Agreeing a smart growth pathway
The transition to a sustainable energy future is not just a technical question, or an economic challenge, but is fundamentally a cultural challenge.
Professor Karl McDermott, an experienced regulator and consultant to Belco who works out of the University of Illinois, points out that “we need to recognise that the ‘modern’ vision [of electricity generation and use] that evolved from the 1920s through the 1980s relied on a technocratic solution that minimised the role of the customer as decision-maker”.
Belco has for 110 years been a monolithic, and technologically, advanced producer of electricity that flowed into homes and businesses, which acted as energy sinks. This system served us well in the past, but is obsolete today; consumers need to now step back into the discussion and to exert some control.
The first step is to invest in energy efficiency. In the Greenrock Green Building Forum, businesses talk regularly about how to reduce electricity use. This is a no-brainer for the facilities managers around the table; reducing energy use reduces the cost of running the building.
The stories we hear are consistent with case studies from around the world, which show that investments in energy efficiency generally pay back in less than a year and can reduce the running costs of a building by 30 per cent. The Government also has a role in supporting this with incentives and with policy — for example, introducing energy efficiency standards for buildings. Energy efficiency is an area where the Government, the largest user of electricity on the island, could and should lead the way with efficiency improvements in its buildings and schools — we pay these bills, and this added demand has further cost implications, which I will now discuss.
There is a double benefit to energy efficiency: not only does it immediately reduce our bills, but it also reduces the need for new generating capacity. The consultants’ report on liquefied natural gas, tabled in Parliament on March 21, identified that although our existing electricity plant is ageing, retrofitting to liquefied petroleum gas or LNG is likely to extend the life of the plant, reducing the need for expensive investment in new generating capacity. Reducing overall electricity demand through energy efficiency will further reduce the need for investment.
The next step is to invest in renewable energy generation, but this is as much a political question as it is an economic or technical question. Renewable energy challenges the economics of the present system by distributing ownership of electricity generation to individuals, small businesses and medium-sized commercial enterprises. Renewable energy does not behave the same as a traditional, massive electricity plant: natural energy sources are often intermittent and produce uneven voltage, requiring technical investment in the grid, a cost that will likely fall on Belco. Our energy sector is adversarial and competitive, which makes it difficult to solve the technical problems and to agree how to share the costs and benefits. We will need a level of co-operation and understanding, as well as, perhaps, regulatory pressure, for a solution that works smoothly.
The third step is to invest in sophisticated information technology: distributed electricity — eg, solar panels on every roof — means that the grid will need to become an information network, where electrons move in all directions as needed. Professor McDermott points out that “taking advantage of technologies facilitated by the communications and computing revolution would allow us to optimise the flow and to co-operate to smooth demand and develop pricing, which responds dynamically to market signals”.
For example, in New York, residents of city blocks can sell power to each other, potentially turning their homes into revenue sources. In Bermuda, distributed energy has the potential to make us more resilient in the face of storms and hurricanes, reducing the damage if a central plant is affected by weather. Microgrids and three-dimensional flows of electrons and information present not only an economic, but a social challenge — leases may have to be rewritten to allow building owners and tenants to share the value of renewable energy investment, and regulation will have to adapt as new ways of sharing costs and benefits emerge.
The good news is that moving to a sustainable energy system is incremental, unlike investing in a $250 million LNG system. As long as we agree on the direction we are going, we do not have to do it all at once: we can all work on energy efficiency to reduce the need to build a new plant, while building renewable energy installations and developing the pricing and regulatory structures to support them. As Belco’s Pembroke power plant ages and generators are retired, we can increase the investment in battery storage — or other forms of energy storage — and in communications technology, which will allow us to co-operate to collectively address our energy issues.
To return to the theme of the previous article: it should be clear by now that this is a co-operative exercise. We need to agree on a vision and work as a team under committed leadership. An effective transition will require Bermuda to gather decision-makers and to access input from all sectors. We do know that the renewable energy as a primary source of electricity is already working in other jurisdictions, without blowing the budget, so it is feasible for us.
Any threat to the status quo carries with it elements of social, political and economic risk, often unevenly distributed in the population, and so people from all sectors will resist change.
But is there any other sector on the island where we would agree that doing the same thing we have been doing for 100 years is the sensible way forward? The pathway to a sustainable energy future is clear; we just need to agree as a community to step on to it.
Judith Landsberg has a PhD in physics and a master’s degree in environmental management. She is also a director of Greenrock and has been involved in energy problem-solving and energy advocacy in Bermuda for the past four years
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