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Belco offers options for future power supply

Future of electricity: Belco has submitted its Integrated Resource Plan to the Energy Commission

Bermudians will have their say on the future of the island’s electricity supply after Belco yesterday submitted its analysis of the options for the next 20 years.

The utility filed its Integrated Resource Plan with the Energy Commission, laying out the most feasible energy mix solutions.

It was the first step in a process designed to spark a national debate on the electricity sector’s way forward.

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

The Energy Commission will soon hand over oversight of the electricity sector to the Regulatory Authority, which will be charged with gathering public input and the views of independent power producers. The RA will eventually approve the plan and send it back to Belco for implementation.

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.

Denton Williams, Belco’s chief operating officer, urged the public to study the IRP and to take the opportunity to have their say and added that this was not a one-off.

“The most important thing is for the public to be part of the dialogue in choosing which of the options the island pursues to go forward,” Mr Williams said.

“This is not a single shot to solve all the challenges of the electricity sector for the next 20 years. The IRP is designed to be a living document that we will revisit every few years to take account of new technology and new ways of doing things, so we can adjust the plan as necessary to keep on the right path.”

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 matters 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 their own generators.

Among the four “finalists”, a mix involving a full conversion to LNG ranked highest, while a partial conversion to LNG placed second. Third best 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 option of full conversion to LNG as the primary fuel for electricity generation included 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.

Mr Williams said Belco was not permitted to speak to any of the parties putting forward proposals for the site. But he added that there was interest in the project from another subsidiary of Belco’s parent company, Ascendant Group.

The time frame for the handover of responsibilities from the Energy Commission to the Regulatory Authority, or the consultation process for the IRP has yet to be announced.

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,” Belco stated.

“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.”

<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 conservation 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.