A mix of energy resources using natural gas as the principal generating fuel came out on top in an evaluation of the options for the future of Bermuda’s electricity supply.

This is revealed in the Integrated Resource Plan Proposal, which compares four different energy mixes to achieve the estimated power needs of the island over the next 20 years.

The natural gas scenario proved most expensive over the two-decade period as a whole, because of necessary investments in new infrastructure and engine conversions — but from 2031 it was the option producing the lowest-cost electricity because of its lower fuel costs.

However, the study does not specify what the different scenarios would mean in practice for customer rates.

Belco submitted the IRP Proposal to the Regulatory Authority in February, as the utility is required to do by law. Last week the RA published the 59-page document on its website and launched a consultation, which gives the public an opportunity to give feedback with a submissions deadline of July 2.

The RA staged the second of two town-hall meetings this week in Hamilton last night, to explain the importance of the plan for Bermuda’s energy sector and how the consultation process will work.

The proposal, produced by Belco in conjunction with US engineering consultants Leidos, compares four scenarios — pared down from seven in a 2016 initial study — and grades them economically and by a range of qualitative factors including supply quality, environmental sustainability, security and cost resilience, logistics and economic development.

The first scenario is the status quo, with fuel oil remaining the principal generating fuel. The other three scenarios all feature cost-effective utility-scale renewables as well as increased energy efficiency measures and increased adoption of electric vehicles, while each features a different principal fuel — fuel oil, natural gas or liquefied petroleum gas.

The natural gas scenario had a score of 96.9 per cent, edging out fuel oil plus renewables at 96.4 per cent, LPG at 95.5 per cent and the status quo at 94.8 per cent.

The proposal states: “Based on the overall scoring from the production cost dispatch analysis and the qualitative evaluation of base cases for the four scenarios, the full conversion to NG (Scenario 3) ranked highest.

“Additionally, the scores for all four base cases were tightly grouped, falling within 2.1 per cent of each other.”

The IRP Proposal adds that the preferred plan “will address key objectives related to cost of power, reliability of supply, exposure to high fuel cost, increased renewable resources, capability to burn diverse fuels and reduced carbon footprint”.

The report states: “While the NG scenario is more capital intensive than the other scenarios, it is less sensitive to increasing fuel commodity prices when compared to LPG or fuel oil scenarios.

“In addition, the NG scenario introduces the potential for NG to serve other uses in Bermuda via a piped distribution network.”

The proposal builds in many assumptions for the 20-year study period, such as fairly flat electricity demand, seen as closely correlated to economic growth, and average inflation of 2 per cent.

Analysis of the natural gas option assumes that liquefied natural gas would be shipped from the US, and that offloading, storage and regasification facilities would be built in St George’s, near existing fuel storage depots. A gas pipeline would also need to be built along the route of the existing fuel pipeline to Belco’s Pembroke plant. The new infrastructure would take about 3½ years to build, from the start of engineering and design work.

The LPG option would involve shipping in bulk ocean tankers from the US and the building of offloading and storage infrastructure, but transport to the Pembroke plant would be by road tanker.

Also mentioned in the IRP Proposal is the assumption of a new power plant at Marginal Wharf, as has been proposed by the Bermuda Land Development Company, to be operated by an independent power producer. Belco has included in the IRP Proposal a 1.5-mile pipeline for fuel delivery to the new power station, although the BLDC’s request for quotation for the new power station does not specify a type of fuel, nor a pipeline.

Renewables are expected to make up more than 18 per cent of the island’s energy supply mix within five years, by which time the new solar farm to be built on land near LF Wade International Airport, is expected to have come online. Continued growth in private solar installations is also taken into account.

Energy efficiency measures are expected to ease both peak and total energy demand over time. An expected increase in electric vehicle use is not expected to measurably impact peak demand, because of anticipated “charging and usage behaviours”.

After the consultation, the RA will analyse and take account of submissions, which may include proposals from alternative prospective power producers, as it finalises and approves a long-term energy plan for the island — something the regulator hopes to finalise before the end of this year.

The IRP is designed to be a living document to be revisited every few years to take account of new technologies and changing circumstances. A new IRP Proposal will be requested from the Transmission, Distribution and Retail licensee — which is Belco — every five years or less, with timing determined by the RA, in compliance with the Electricity Act 2016.

This article has been updated to reflect that the process is currently at the IRP Proposal stage. Following this 60-day public consultation stage and submission of additional generation proposals, the RA will then review and analyse submissions before drafting Bermuda’s Electricity Plan (the IRP). The IRP will be drafted and published by the RA.

• The IRP Proposal is attached to this webpage under the heading “Related Media”, together with related materials and the RA’s consultation document