By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Nassau Container Port operator yesterday said it is targeting a further 40 per cent cost reduction from its renewable energy initiatives, which it believes will lead to further growth opportunities.

Michael Maura, Arawak Port Development Company's (APD) chief executive, told Tribune Business the country had already expressed its interest in becoming an independent power producer (IPP) to Bahamas Power & Light (BPL).

He explained that the 110,000 square foot roof at APD's Gladstone Freight Terminal (GFT) could accommodate enough solar panels to generate 0.7 Mega Watts (MW) of energy - a capacity far greater than its own power needs.

Mr Maura said APD was thus interested in selling the excess energy back to BPL's grid, but acknowledged that the regulatory framework was still trying to catch up with the pace set by the BISX-listed port operator and others.

He also expressed optimism that the renewable energy partnership established with the Inter-American Development Bank (IDB) could pave the way for APD to access international growth opportunities.

Mr Maura said the IDB and its affiliates had affirmed APD as a "top tier" company through the extensive due diligence they conducted before providing the company with the $3 million loan now financing its renewable energy initiatives.

As a result he expressed hope that, with the IDB heavily involved in the Caribbean maritime sector, APD would frequently find itself being shortlisted for regional port project tenders.

The $3 million loan from the Inter-American Investment Corporation (IIC), the IDB arm that finances the private sector, has already assisted the installation of a 36 Kilowatt (KW) system on the roof of APD's main administration building at Arawak Cay.

That, according to the IIC, is the first step in a broader initiative designed to slash APD's annual energy consumption by 300,000 kilowatt hours (kWh).

"The project will finance the installation of a roof-top solar photovoltaic system on APD's main building at the port, as well as financing the retrofit of the port's terminal lights to LED, along with other energy efficiency activities at the port," the IIC said in a statement.

"The solar photovoltaic system will provide approximately 80,000 kWh over the course of its first year, and reduce the company's carbon footprint by decreasing consumption of electricity from the grid through an investment that generates zero-emission electricity.

"Once the LED conversion has been completed, the port anticipates a further reduction in fossil fuel power generation of 220,000 kWh each year, bringing the total annual reduction to approximately 300,000 kWh."

Achieving such reduction targets will ensure the $3 million loan rapidly pays for itself and more, with savings ultimately dropping to the 'bottom line' for the benefit of its shareholders - the shipping industry, the Government and private Bahamian investors.

Mr Maura told Tribune Business that APD's roof-top solar PV system had already slashed energy costs at the administration building by almost two-thirds, dropping them from $0.29 per kWh to $0.09-$0.10 per kwh.

The bulk of APD's savings will be generated when it replaces the port's existing lights with LEDs, and Mr Maura said: "We expect our energy costs to fall by [a further] 40 per cent.

"We have been looking for opportunities to reduce our dependence on oil, and obviously a step in the solar direction was the first step to make. We're hoping to expand our use of solar technology beyond what we're doing right now."

The APD chief executive said its partnership with the IDB/IIC had brought in an energy consultant, Hatch, which had conducted a full energy audit of the BISX-listed company's facilities.

Its ambitions, though, extend beyond the $3 million loan. "I can tell you that we've written specifically to BPL because we are interested in placing solar panels on the Gladstone Freight Terminal," Mr Maura told Tribune Business.

"That roof there is approximately 110,000 square feet, and could generate 700,000 kWh or 0.7 Mega Watts. That is something we're very interested in."

Such a solar PV facility would generate far more energy than the Gladstone Freight Terminal itself requires, meaning that the excess supply has to be sold to BPL's grid for any investment by APD to be economically viable.

Mr Maura said BPL, and possibly the Utilities Regulation and Competition Authority (URCA) as sector regulator, needed to confirm whether APD would receive credits or be paid for any excess energy sold to the grid.

"It's far more than we need, and we'd be putting it into the grid, so we need some compensation for that energy," he explained. "The only way we could justify that investment is by selling the power to BPL, so we would become an independent power producer.

"I don't believe BPL have reached the point where they're able to, or have the time, to come up with what the formula's going to be."

While APD waits to execute on that opportunity, Mr Maura said the company's credibility with the IDB could also open avenues for growth into the Caribbean.

"Through this process of working with the IDB, APD has gone through a very extensive due diligence exercise," he added. APD's governance, standard operating procedures, management and operations, and environmental policies all came under intense scrutiny.

"Through their due diligence they have determined we are the type of company they feel very comfortable partnering with and lending money to," Mr Maura told Tribune Business.

"This has put us on the list of regional top tier companies they would consider doing additional business with throughout the Caribbean.

"The IDB is very involved in the maritime sector in the Caribbean, and our hope would be we are a very easy company to shortlist and submit Requests for Proposals (RFPs) to.

Mr Maura said APD had elected not to invest in solar batteries yet, believing their costs will continue to fall.

"If they become more affordable and efficient, we will consider adding battery storage to our system," he said.