A significant milestone in our history

Nov 23, 2018

The end of the month is the deadline for submissions for comments on the integrated resource plan for Bermuda’s energy future.

This step is a direct result of the Electricity Act 2016, which became operative in October 2016 and legislated the requirement for the Regulatory Authority of Bermuda to request of Belco an integrated resource plan.

Production of an integrated resource plan is now the standard practice for many countries around the world, and each sets out an energy plan for a determined time period.

Under the Act, the RAB is empowered to ask the licensed transmission, distribution and retail licensee – in this case, Belco – to develop an IRP that will detail the strategic energy direction for Bermuda going forward.

Although written by Belco, the IRP is not our plan. The final IRP is approved by the RAB and belongs to all of Bermuda.

Belco submitted the IRP on February 15 of this year and for the past nine months it has been subject to consideration by the RAB and public consultation. As part of the legislated IRP process, the Act also stipulates that the Authority must seek proposals for bulk generation or demand side resources and it received eight such proposals.

These proposals must be taken into consideration by Belco when it drafts the final version of the IRP. Going forward, any new generation requirements will be procured by Belco as directed by the RAB in connection with the IRP.

The IRP process is open and transparent – all proposals and comments are posted online, and the public have until next Friday to comment.

All details of the IRP process and how to make a submission, together with a copy of the IRP, are on the authority’s website at www.rab.bm.

What is clear, and encouraging, is that the IRP process has been vigorously discussed and debated in online forums, through public meetings and reported on in the media.

What is also clear, and less encouraging, is the misinformation that has been spread about the IRP. A few facts may help clear up some of this misinformation.

While the IRP is a plan for Bermuda’s energy future, it is not set in stone. The IRP will be updated as market conditions and technologies change.

In fact, a new IRP will be requested by the authority at least every five years to ensure that Bermuda is kept on the correct course and adjusts when necessary.

The trap we must avoid in Bermuda is to set unrealistic goals that will hurt us all in the long run.

Of course, we all want to reduce our reliance on heavy fuel oil and diesel in favour of a cleaner fossil fuel and renewables, so that we can reduce carbon emissions to help curtail the effects of global warming to which Bermuda is so susceptible. But to be overly aggressive and set unrealistic goals comes at a cost – both financially and socially.

With local bills already too high, and efforts continuing to reduce Belco’s costs, it is unreasonable to ask the people of Bermuda to pay substantially more than they pay at present and further increase the cost of living simply so that a higher proportion of electricity can be generated by renewable means.

Belco has embraced and continues to embrace renewable technology.

We have installed solar panels at our Serpentine Road location, we have committed to replacing our entire vehicle fleet to electric, and electricity is fed into our grid from 474 homes and businesses across the island via private solar installations. These installations contribute approximately four megawatts of installed capacity.

Under our capital plan, we are installing a Battery Energy Storage System that allows us to continue to provide a high reliability of electricity while using less fuel.

With the BESS, an estimated $2 million per year will be saved in fuel costs. The lithium-ion batteries used in the BESS are built to have a 20-year life span. At end of life, they will be shipped back to the United States and disassembled as part of a recycling plan.

When the solar plant at the airport comes online, this will add another 6MW of installed capacity.

Add in the 4.5MW of power generated from burning waste at the Tynes Bay facility and Bermuda will have approximately 10 per cent of its installed generating capacity from renewable sources. This is certainly a good start.

More renewable capacity could be added to the mix outlined in the IRP, and in the future most likely will be, but any large generation system such as an offshore wind farm would require extensive – and expensive – upgrades to Belco’s grid.

Those costs would be burdened on to the customer. Bermuda should make the necessary investment in the appropriate technology only when it is able to afford it.

Cost is just one of the critical factors in determining Bermuda’s energy future, and the key is finding the right balance. Setting bold goals may be good for headlines, but we must make decisions based on thorough research, detailed calculations and best practices that have been developed in similar jurisdictions.

We can also learn from their mistakes.

We have put together a plan that is achievable, cost-effective and goes a long way towards reducing our emissions.

By switching to natural gas as a fuel, we can cut our carbon emissions by more than 30 per cent.

That is equivalent to removing all the internal combustion cars on the road today. We would also be able to eliminate the majority of nitrogen oxides, sulphur oxides and particulates that are produced by burning liquid fuels.

As can be seen in the following energy mix for the US, conventional generation in one form or another will be a very important part of any country’s total generation capacity for the foreseeable future.

The US Energy Information Administration reports that the approximate percentage breakdown of the energy generating mix in the US in 2017 was:

  • Natural gas 32 per cent
  • Coal 30 per cent
  • Nuclear 20 per cent
  • Hydro 7 per cent
  • Wind 6 per cent
  • Solar at 1 per cent

The remaining 4 per cent consisted of other generating means such as geothermal and biomass-fuelled power plants.

We believe that once all consultations have been held and the IRP is approved by the RAB, it will be a plan that benefits all of Bermuda by striking the right balance to ensure safe, reliable and cost-effective energy.

For more than 100 years, Belco has provided safe and reliable electricity. In fact, Belco is among the world’s leading power companies in terms of system reliability at 0.99952, with 1.0 being perfect reliability.

The generations of Bermudians that have built the plant and company from the ground up should be proud of all they have achieved. Serving Bermuda is at the heart of everything we do.

We urge everyone to participate in the IRP process – read the plan online and submit any comments you may have.

Our energy future belongs to all of us, and now is the time to have your say. Please visit www.yourenergyfuture.bm to learn more about our plan.

  • Dennis Pimentel is president of Belco

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