The Minister of the Environment and Housing delivered a communication to this House of Assembly today concerning the electric future of the country. You can read his presentation below:
PLANNING OUR ELECTRIC FUTURE:
The 100 Day Challenge
‘to initiate a plan to lower the cost of electricity”
BY KENRED M. A. DORSETT
MINISTER OF ENVIRONMENT AND HOUSING
MR. SPEAKER, WHILE THE BAHAMAS FACES A SERIOUS CHALLENGE AS A RESULT OF THE HIGH COST OF ELECTRICITY, A TREMENDOUS OPPORTUNITY EXISTS TO ADDRESS THE CHALLENGE.
THE HIGH COST OF ELECTRICITY CAUSES UNTOLD HARDSHIP TO FAMILIES AND IT HAS MADE THE COUNTRY UN-COMPETITIVE IN MANY BUSINESS AREAS. THE GOVERNMENT IN ITS CHARTER FOR GOVERNANCE COMMITTED TO INITIATE A PLAN TO LOWER THE COST OF ELECTRICITY IN THE BAHAMAS. THIS STATEMENT HIGHLIGHTS ASPECTS OF THE PROPOSED PLAN.
MR. SPEAKER, WE PRESENTLY USE LARGE DIESEL BURNING GENERATORS TO CREATE ENERGY TO PRODUCE ELECTRICITY FOR SALE TO CONSUMERS, LARGE AND SMALL, IN ALL OF OUR ISLANDS. DRAMATICALLY RISING FUEL COSTS HAVE EFFECTIVELY REDUCED BUDGETS FOR MAINTENANCE OF EXISTING EQUIPMENT AND ALL BUT ELIMINATED FUNDING RESERVES FOR PLANNED FUTURE EXPANSION FOR BOTH GROWTH AND REPLACEMENT OF AGING EQUIPMENT AND SYSTEMS. THIS IN TURN HAS FORCED EXTENSIVE USE OF LOW EFFICIENCY, HIGH COST GAS TURBINES AT THE BLUE HILLS FACILITY AND ADDITIONAL PURCHASES OF ADDITIIONAL GAS TURBINES THAT IN THE SHORT TERM ARE CHEAPER AND QUICK TO INSTALL, BUT IN THE LONG TERM FURTHER EXACERBATES THE PROBLEMS AND COSTS TO THE CONSUMERS BECAUSE OF FUEL CONSUMPTION.
A.UPGRADING EQUIPMENT CAN REDUCE COSTS
THEREFORE, MR. SPEAKER RELIABILITY UPGRADES AND REPLACEMENT AND REHABILITATION OF AUXILIARY EQUIPMENT WHICH HAS EXPIRED ITS USEFUL LIFETIME AND CONSIDERING ADDITIONAL HEAVY FUEL BASELOAD GENERATION IS AN INTEGRAL PART OF REDUCING ELECTRICTIY PRICES FOR THE PEOPLE OF THE BAHAMAS AND IS A PRIORITY FOR THE MANAGEMENT OF BEC. WITH THAT SAID, MR. SPEAKER IT SHOULD ALSO BE NOTED THAT THIS ADMINISTRATION IS CONSIDERING PROPOSALS TO INCREASE BASELOAD GENERATION AND SAVE BEC $100 MILLION DOLLARS ANNUALLY, WHICH COULD BE PASSED ON TO BEC CONSUMERS.
MR. SPEAKER THE GOVERNMENT HAS ALSO RECEIVED PROPOSALS FROM LOCAL AND FOREIGN INTERESTS INCLUDING A TAKE-OVER OF OR PARTIAL PROVISION OF THE GENERATING CAPACITY BY THE PRIVATE SECTOR AND THE SALE OF ELECTRICITY TO BEC FOR ON-SALE TO CONSUMERS, TO OUTRIGHT PURCHASE OF BEC BY PRIVATE INTERESTS AND THE SALE OF ELECTRICITY DIRECTLY TO CONSUMERS.
MR. SPEAKER, REDUCING THE COST OF ELECTRICITY IS A NATIONAL CHALLENGE. THE MAIN CONTRIBUTOR TO THE HIGH COST OF ELECTRICITY IS THE COST OF OIL ON THE INTERNATIONAL MARKET. ALL OF THE DIESEL OIL USED FOR THE PRODUCTION OF ELECTRICITY IS IMPORTED. WE DO NOT HAVE AN IMPACT ON, NOR CONTROL OVER, THE COST OF OIL ON THE INTERNATIONAL MARKET. HENCE, AS THE PRICE OF OIL INCREASES, SO DOES THE COST OF ELECTRICITY VIA THE FUEL CHARGE EXACTED BY BOTH BEC AND THE GRAND BAHAMA POWER COMPANY.
THIS GOVERNMENT IS COMMITTED TO REDUCE THE COUNTRY’S RELIANCE ON FOSSIL FUELS. WE BELIEVE ALTERNATE, RENEWABLE ENERGY SOURCES, APPLYING WASTE-TO-ENERGY TECHNOLOGIES AND PROMOTING ENERGY EFFICIENCY AND CONSERVATION MEASURES ARE ALL IMPORTANT IN ACHIEVING THIS OBJECTIVE, WHICH WILL HELP REDUCE THE COST OF ELECTRICITY. WE ARE CONSIDERING PROPOSALS FOR SOLAR ENERGY PLANTS, WASTE TO ENERGY PLANTS, OCEAN THERMAL ENERGY PLANTS AND WIND.
B.THE MINISTRY’S NEXT STEPS
MR. SPEAKER, IMPLEMENTING AND ADVANCING AN ACHIEVABLE SUSTAINABLE ENERGY MATRIX FOR THE BAHAMAS TOGETHER WITH LEGAL REFORM IS CRITICAL. MY MINISTRY TOGETHER WITH THE MINISTRY OF WORKS AND URBAN DEVELOPMENT WILL WORK ASSIDUOUSLY WITH THE ATTORNEY GENERAL’S OFFICE AS THE ELECTRICIY ACT 1956 MUST BE AMENDED TO INCENTIVIZE PRIVATE-PUBLIC PARTNERSHIPS IN THE EXPANSION OR DEVELOPMENT OF THE COUNTRY’S ELECTRICITY INFRASTRUCTURE AND SUSTAINABLE ENERGY GOALS. WE MUST REMOVE THE LEGAL IMPEDIMENTS OF EXCLUSIVE RIGHTS FOR THE GENERATION AND SALE OF ELECTRICITY, THE PROHIBITION OF SELF-GENERATION AND INTERCONNECTION TO THE GRID. IN ADDITION TO ADVANCING AN ACHIEVABLE SUSTAINABLE ENERGY MATRIX AND AMENDING THE ELECTRICITY ACT, MY MINISTRY WILL ADVANCE THE FOLLOWING MEASURES AS A PART OF THE PLAN TO REDUCE ELECTRICITY COSTS:
1. INTRODUCING A RENEWABLE ENERGY ACT;
2. CREATING AN ELECTRICITY SECTOR REGULATOR;
3. ESTABLISHING A SUSTAINABLE ENERGY UNIT IN THE MINISTRY OF ENVIRONMENT AND HOUSING;
4. DEVELOPING A NATIONAL REVIEW PLAN TO EVALUATE THE ECONOMIC VIABILITY OF MOVING POWER FROM ONE ISLAND TO ANOTHER FROM A LARGER AND MORE EFFICIENT POWER PLANT AS PROMISED IN THE CHARTER FOR GOVERNANCE;
5. EXPANDING INCENTIVES TO REDUCE THE DEMAND FOR ENERGY BY MEASURES SUCH AS INCREASED USES OF SOLAR AND WIND ENERGY, TANK-LESS HEATERS; SOLAR WATER HEATERS; THE MOST ENERGY EFFICIENT APPLIANCES AND AIR-CONDITIONING SYSTEMS AND OTHER MEANS;
6. INTRODUCING FURTHER REDUCTIONS AND/OR EXEMPTIONS OF CUSTOMS DUTIES ON ENERGY EFFICIENT APPLIANCES;
7. EXPLORING WITH THE MINISTRY OF FINANCE A PROGRAMME TO ENCOURGE BUSINESSES TO CONDUCT INDEPENDENT ENERGY AUDITS, WHOSE COST WOULD BE DEDUCTIBLE FROM REVENUES THAT FORM THE BASIS ON WHICH THE BUSINESS MUST PAY ITS BUSINESS LICENCE FEES FOR THE YEAR THE AUDIT IS CARRIED OUT AS PROMISED IN THE CHARTER FOR GOVERNANCE; AND
8. ENCOURAGING PRIVATE SECTOR ELECTRICITY GENERATION THAT CAN BE SOLD TO BEC.
MR. SPEAKER THE TOURISM SECTOR ACCOUNTS FOR APPROXIMATELY 40% OF ELECTRICITY CONSUMPTION AND PUBLIC BUILDINGS ACCOUNT FOR APPROXIMATELY 10% OF THE ELECTRICITY CONSUMPTION IN THE BAHAMAS. AS A RESULT, MY MINISTRY HAS COMMENCED DIALOGUE WITH THE MINISTER OF TOURISM TO CREATE AND ADVANCE A FRAMEWORK TO INCREASE ENERGY EFFICIENCY IN THE TOURSIM SECTOR. DIALOGUE HAS ALSO COMMENCED WITH THE MINISTER RESPONSIBLE FOR TRADE & INDUSTRY TO ACHIEVE THE SAME GOALS AND PROVIDE MUCH NEEDED RELIEF TO BAHAMIAN BUSINESSES TO ENHANCE THEIR COMPETITIVENESS.
MR. SPEAKER, RELEVANT MINISTRIES WILL ALSO BE INVOLVED IN DEVELOPING A PRUDENT STRATEGY FOR THE RETRO-FITTING OF GOVERNMENT BUILDINGS AND PUBLIC STREET LIGHTING FOR WIDER USE OF SOLAR POWER AND CONVERTING SOME STREET LIGHTS TO LED FIXTURES TO GREATLY IMPROVE VISIBILITY AND REDUCE COSTS IN THE SHORT TERM. THE MINISTER OF EDUCATION HAS ALSO AGREED TO COOPERATE WITH MY MINISTRY IN ADVANCING A PROGRAMME TO CONDUCT ENERGY AUDITS OF ALL SCHOOLS.
MR. SPEAKER, THERE IS ALSO AN OPPORTUNITY TO PURSUE ALTERNATIVE ENERGY SOURCES OF FUEL, INCLUDING LIQUEFIED NATURAL GAS (LNG) AND COMPRESSED NATURAL GAS. MY MINISTRY AND THE ATTORNEY GENERAL’S OFFICE WILL ADVANCE APPROPRIATE REGULATIONS AND WITH ENVIRONMENTAL SAFEGUARDS IN PLACE, THIS GOVERNMENT WILL BE ACTIVELY AND RESPONSIBLY CONSIDERING THE OPERATION OF PLANTS FOR SUCH ENERGY SOURCES TO FURTHER REDUCE THE COST OF ELECTRICITY FOR BAHAMIANS.
MR. SPEAKER, THE GOVERNMENT WILL AGGRESSIVELY PURSUE A WASTE-TO-ENERGY SOLUTION IN THE SHORT TERM TO MANAGE THE NEW PROVIDENCE LANDFILL ON TONIQUE DARLING HIGHWAY, TO PRODUCE ELECTRICITY FOR ON-SALE TO BEC. WHILE THE PRIMARY BENEFIT WILL BE FROM AN ENVIORNMENTAL PERSPECTIVE, A RESULTANT BENEFIT WOULD BE THE PRODUCTION OF ELECTRICITY AT A LOWER COST, BEING MADE AVAILABLE TO THE PUBLIC. TO PROPERLY ADVANCE THIS EFFORT MY MINISTRY WILL CAUSE A DETAILED SURVEY OF WASTE CHARACTERIZATION TO BE PERFORMED IN THE IMMEDIATE FUTURE.
MR. SPEAKER, OF THE ALTERNATIVES INDENTIFIED FOR THE COMMERCIAL PRODUCTION OF ELECTRICITY MANY MAY NOT BE COMMERCIALLY VIABLE FOR THE BAHAMAS AT THIS TIME AND OTHERS SUCH AS OCEAN ENERGY, WIND POWER AND BIO-ENERGY REPRESENT POTENTIAL OPTIONS IN THE FUTURE. BUT, FOR US, MR. SPEAKER THE GREATEST POTENTIAL LIES IN SOLAR. THE HIGH SOLAR IRRADIATION IS FAVOURABLE FOR GENERATING POWER WITH PHOTOVOLTAIC (PV) PLANTS. PV CAN BE INTEGRATED INTO BUILDINGS OR ON GREEN-FIELD, THE LATTER USUALLY LESS EXPENSIVE AND WITH THE POSSIBILITY TO ERECT PLANTS IN UTILITY SCALE.
MR. SPEAKER, FOR A NUMBER OF YEARS BEC HAS CHARGED A BASE PRICE OF 11 CENTS PER kwh FOR ELECTRICITY WITH THE COST OF FUEL ADDED ON – PRODUCING A FINAL CHARGE TO RESIDENTIAL CONSUMERS IN THE RANGE OF 40 CENTS PER kwh. THE ANTICIPATION IS THAT, ULTIMATELY, WITH SOLAR GENERATED POWER, ELECTRICITY COULD BE PROVIDED IN THE RANGE OF 10 – 15 CENTS PER kwh BEFORE DISTRIBUTION MANAGEMENT AND TRANSMISSION COSTS ARE IMPUTED.
MR. SPEAKER, THIS IS A GREAT OPPORTUNITY FOR A PRIVATE-PUBLIC PARTNERSHIP AND THIS ADMINISTRATION IS REVIEWING PROPOSALS TO ACHIEVE THIS. PRIVATE INVESTORS WOULD BE ENCOURAGED TO BUILD SOLAR PLANTS WITH A LONG TERM CONTRACT FOR SALE OF POWER PRODUCED TO BEC WHICH WOULD THEN BE RESPONSIBLE FOR SUPPLYING CONSUMERS ON EXISTING DISTRIBUTION LINES. SINCE SUNSHINE IS FREE ONLY THE COST OF THE BUILDING, MAINTAINING AND REPLACING THE PLANT AS WELL AS ONGOING MANAGEMENT WOULD PRODUCE A COST WHICH SHOULD BE QUANTIFIABLE FOR THE NEAR AND LONG TERM THEREBY ALLOWING FOR A LONG TERM SET FEE FOR POWER PROVIDED. MR. SPEAKER, I AM SURE THIS WOULD BE WELCOMED BY OUR PEOPLE.
MR. SPEAKER, WITH SOLAR GENERATED POWER, CONSUMERS MAY BE ENCOURAGED TO CREATE RENEWABLE ELECTRICITY FOR THEIR OWN USE WITH EXCESS GENERATION BEING SOLD BACK TO BEC WITH NEW-BILLING ARRANGEMENTS. IMAGINE THAT MR. SPEAKER, BAHAMIAN BUSINESSES AND HOMEOWNERS GETTING A CHEQUE FROM BEC RATHER THAN PAYING BEC. MR. SPEAKER THAT IS PROGRESSIVE AND THAT IS WHAT WE ARE FIGHTING FOR.
IN TIME, WE CAN BECOME KNOWN AS ‘THE ISLANDS IN THE SUN” FOR OUR TOURISM BUSINESS AS WELL AS FOR POWER GENERATION! THE BAHAMAS CAN AND WILL BECOME A WORLD LEADER IN ALTERNATE AND RENEWABLE ENERGY, CREATING HUNDREDS OF NEW GOOD PAYING JOBS AND NEW ECONOMIC OPPORTUNITIES FOR BAHAMIANS.
MR. SPEAKER THE IMPORTANCE OF REDUCING THE COST OF ELECTRICITY IS DEMONSTRATED IN THE FACT THAT THE OFFICE OF THE PRIME MINISTER; THE MINISTRY OF ENVIRONMENT AND HOUSING; THE MINISTRY OF WORKS & URBAN DEVELOPMENT AND THE MINISTRY OF GRAND BAHAMA ARE ALL WORKING TOGETHER AND ADVANCING A COORDINATED APPROACH TO PROVIDING RELIEF TO OUR PEOPLE.
AND SO MR. SPEAKER, WHILE THE CHALLENGE WE FACE MAY APPEAR DAUNTING TO SOME. TO THIS GOVERNMENT IT PRESENTS TREMENDOUS OPPORTUNITY FOR OUR COUNTRY AND ITS PEOPLE.
THIS PRIME MINISTER AND THIS GOVERNMENT WILL PROVIDE THE SOLUTIONS TO REDUCE THE COST OF ELECTRICITY AND SO I URGE MY BROTHERS AND SISTERS TO HOLD ON FOR JUST A LITTLE LONGER…CAUSE IT AINT LONG NOW!
THANK YOU AND GOD BLESS.