power Company is “at a very advanced stage” in formalising four separate projects that will collectively provide 20 Mega Watts (MW) of solar generation capacity for the island’s grid.

Dave McGregor, Caribbean chief operating officer for Emera, GB Power’s 100 percent owner, told Tribune Business that besides its own 5 MW utility-scale solar project it is also in negotiations with three independent power producers (IPPs) to develop plants that will generate the same amount of energy.

Blaming Hurricane Dorian and the COVID-19 pandemic for previously delaying progress, he said: “We’re working very hard with independent power producers to bring solar to Grand Bahama next year. We’re at a very advanced stage with a couple of proposals. We’re close to getting a few projects within the next year.”

Confirming to this newspaper that there are three separate proposals from IPPs, although he did not name the entities involved, Mr McGregor said the 20 MW of collective solar generation capacity would not necessarily translate into the projects supplying 38 percent of Grand Bahama’s 53 MW peak demand. With output likely to be less than the combined maximum, he suggested the solar investments will meet around 10 percent of the island’s electricity demand.

“It makes all sorts of sense,” Mr McGregor added of the solar roll-out, “as long as you are paying a reasonable rate for the solar power produced. The expectations of developers for a rate of return are often a little high, but the ones we are working with are very reasonable.”

He described the solar energy investment as akin to fuel hedging, as the power produced represents oil and other fossil fuels that GB Power does not have to purchase. Mr McGregor said Grand Bahama’s utility monopoly is seeking to acquire solar energy from the three IPPs at 10 cents per kilowatt hour (kWh), adding that a price of 14-15 cents “doesn’t make sense”.

The Emera chief explained that GB Power’s own renewable ambitions had been delayed by Hurricane Dorian, which flooded the site originally selected for its solar farm, thus forcing a relocation. “I actually think the IPPs will be a little ahead of us,” Mr McGregor told Tribune Business. “We’ve been trying to manage our operations and costs because it’s been a tough couple of years. 

“I hope we finish construction by the end of next year but the supply chain is a little tough. I have a high degree of confidence we will have at least three IPPs up and running next year. What we have to do is that we announced our project probably in early 2019 before Dorian. The site was flooded by Dorian and we had to find another.

“We’ve secured another site and are doing the geo-tech work, the planning process and hope to start in 2023. We need to get off oil and get on to solar at an affordable price. We’d started the transition, but obviously got delayed by Dorian and the COVID-19 pandemic. But we’re back on track now.”

Mr McGregor spoke after GB Power announced customers will see a 15 percent increase in the fuel charge reflected in their November bills, as it rises from 10 cents per kWh to 11.5 as a result of the increase in global oil prices earlier this year.

“I asked the team today to keep looking out for 2024 and 2025,” he added of GB Power’s fuel hedging initiative. “Oil is up and down every day. It dropped a bit on Thursday, and if we can get a good price for 2024 we will lock that in so we can give price certainty to our customers.”

However Pastor Eddie Victor, head of the Coalition of Concerned Citizens (CCC) and a long-time GB Power critic, was less than impressed by both the fuel charge increase and pledges that the utility’s long-anticipated solar roll-out is now about to materialise.

“Our concern has to do with the condition of the economy,” he told Tribune Business of the fuel charge increase. “I guess there’s nothing we can do about oil prices, but this power company broke ground on a solar plant in 2018 and there’s nothing.

“They broke ground and are supposed to be making progress from then. Where is the solarisation? I think the Government made an agreement that a solar power plant will be built on New Providence. These are the things we need on Grand Bahama, and we need it quickly.”

GB Power said on Friday that it has managed to hedge 80 percent of its fuel needs for 2023 at $51 per barrel, a sum between 40.5 percent and 44.5 percent below prevailing spot prices on the global oil market last night. It added that this will translate into a fuel charge of between 12 cents and 14 cents per kWh for customers next year, but Pastor Victor argued this is not guaranteed.

“We’re going to continue to put pressure on them and will see what happens,” he told this newspaper. “My view is that it’s [the November fuel charge increase] bad timing. I think if they had a different model of operation as far as how the company runs they could keep the cost down.

“I anticipated that when the Government made the announcement on Bahamas Power & Light’s (BPL) fuel charge in Nassau, GB Power would follow suit here. I anticipated it, and when I got the call on Friday I wasn’t surprised. In the three years since Dorian, they’ve added a ‘storm recovery and stabilisation’ charge to the bill, had an increase in the base rate and now an increase in the fuel charge.

“That is significant for an island that’s recovering from Dorian and the pandemic.” GB Power was earlier this year granted a 3.3 percent increase in its base rate, although this was less than what it had hoped to be granted by its regulator, the Grand Bahama Port Authority (GBPA).

Explaining that higher global oil prices have forced the fuel charge increase from 10 cents to 11.5 cents per kWh from November 1, 2022, Nikita Mullings, GB Power’s chief operating officer, said in a statement: “With GB Power’s fuel purchase strategy, or fuel hedging programme, we have been able to protect customers from global price volatility as the cost of oil has risen this year...

“We know there is never a good time for a rise in costs, and these are particularly difficult times for many Grand Bahamians. Without hedging, fuel costs would be at about 18 cents per kWh. For 2023 we’ve managed to hedge our fuel costs at less than $51 a barrel.

“Based on current market trends, the fuel charge for 2023 should range between 12 to 14 cents per kWh. It’s clear our fuel strategy continues to benefit customers despite the unprecedented rise in global oil prices. With the continued price volatility, we will be communicating regularly with customers on fuel costs. Beginning in November and every month thereafter, we will be advising customers of the fuel cost monthly.”

GB Power said that with the November 1 increase, a residential customer consuming 350 kWh per month will see the fuel portion of their bill rise by approximately $5. It added that fuel costs are a direct pass-through to customers, and the company does not benefit in any way from the fuel charge.

“We want to encourage customers to be mindful of energy use and to consider adopting habits such as limiting air conditioning use, turning lights out and lowering hot water consumption to help manage monthly electricity costs,” added Mrs Mullings. “At the end of the month, every effort to conserve is meaningful.”


AnObserver 1 year, 6 months ago

This is how things work when a competent private company is allowed to make their own decisions, instead of layers of govt bureaucracy, corruption, unions, and nepotism turning everything to shit.


Hobo2500 1 year, 6 months ago

Just think every dollar in foreign currency we don’t spend on oil is a dollar we can use for something else. Almost like free money, which is something every Bahamian wants


Flyingfish 1 year, 6 months ago

If only BPL could think of that. But Shell got their tongue.


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