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Belco files study on power sector’s future

Bermuda faces some important decisions on how to power itself over the next 20 years — and Belco today put forward detailed findings on the most likely energy-mix options to help the island decide.

The Intergrated Resource Plan, which Belco as the electricity utility is required by law to produce and update periodically, lays out several choices on how Bermuda can meet its power needs, backed by in-depth analysis.

The IRP was presented today to the Energy Commission and will be passed onto Regulatory Authority, which is soon to take over repsonsibilities as the electricity regulator. The document will provide the basis for a debate on the power supply of the future.

The 126-page study describes seven scenarios, evaluating them economically and by a range of qualitative factors including supply quality, environmental sustainability, security and cost resilience, logistics and economic development.

Belco extracted the four scenarios that scored best as “the finalists”. The first two involved the use of liquefied natural gas as a new principal fuel for electricity generation, replacing heavy oil.

A full conversion to LNG ranked highest, while a partial conversion to LNG placed second. In third place was a partial conversion to liquefied petroleum gas, also known as propane. And the fourth finalist was continuing to use heavy oil as a principal fuel, an option that became more attractive after the collapse of global oil prices after the summer of 2014.

The energy mix that scored best involved transitioning to LNG as the primary fuel for electricity generation, implementing utility-scale solar renewable energy, battery energy storage and to support the intermittency of renewable generation, aggressive energy efficiency initiatives and wide promotion of conservation.

This scenario would require major infrastructure projects, including building a new LNG terminal to enable delivery and conversion of the compressed, liquefied fuel into natural gas, and a pipeline to deliver it to gas-burning generators at Belco's Pembroke plant.

Moves are already under way to realise one of the renewable elements. The Bermuda Government has made a request for proposals to build a utility-scale solar facility on land known as “The Finger”, near LF Wade International Airport.

The IRP was developed in consultation with American engineering consultants, Leidos Engineering LLC and Bridge Energy Group, a systems integration company focused on the utility industry.

As the study period covers the next 20 years, the scenarios include numerous assumptions and projections, on variables such as Bermuda's rate of economic growth and population, fuel prices, inflation, projected at 2.25 per cent for the period, and Belco's cost of capital, estimated at 9.75 per cent.

The study also took into account demand-side factors — what customers can do — in terms of generating electricity through solar panels or private generators.

Now the IRP has been submitted a consultation process will follow. This is designed to give the public the opportunity to have their say and any potential independent power producers the opportunity to challenge the plan.

The Regulatory Authority will be charged with overseeing the national debate and approving the IRP. Then the plan will be implemented by Belco.

The IRP process is designed to be repeated again and again over the years, to ensure the island has a modern and appropriate energy system to meet its evolving needs.

The IRP analysis takes into account the aims of the National Electricity Sector Policy, which was updated in 2015 and which aims for an electricity system that is high quality and delivered at least cost, environmentally sustainable, secure and affordable.

The policy envisages LNG as becoming the primary electricity-generating fuel, but sees as-yet undefined sources of renewable energy providing a quarter of the power supply by 2025.

Some potential sources of energy were not part of the mix options featured in the report.

“Belco recognises that there are a number of other supply- and demand-side generating resources that could be considered, such as fuel cell technology, offshore wind, biomass, landfill gas, ice storage and ocean power.

“However, for the purposes of the IRP the evaluation focuses on technologies and fuels that have been tested and proven, or display a high likelihood of technical and economic success.

“Belco continues to monitor ongoing developments and the feasibility of these and other technologies.”

Future of electricity: Belco has submitted its Integrated Resource Plan to the Energy Commission
<p>IRP’s seven scenarios</p>

Case 1: as a reference case, the status quo — fuel oil generation with no utility scale renewable energy, battery storage, or aggressive demand-side management, energy efficiency and conservation.

Case 2: aspirational mix — as contained in The National Electricity Sector Policy of Bermuda document including the conceptual use of future base load zero emissions technology.

Case 3: least cost — includes partial generation using Liquefied Petroleum Gas (LPG) with energy efficiency and conversation but no utility scale renewable energy, demand-side management or battery storage.

Case 4: full conversion to LNG — LNG to the central Belco plant with utility-scale renewable energy, battery storage, demand-side management and energy efficiency and conservation.

Case 5: fuel oil — with utility scale renewable, battery storage, demand-side management, energy efficiency and conservation.

Case 6: partial conversion to LPG — remote location for 60 megawatt LPG generation, diesel at Belco, utility-scale renewable energy, battery storage, demand-side management, energy efficiency and conservation.

Case 7: partial conversion to LNG — remote location for 50MW LNG generation, diesel at Belco, utility-scale renewable energy, demand-side management, energy efficiency and conservation.

The “finalists” are cases 4,5,6, and 7.

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Published June 30, 2016 at 4:35 pm (Updated June 30, 2016 at 4:35 pm)

Belco files study on power sector’s future

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