Belco’s ageing generators at breaking point
When Belco workers opened up one of the their huge generators — known as E3 — for a routine overhaul last month, they got a nasty surprise. Inside the heavy oil-burning beast, half of the 16 connecting rods that link the pistons to the crankshaft were seriously worn and had to be replaced. Had one of them broken, “catastrophic failure” would have resulted, potentially fatal for the 32-year-old generator, potentially dangerous for staff, hugely expensive and disruptive for the island’s electricity supply.
Fortunately E3 was caught before the worst happened, but engine D8 was less fortunate. A bearing shell broke inside the colossal engine, forcing it to be shut down. D8 is housed in what is known as the Old Power Station, the oldest part of the Belco complex, a structure built about 100 years ago. Decades of ingrained industrial grime give the building a distinctly Dickensian look.
According to plant manager Elizabeth Davidge, speaking on a media tour of the plant, D8 will be out of action for at least four weeks while the repairs take place. D8 owes Bermuda nothing, having toiled for nearly four decades to generate electricity for the island. It may be many years past its retirement date, but it remains a key part of the energy infrastructure — its eight megawatts represent 5 per cent of Belco’s entire capacity.
Two of the other near 40-year-old engines in the Old Power Station have been retired — or rather they retired themselves. One gave up the ghost in 2009, another in 2015.
Belco gave the media a glimpse inside its operations at a time when the utility is awaiting approval for its capital plan from the Regulatory Authority and the Bermuda Government that would enable it to replace the ageing generators. It wants to decommission half of its 160-megawatt capacity over the next three years and replace it with new more efficient natural gas-burning generators providing 60 megawatts.
Belco describes the need as urgent and has argued that it will need to start work by next month in order to meet its timetable.
Working with ageing machinery has become way of life for the Belco workers described as “Herculean” by Sean Durfy, their chief executive officer, for keeping the ageing plant running so the island’s energy supply retains first-world levels of reliability.
Danny Johnson, who has worked at the plant for six years, personifies the pride of the Belco workforce. He came from a motorcycle background, but these days enjoys turning his attention to the king-size engines that power Bermuda.
He doesn’t mind the noise or the heat — temperatures for workers can reach 130 degrees Fahrenheit in the summer months in some areas of the plant — but he concedes that catastrophic engine failure is a concern and it can be dangerous.
“I know of two occurrences here when a connecting rod came out of the engine,” he said.
Joshua Simons has worked at Belco for 25 years, having started out as an apprentice and worked his way up to manager of facilities and security. He explained the challenges associated with operating equipment that has exceeded the lifespan it was designed for.
“You can replace moving parts, but when the actual housing of the engine becomes worn, then it gets very difficult,” Mr Simons said. “You’re working with tolerances of thousandths of a millimetre and these engines have been running for 8,000 hours a year for decades.”
The biggest engines in the plant are those installed in the East Power Plant in 1985. These enormous machines each provide between 10 and 14 megawatts of capacity. The neighbouring four engines, installed in 2005, run more efficiently and sit atop a vibration mitigation structure, something that residents living close by would appreciate. These are dual-fuel engines that can be converted to burn natural gas.
Fuel to the plant is supplied via a six-inch pipe that runs nine miles from the fuel storage area at Ferry Reach. The utility burns about 900,000 barrels of fuel per year — most of it heavy oil, but also some lighter diesel fuel. On site is a heavy oil tank that can hold 68,000 barrels of heavy oil — about three million gallons — and two 25,000-barrel diesel tanks.
Gas turbines, which kick in at times of high demand to provide extra capacity, run on the diesel.
Ms Davidge said the 4.5-megawatt turbines are more expensive to run than the bigger engines, because they are less efficient and because the diesel they burn is more expensive than heavy oil. When engines like D8 and E3 break down however, the turbines have to be used more often, driving up the overall cost of electricity production.
Belco reckons it can save $26 million on production costs by replacing its old generators.
The whole operation is overseen from the C. Eugene Cox Operation Centre, named after the late former Belco vice-president and Bermuda Minister of Finance. Denton Williams, Belco’s chief operating officer, showed off the hi-tech control room, full of monitors facing a large computerised map of Bermuda with Belco’s 32 substations lit up on screen.
The technology allows Belco to better enable the balance of supply and demand and to rapidly pinpoint outages and deal with them quickly.
“Our aim is to deal with outages within 90 minutes,” Mr Williams said. “The other day a car took out a utility pole and we managed to restore the power supply in 45 minutes. That’s quite impressive.
“The control centre is the epicentre of operations in a hurricane. After last year’s hurricane, we restored power to everyone within six days. After Hurricane Emily 20 years ago, it took us months, so things have improved.”
Asked whether Belco had set funds aside over the years in preparation for the retirement of the generators, CEO Mr Durfy said the company had done better than that by paying off debt. This had left Belco carrying no debt and well positioned to borrow the necessary funds to support its approximately $300 million capital plan.
Mr Durfy has previously stated that Belco would request a tariff increase of 3 to 4 cents per kilowatt hour during the construction period in order to ensure an adequate rate of return for shareholders. After that, he predicted the rate would peak and then start to fall as efficiency savings were realised.
The alternative — continuing to keep the ageing generators running — would cause costs tens of millions extra and would inevitably result in higher electricity prices, he added.
Mr Durfy argued that the Electricity Act, passed last year and which passed oversight of the electricity sector to the Regulatory Authority, in addition to seeking to open up electricity generation to competition, was “flawed legislation”.
The law did not give the Regulatory Authority the authority it needed to make decisions, nor the funding to bring in the expertise it needed to regulate the sector effectively, he said.
And he argued that studies had shown that competition in a market of less than 1,000 megawatts would not improve things for the consumer — the Bermuda market is only 160 megawatts.
“The legislation is flawed,” Mr Durfy said. “It will not work and it will add extra costs to the electricity system.
“We’re going to decommission 80 megawatts, because we have to for safety and economic reasons. If you want to open it up to competition after that, then I can guarantee that electricity prices would still go up.”
He had expressed these concerns and the urgent need to upgrade Belco’s plant in talks with government representatives and with the regulator. “I’m not sure anybody’s listening,” he said.
“They say they get it, but we’ve been saying this for years and nothing has happened.”
Without action, the reliability of the electricity supply is at risk, Mr Durfy said — a risk that he felt was not fully appreciated in Bermuda.
He said: “If you have a third-world electricity system and you have rolling blackouts, what does that do to your economy?”
AC wi-fi was not ‘gifted’, says Rabain
Cocaine trafficker jailed for 11 years
Gaming expert warns of ‘recipe for disaster’
It’s electric! No gas required
MPs to discuss Bermuda Day move
Music lover Brown dies, aged 86
House: businesses to fund rebuilding work
House: waterfront dispute to ‘end’
Take Our Poll