CARILEC CE JOURNAL: Navigating Power Sector Modernisation in the Caribbean

Dec 7, 2022

Check out our President, Wayne Caines’ interview in issue #19 of the CARILEC Caribbean Electric Industry Journal: CARILEC CARIBBEAN ELECTRIC INDUSTRY JOURNAL ISSUE#19 – CARILEC

INTRODUCTION

The Caribbean Electric Utility Services Corporation (CARILEC), is elated to bring you our first Electric Utility Member Interview Series, with Mr. Wayne Caines, President of BELCO and a CARILEC Board Director. This interview will focus on the work of CARILEC Member, Bermuda Electric Light Company Limited (BELCO) who is Bermuda’s sole supplier of electricity, which operates a generating plant and transmission and distribution systems throughout the Island. Bermuda Electric Light Company Limited (BELCO) is a wholly owned subsidiary of Liberty Group Limited. Liberty Group Limited is a Bermuda-based provider of energy and energy-related services, owned by Algonquin Power & Utilities Corp. BELCO has been supplying a secure, reliable, and sustainable electric power system for over 110 years, laying the foundation for Bermuda’s continual progress. As of 2021, BELCO serves 36,066 customers comprising of residential, commercial, industrial and others (such as street lighting). BELCO is responsible for operating a generating plant with a maximum capacity of 142 MW, which consists of 8 Diesel engines and 4 gas turbines. In 2021, BELCO generated 563 million kilowatt hours.

INTEVIEW

CARILEC: Mr. Caines, what does the energy transition mean for BELCO and by extension, the
island of Bermuda?

Mr. Caines: As Bermuda’s trusted energy provider for over a century, employing a team of 234 persons, we have been with the residents of Bermuda through many changes. Consumption of electricity has grown exponentially. Our system has been continually improved upon and adapted to meet the needs of our customers throughout the years. We are always working to make the system safer, more economical, and more reliable. We have also learned over the decades about the environmental impact of our power generation operations and as perspectives have changed, we have worked steadily to remediate historical damage while seeking new, more sustainable methods of generating electricity, to ensure a safe and reliable energy infrastructure for future generations.

As BELCO is currently the largest generator of electricity on the island and Bermuda’s second largest employer, we are acutely aware that we have a responsibility to our employees, the island of Bermuda, our environment and to future generations. It is our responsibility to change, adapt and educate in order to keep up with industry best practices. BELCO wants to ensure a locally appropriate sustainable energy mix is achieved, ensure that our community is equipped to take the journey to a sustainable future with us, and ensure our employees are equipped to move Bermuda closer to a renewable energy future.

With the above being said, we are committed to achieving carbon net zero by 2050. That is the process of balancing the amount of greenhouse gas emissions we produce with the amount we remove from the atmosphere. In other words, we will make operational changes to reduce our carbon emissions to the lowest amount possible and offset what we cannot, as a last resort.

This commitment also extends to offsetting the carbon footprint of each of our employees, thus achieving carbon neutrality for our entire team. To date, we are proud to boast that we have been able to offset 2,658.21 tonnes of C02, which is equivalent to the emissions generated by driving a typical family car with a combustion engine 12,917,040 miles.

CARILEC: What are Bermuda’s current plans and recent government or utility initiatives regarding the energy transition and diversifying the country`s energy matrix?

Mr. Caines: In terms of the plans for Bermuda, all key stakeholders, namely the Government of Bermuda, the Regulatory Authority of Bermuda, and BELCO are all on the same page. Each entity is driven by the goal of moving Bermuda towards a more sustainable energy future.

As the utility industry is a regulated industry, the Regulatory Authority of Bermuda (RAB) published the island’s Integrated Resource Plan (IRP) in 2019 which calls for 85% of Bermuda’s electricity to be generated by renewables. Those particularly prioritised are offshore wind, solar and biomass technologies, to be utilised by 2035 with the aim of stabilising the cost of fossil fuels and inflation along with providing opportunities for jobs and training to support renewable energy infrastructure.

The Bermuda Government’s Department of Energy in partnership with the Regulator has undertaken two initiatives regarding Bermuda’s energy transition which are (1) the introduction of the Energy Regulatory Sandbox, which is aimed at encouraging new renewable energy technology developers to invest and test their products in Bermuda; and (2) the introduction of a Green Energy Environmental Justice Fund, which is aimed at providing residents with capital to invest in renewable energy solutions.

In recent months, the Government and the Regulator have joined BELCO on our journey of educating the public on smart energy consumption and energy conservation tactics. In addition, both the Government and BELCO have been investing in learning what similar jurisdictions and communities are doing to move towards a sustainable energy future. Through those networking opportunities and educational conferences, we are able to share our knowledge, challenges, and successes to effectively learn from each other with the ultimate goal of protecting the Earth.

At BELCO, as we continue to monitor and assess improvements in alternative power-generating technologies, we remain firmly committed to achieving Net Zero by 2050 and are focused on transitioning to a renewable power system. While this transition is ongoing, we are laying the foundation to ensure that our energy future is sustainable and locally appropriate.

The following projects have been undertaken and designed by BELCO to move us one step closer to
our sustainable energy future:

Transmission & Distribution Upgrades

Presently, the island’s grid capacity is limited in its capacity to support large-scale generation from renewable resources. Our old cables and network were designed for central generation; while our upgrades will ensure a safer, more reliable grid, capable of accommodating the intermittent nature of most renewable technologies across the networks as they come online. The transmission cables serve as the backbone of the grid; thus, their replacement represents a critical step in moving Bermuda towards its energy future.

One of the first phases of the grid modernisation project was to accommodate the 6 MW of power from
Bermuda’s Airport Solar Finger Installation.

Asset Retirement Project

Our Asset Retirement Project (ARP), which began in 2021, is removing obsolete assets, unsafe buildings and hazardous material, while increasing site safety and aesthetic appeal, which will prepare our campus for the future diversification of our energy sources.

Once the project is complete, we would have successfully dismantled and decommissioned 8 of our 16 engines along with 4 of our 8 gas turbines. In addition, 5 of our smokestacks will be demolished.

Advanced Metering Infrastructure (AMI)

Our Advanced Metering Infrastructure project has reached roughly 85% completion to date and is aimed at empowering customers – helping them to understand their electricity usage and providing them with the tools required to reduce their energy consumption.

Our AMI is an integrated system of advanced meters, communication networks and data management systems that enable two-way communication between BELCO and our customers.

AMI provides you with relevant data about your household energy usage, while the portal overlays outdoor
temperatures and humidity from the day from local weather services to help explain the usage. With AMI
meters, our customers can set usage thresholds with notifications, monitor real-time consumption to adjust
accordingly and rely on more accurate billing.

Nolan Smith Battery Energy Storage System (BESS)

The Nolan Smith BESS was built to provide reserve capacity for BELCO’s plant and to increase the robustness and reliability of Bermuda’s entire electrical network. Reserve capacity is the standby power that is always needed in case a system fault causes an engine that is providing power to the grid to go offline. Reserve capacity has traditionally been provided by running engines that are not adding power to the grid but can do so at a moment’s notice.

If there is a problem with generation, the BESS will automatically kick in within 50 milliseconds (0.05 seconds). This response time is three times faster than a standard engine and will help to avoid the load shedding often associated with such events. The BESS is made up of multiple ISO containers and transformers, having an overall footprint of approximately 2,000 square feet. Held within the containers are battery cells, inverters, controllers, relays, fans and a fire suppression and detection system. The containers are integrated into various BELCO networks including the fibre optic communication network and main power supply connection to the Phoenix Switchboard.

The BESS stores up to 10 MW of power that can be discharged for up to 30 minutes and reduces BELCO’s CO2 emissions by approximately 4,500 tonnes per year.

The BESS system was the first of its kind in the Caribbean region and in October 2019 won the Best Energy
Storage Project award at the Caribbean Renewable Energy Forum (CREF), which is the largest annual gathering of the Caribbean clean energy market.

CARILEC: Can you tell us which role does/can BELCO play, regarding the planning and implementation of renewable energy expansion in the country?

Mr. Caines: BELCO hopes to lead the planning and the implementation of Bermuda’s renewable energy expansion through partnership with the Bermuda Government, the Regulatory Authority of Bermuda and the residents of Bermuda. It is our desire to leverage the experience and expertise of Algonquin Power & Utilities Corp. (owner of BELCO) and our engineers to bring renewables to Bermuda.

CARILEC: Mr. Caines can you elaborate on the type of support or guidance that is needed from governmental institutions or legal frameworks for BELCO to implement RE expansion, whilst maintaining energy affordability and security of supply for customers?

Mr. Caines: As the utility industry in Bermuda is regulated, we would require support and approval from the Regulatory Authority of Bermuda (RAB) to achieve a renewable power generation system. The plan submitted would need to be cost-effective for our customers and should include how we would maintain reliability for them whilst renewables come online.

CARILEC: Global experiences have shown that citizen perception of and their active participation in energy transition can be a key success factor for its success. What can citizens and customers do in Bermuda to take a more active role to contribute to power sector decarbonisation and how would BELCO support such efforts from the utility perspective?

Mr. Caines: Customer engagement and support is crucial to BELCO’s transition to a carbon Net Zero future. As Bermuda’s primary energy partner, we are taking this journey to a sustainable future with all of Bermuda – only together can we achieve carbon Net Zero by 2050.

Our customers in Bermuda can take a few different actions to assist in our journey to Net Zero. These include:

  1. Investing in Electric Vehicles
  2. Reducing consumption or ensuring smart consumption of energy
  3. Investing in energy efficient appliances
  4. Auditing energy usage of residences and businesses to ensure maximum energy efficiency

As BELCO’s journey progresses, we are increasing our communication initiatives with our customers to assist them in learning new ways to conserve or efficiently use energy and new ways to live more sustainably. We will soon commence a public education process on renewables and how they could/would work in Bermuda and whether they are a viable option or not. It is important for stakeholder engagement that we remain open and transparent in our process and the information being learnt.

CARILEC: Let’s explore Electro-mobility and the energy transition: With the decarbonisation of the transport sector, power systems and markets may require additional clean generation capacities to satisfy the increasing electricity demand. What would be BELCO`s suggestion on how to tackle this challenge in Bermuda and how could the utility contribute to enable e-mobility in the country?

Mr. Caines: As the owner of Bermuda’s energy grid infrastructure and Bermuda’s primary energy partner, our role in enabling e-mobility on the island includes partnership, education and setting an example. Not  only must we partner with local engineers and project managers when installing large scale EV infrastructure, but we must also partner with our residential customers who require charging stations at their residence. We believe it is our responsibility to assist in educating the public on ways to enter the future more sustainably, with one of those ways being through the investment in EVs.

We also believe that as a local business with one of the largest commercial fleets on island, we must set the example by transitioning our own fleet to EVs in order to further reduce our carbon footprint. For the last
several years BELCO has been pursuing this transition. BELCO operates an intermediate/light vehicle fleet of which 83% are EVs. The remaining 17% of non-EVs will be retired from the fleet once they have reached the end of their useful lives and replaced with EVs.

We also operate a heavy vehicle fleet which includes specialty vehicles like bucket trucks, recovery trucks, pole digger trucks and winch/crane trucks. While the intention is to transition this fleet to EVs, no viable option currently exists to meet the company’s demands for these vehicles. Given the rapidly developing technology for these vehicles, BELCO hopes to start the transition to an electric heavy fleet in 2024.

However, while there is currently no viable option for a fully electric heavy fleet, BELCO’s bucket trucks have hybrid aerial devices, so when a bucket truck is parked, and the bucket/aerial device is in use, it is powered by battery and therefore does not use fuel. BELCO also operates ten forklifts, five of which are now electric. The remaining five forklifts will be replaced with electric forklifts at the end of their useful, operating lives.

CARILEC: Given the drastic changes of global fossil fuels prices in the past months – which impact on electricity generation, distribution and consumption – did BELCO observe and how does BELCO adapt to this recent increase of fuel (and technology) prices?

Mr. Caines: As a plant that currently operates on fossil fuels, the drastic global pricing changes have negatively impacted our customers’ electricity costs.

One of the areas we cannot control are fluctuations in oil prices and consequently, the price at which we
purchase fuel, which is reflected in our Fuel Adjustment Rate (FAR). The FAR is a cost recovery mechanism
and all cost increases, as well as any savings due to a reduction in BELCO fuel costs, are transmitted to our
customers.

The FAR, which is approved by the Regulatory Authority of Bermuda, reflects the total cost to deliver fuel to BELCO’s central plant and is comprised of two parts—the fuel adjustment charge and the Bermuda Government and UNESCO World Heritage taxes.

We are acutely aware that high energy costs are a burdensome expense for many customers who are struggling. In order to better serve our customers with current increased fuel costs, BELCO publishes a
monthly energy efficiency blog with tips on how to reduce energy consumption or consume energy more efficiently. This content is publicised through various local channels to educate our customers on how they can take control of their consumption which will ultimately impact the amount of energy they consume and the amount of fossil fuels we must purchase.

In addition to educating our customers on energy efficiency, we are also nearing completion of our Advanced Metering Infrastructure (AMI) project. The project includes installing smart meters on all customer connections to provide our customers with access to real-time data on their energy consumption. This infrastructure gives our customers the power to make decisions about their energy consumption quickly, instead of waiting for the next billing cycle.

CARILEC: Mr. Caines in 2020, BELCO established the Bermuda-100 (“B100”) team – a team dedicated to furthering the company’s alignment with Bermuda’s goal to achieve 100% renewable energy for the country. Can you tell us more about the ongoing process, relevant milestones, and achievements as well as about critical challenges to consider and tackle when striving for such an ambitious goal?

Mr. Caines: BELCO’s B100 team has been working diligently to create the plan to achieve our goal of Net Zero by 2050. This includes our heavy research into the possibility of offshore wind energy as a viable and economic solution for Bermuda.

Our plan to achieve Net Zero will include renewables and the offsetting of CO2 as necessary. In the meantime, before the plan is finalised, we established a programme to achieve carbon neutrality for all our employees. Additionally, while finalising the Net Zero plan, we have taken steps internally to transition to a more environmentally sustainable company through the migration of customers to e-billing, which has significantly reduced our paper consumption. Furthermore, we launched a communications programme on how to live more sustainably, that educates our 234 employees on how they can assist Bermuda on her journey to sustainability.

We are very proud to share that our internal efforts include our Company canteen’s committment to eliminating the use of single use plastics entirely by the end of 2022!

CARILEC: BELCO has recently developed and commissioned a large-scale Battery Energy Storage System (BESS). What were the key arguments for its installation in Bermuda and what type of lessons learnt could be taken from its implementation and operation so far?

Mr. Caines: Storing electricity in our Nolan Smith Battery Energy Storage System reduces the need for an additional engine running for spinning reserve and therefore reduces our fuel usage, which is a cost-savings we can pass to our customers.

Some of the key benefits of this project and infrastructure are:

  1. The batteries come assembled in shipping containers, along with separate power conversion system
    containers and transformers to change the energy from alternating current to direct current and
    back again.
  2. Each container holds battery cells, inverters, controllers, relays, fans and a fire suppression and
    detection system.
  3. These containers have a high corrosion rating.
  4. Safety is built into every level of the system architecture, which has been designed to mitigate
    hazardous events at the cell level and eliminate them at the container level.
  5. The battery cells have a 10-year warranty and 20-year operating life.
  6. At the end of their lifespans, they will be shipped back to the US and disassembled as part of a
    recycling plan.

CARILEC: Mr. Caines, thank you for this very insightful interview, we are extremely proud of BELCO’s work in Bermuda, and your utility’s impact on the Caribbean’s Sustainable Energy Goals (SDGs). Thank you for taking this time to respond so comprehensively to our questions, we have no doubt the regional energy sector will enjoy this interview as much as we did. We will be sure to check-in with you and BELCO’s progress. Thank you Sir!

About Wayne M. Caines

Wayne M. Caines was born and raised in Bermuda. Wayne graduated from Oakwood University in 1993, with a Bachelor of Arts Degree in History and a Minor in Political Science. He is also a graduate of the University of Kent, School of Law and the Royal Military Academy Sandhurst (RMAS) Territorial Army Commissioning course. He also served in the Royal Bermuda Regiment rising to the Rank of Captain. Wayne was employed for 6 years as a Crown Counsel in the Bermuda Department of Public Prosecutions. He was then appointed to the position of Chief of Staff, for the Premier at the time, the Honorable Ewart F. Brown JP MP. In 2006 Wayne was appointed as a Senator for the Bermuda Government, with responsibilities as the Junior Minister of Tourism & Transport, Environment and Sport. Mr Caines was Chief Executive Officer for Digicel Bermuda from 2008 to 2014. Mr Caines was then he was employed as the CEO of Seniac Consulting from 2014 to 2017. On July 2017, Wayne was elected as the Member of Parliament for Devonshire North West, where he served as Minister of National Security; for the Government of Bermuda with responsibility for the Bermuda Fire Service, the Royal Bermuda Regiment, the Bermuda Police Service, the Department of Corrections and the Bermuda Department of Immigration from July 2017 to July 2020. Wayne sits on various boards, including CARILEC, Polaris Holding Company, ILS Capital and Prospero Re.

News Archives

Blog Archive