Renewable targets slashed in national energy policy proposal
The Government plans to abandon its target for the island to produce 85 per cent of its energy from renewable sources by 2035 and instead expects to produce 93 per cent from fossil fuels in 2030.
The about-turn was announced in a consultation paper produced for the renewal of its national energy policy which suggests the Government’s guiding principle will be cost, reliability and equal access.
Bermuda’s renewed National Electricity Sector Policy said the new targets were more realistic than the 2035 targets set out in the 2019 Integrated Resource Plan following publication of the 2015 energy policy.
The Ministry of Home Affairs described the new policy as “one of the most consequential undertakings now shaping Bermuda’s future”.
It sets out a plan to increase the country’s renewable targets from 7 per cent in 2030 to 35 per cent by 2040 and to 50 per cent by 2050.
The policy remains “technology-agnostic”, seeking all energy generation options on the basis of “affordability, reliability and equity” through a framework to be in place until 2045.
It seeks to implement a new tariff system to ensure households dependent on the grid are not financially disadvantaged by price hikes influenced by the increase in renewable generation.
It also seeks the promotion of electric vehicles, with renewable energy deployment only proceeding where technologies are “cost-competitive” and reliable.
The policy released this week updates the 2015 iteration setting a target of 38 per cent of renewable generation by 2035 through technologies such as solar, offshore wind and emerging renewable sources.
Approved by the Regulatory Authority, the 2019 IRP set out a clear plan to embrace offshore wind and solar technologies.
However, speaking to the realities facing the island today, the new policy said: “As a small island with no interconnection to neighbouring grids, Bermuda faces unique challenges in delivering reliable and affordable electricity while reducing its dependence on imported, carbon-intensive fossil fuels …
“The practical constraints facing an isolated grid must be acknowledged. The intermittency of renewable generation, grid stability requirements, land constraints and the high costs of certain technologies present real challenges for Bermuda.
“While renewable energy must continue to play a growing role in the energy mix, the transition must be carefully managed to avoid imposing unsustainable costs on consumers or compromising the reliability and resilience of electricity supply.”
It highlighted a potential 16 megawatts of onshore solar, 80 megawatts of floating solar, 60 megawatts of onshore wind and 35 megawatts of distributed solar.
Explaining the shift from previous renewable targets, the policy stated that since 2015, Bermuda had experienced several structural changes that have “reshaped the electricity landscape”.
The document cited persistent increases in fuel costs, rising costs associated with regulatory compliance and sector administration, and the continued expansion of distributed generation, in particular rooftop solar.
While the expansion of renewables had created opportunities for “energy autonomy”, the policy stated it had also eroded sales for the utility company Belco which, along with rocky global fuel prices, “placed sustained upward pressure on electricity tariffs” for grid-reliant customers.
The document acknowledged Bermuda’s electricity tariffs as topping developed nations within the Caribbean region, which it attributed to global fuel price volatility, the high fixed system costs and the absence of regional interconnection.
The 2015 policy recognised that renewable energy alone could not meet Bermuda’s needs.
Accordingly, transitional low carbon fuels such as liquid natural gas, LNG, were identified as potential substitutes for heavy fuel oil or HFO, enabling emissions reductions while facilitating the gradual integration of intermittent renewable technologies.
Belco’s IRP proposal concluded that conversion of the company’s North Power Station and other suitable existing assets to LNG represented the most cost-effective strategy.
However, the RA-approved IRP rejected LNG conversion — instead recommending an accelerated transition towards renewable energy generation.
The new policy document said this went against the 2015 policy, which it attributed to a change in Government in 2017 “with the new administration placing greater emphasis on environmental sustainability and rapid renewable energy deployment”.
This, it said, placed uncertainty on the best transition route for Bermuda.
Belco said it welcomed the renewed National Electricity Sector Policy.
Wayne Caines, the company’s president, said its emphasis on affordability, reliability and sustainability reflected the realities of the sector.
He said: “A measured, evidence-based approach to integrating new technologies will help protect grid stability and customer affordability.
“On cost management, we believe every sector must carry its fair share of the weight. Sustainable progress cannot rest on any single party, and the policy framework must ensure that costs and responsibilities are distributed equitably across all electricity users and generators. Importantly, that principle of equitable regulation should extend to all sources of electricity generation, including solar photovoltaic.”
Mr Caines commended the policy for having a “balanced foundation for meaningful progress”.
He added that Belco supports the policy's commitment to “right-sizing” the energy transition, recognising Bermuda's limited land, lack of interconnection and exposure to volatile global fuel markets.
“Realistic targets and achievable timelines are essential to delivering real emissions reductions while managing costs and maintaining system reliability,” he said.
Mr Caines said that Belco looked forward to working with the Government and others to “chart a path for a reliable, sustainable and affordable energy future”.
He thanked the Energy Policy Steering Committee and encouraged the public to review the consultation documents.
It said the retail tariff methodology implemented by the RA following the 2015 policy allowed Belco to recover its fixed costs regardless of declining sales, contributing to increased costs to the customer.
It suggested that customers dependent on the grid would not be disadvantaged by the growth of distributed generation with a tariff design ensuring “fair allocation of system costs, particularly fixed costs”.
Seeking only the most cost-competitive renewable technologies, it said government land and seabed resources may be made available at low cost.
Electric vehicles would be promoted “as mechanisms to increase electricity sales, reduce fossil fuel imports and spread fixed system costs across a broader customer base”.
Legislative amendments to the Electricity Act 2016 would also be required to facilitate the resale of electricity for EV charging purposes, the document said.
Furthermore, it said renewable energy installers would be licensed and certified under “nationally recognised standards”, while an integrated energy planning and delivery approach would be taken through partnerships between government ministries and departments, to ensure alignment between infrastructure, land use, climate and economic development objectives.
On regulation, the policy said there would be enhanced co-ordination between the Ministry of Home Affairs, which deals with energy policy, and the RA.
The policy said the creation of a new Community and Co-operative Energy Licence, to be issued and regulated by the RA, would seek to encourage local investment and ownership in renewable energy generation.
It said the Government would consider policy measures such as establishing communal solar projects where participants can subscribe to shares in larger solar facilities and get credits on their electricity bill, as well as loans and credit guarantees supporting residential and small business installations.
The policy position states: “Given Bermuda’s geographic and resource constraints, the near to medium-term energy strategy will prioritise the expansion of solar and energy storage as the primary pathways for achieving renewable energy targets.
“Green hydrogen, wind and biomass technologies may be reconsidered only if future technological advancements significantly improve their cost effectiveness and resource requirements.
“Waste-to-energy will remain part of Bermuda’s essential infrastructure portfolio, guided by the principle of environmental stewardship, system reliability and fiscal responsibility.”
It said that grid-scale battery storage was a principal component of modernisation to capture excess solar output during the day and dispatch it in the evening peak.
The policy gave scant mention to LNG, a generation source that Belco president Wayne Caines last year said the company “desperately” hoped to get approval for.
The policy’s technology-neutral focus leaves the door open for all options that reduce costs.
Emissions and soot fallout from Belco’s North Power Station, which were said by Mr Caines to have been the result of burning heavy fuel oil, Belco’s main fossil fuel of choice, on engines optimised for LNG, were not detailed in the report.
Ricardo Energy & Environment, a British-based global environmental consultancy firm, advised ahead of the 2019 IRP that the “most effective” way to mitigate Belco’s soot emissions would be for the plant to burn a lower-polluting fuel.
The Clean Air Amendment Act 2024 was brought in to set standards that meet or exceed UK and EU targets for reducing pollutant emissions.
The new energy policy said the Ministry of Public Works, through the Department of Environment and Natural Resources, would work closely with the Department of Energy and the RA to integrate environmental standards, emissions data and climate resilience.
Feedback on the policy can be submitted at forum.gov.bm/en/projects/nesp-2026. Consultation ends on May 4.
• To read the policy, see Related Media
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