Our energy future could pay dividends for Bermudians
The world is unmistakably moving towards a future that involves more environmentally sustainable methods of generating electricity.
There is an opportunity for Bermuda not just to become more environmentally active, but also for all Bermudians to become engaged and financially rewarded for it.
With Belco's strategic plan, it is more business as usual. Included are volatile electricity rates tied to importation of foreign fuel oil and liquefied natural gas — not to mention foreign ownership of LNG infrastructure — alongside locking in the natural monopoly with favourable policies, rates, share buybacks and dividends flowing in.
Where is the competition? Where are the alternative options?
There is one so far that was put forward by a local and foreign partnership that outlines a different, more sustainable path.
Their plan would bring us in line with the rest of the Caribbean and the world for diversifying into proven renewable sources such as solar and wind, and with the addition of public participation could result in something unprecedented for Bermudians and the economy.
The first and biggest challenge I see with fossil fuels being used for power generation and transportation is that our economy sends tens of millions of local, hard-earned money overseas every year to purchase fuel.
This money never comes back, and every year that opportunity cost is compounded.
So how do we reduce this effect and slow the leak? We need local sources of energy.
We have fantastic amounts of sunlight throughout the year and heavily researched wind resources — both generally better here than in many countries already implementing both technologies.
The Government receives significant revenues from tax on fuel imports at present, so we would also need to shift to a per kilowatt-hour tax to simplify and guarantee the present income to the Government — infrastructure is already in place.
Every kWh that we can produce through local sources is money we don't send overseas.
After initial capital costs and generally low maintenance, solar and wind energy is not in excess of $85 per barrel now — or more than $60 million in total in 2017. It's free.
The next challenge that would negate the first is if the company that installed the solar and wind was majority-owned by a foreign entity.
This becomes the same problem: locally sourced profit from power generation would be sent overseas and lost for ever.
Bermudians would gain on the environment and likely lower rates, but still lose millions from the economy.
What I do know is that Bermudians young and old are interested in our energy future.
What I also know is many Bermudians and Bermudian companies are both savvy investors and want to be involved in our island's success.
So the answer is simple: allow Bermudians to provide the capital for the solar and wind projects, and in return they become the shareholders who gain from the profits for decades to come.
Not just for profits, but they become engaged and incentivised to learn about energy and finance, and could reduce their own electricity consumption — a huge factor in reducing our environmental footprint — to reduce personal expenditure, create a base load for fossil fuel use, and benefit further from the shareholding returns.
It's a win-win scenario.
Who gets to buy in? This new power company could start with a Bermudian-only initial public offering on the Bermuda Stock Exchange.
Allow any Bermudian with savings in their bank account to buy shares up front — whether it's $1,000 or $100,000 — and then allow local companies to purchase an interest.
With the right independent team, I can almost guarantee this venture will have funding into the tens of millions within weeks and will pique the interest and engagement of almost everyone.
All of that ownership means profits would circulate back into the local economy.
Here's a further concept for debate: the Bermuda Government should not be involved in ownership, but could initially put in at least $10 million from the Department of Public Works' budget — a few weeks' equivalent of that department's expenditure — and issue its investment shares to the Bermuda Pension Fund, which badly needs it, or equally to every Bermudian.
Alternatively, those shares could be issued to a sovereign wealth fund for the benefit of all Bermudians without government or political involvement.
A drop in the bucket for a real and direct return.
You might ask: what about Belco's construction of its $119 million North Power Station? For years Belco has been operating existing generators past their expiration date, 80 megawatts' worth, and arguably should have replaced them by now through normal operations.
This is another discussion, for sure.
The future of energy generation in Bermuda will continue to require fossil fuels to handle the base load and to back up renewable sources.
So with continuing replacement and future demand requiring a functioning fossil fuel station, this development and Belco are still absolutely necessary and would become an essential part of the overall plan.
Overall, I would love to see Bermudians invested in something so critical to our everyday lives and so important to the future of our country and environment. This is a way to get everyone informed, excited and involved.
If successful, why not expand its reach to encompass further investments of national interest: revamp Tynes Bay into a modern waste-to-energy plant capable of handling city sewage and horticultural waste — reducing sewage balls and turning Marsh Folly into a public park, at last — electrify public and private transportation and more.
With the right team and structure, we can invest in ourselves and reap the lifestyle and financial rewards.
Let's stop throwing our dollars to the few and foreign.
Allow Bermudians to take an active role in our energy future and be a wealthier country for it.
• Connor Burns is a Bermudian mechanical engineer with almost ten years of business development and engineering experience in the construction industry, drone operations, and software and start-up companies