By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Around one-third of Bahamas Power & Light’s (BPL) Family Island power generation capacity is “at or beyond the end of its life”, an Inter-American Development Bank (IDB) report revealed yesterday.

The multilateral lender, unveiling how its $170m energy transformation loan will be used, said 155 megawatts (MW) of BPL generation capacity spread across the Out Islands was either in “poor to moderate” condition and in dire need of replacement.

With the state-owned utility monopoly facing ever-increasing generation woes both inside and outside New Providence, the IDB report said this further exposed the need for “a structural change-of-course” within a Bahamian energy sector that has achieved just 0.3 percent renewable penetration to-date according to sector regulators.

“According to BPL, approximately one-third of the total fossil fuel-based generation capacity in the Family Islands (155MW) is in poor-to-moderate condition at or beyond end of life. The percentage of renewable energy in the system is virtually zero, and the existing diesel plants present safety hazards and lack preparedness to natural disasters,” the IDB warned.

“Due to the remote nature and sparse population, the provision of a sustainable electricity service in the Family Islands has been a challenge for the local power utility compared to other central and more populated islands such as New Providence.

“According to the last population census in 2010 more than 53,000 (just over 15 percent of total population in The Bahamas) lived in the Family Islands, Abaco being the most populated. This fact has implications in terms of cost of service, reliability and power quality.”

The report added that The Bahamas had failed to tap into the “excellent solar PV (photovoltaic) potential some of the Family Islands display”, pegging this at greater than a 1,700 kilowatt hour (KWh) peak per year.

“This is the case of Exuma, one of the most attractive islands of the Bahamian archipelago, and a top destination for tourism,” the IDB said. “It is also expected that a higher load demand from future hotels and associated infrastructure (new planned airport) could further stress the power network and increase system costs. The generation cost of electricity in Exuma is one of the highest in the Caribbean (26 cents per kWh).”

Noting that The Bahamas’ efforts to generate greater renewable penetration of its energy mix had met with little to no success to-date, the IDB said a seismic shift was required if this nation was to meet its pledges to the Paris Climate Agreement.

“The regulating Utilities Regulation and Competition Authority (URCA) issued in 2016 the regulation for the SSRG (Small Scale Renewable Generation initiative), which allows consumers to install generation in their premises of up to 100 kW solar PV generation capacity in New Providence and Paradise Island; 50 kW in Abaco, Eleuthera and Exuma; and 30 kW and 10 kW in other Family Islands,” URCA said.

“In March 2019, URCA noted that renewable energy installation was up to 2.1 MW, and revealed there has been a ‘relatively slow’ take-up of the SSRG programme. These installations represent a 0.3 percent renewable energy penetration.

“The Bahamas needs a structural change-of-course to achieve its nationally determined contributions (NDCs) associated with the Paris Agreement that has a target of meeting 30 percent of its electricity needs with renewable resources by 2030. Mass deployment of utility-scale and distributed solar generation is the clearest path to achieving this target.”

The IDB paper added that the devastation inflicted by Hurricane Dorian on Abaco and east Grand Bahama had given The Bahamas “an historic opportunity to transform its energy sector by addressing structural challenges that have made electricity costly and unreliable, constraining economic growth and dampening the quality of life for its population”.

The IDB plans to allocate $80m, or just under half of the total $170m, to first phase reforms. Some $50.679m will be allocated to the development of more resilient and renewable energy infrastructure in Grand Bahama and Abaco, with a further $25.75m going on “reliable and renewable energy” in both New Providence and the Family Islands.

BPL’s costs to restore Abaco’s transmission and distribution (T&D) infrastructure alone were pegged at $80.4m, with Grand Bahama Power Company requiring a $21m outlay to deal with its flooded power plant on Peel Street in Freeport.

“According to the damage and loss assessment following Hurricane Dorian, the power sector experienced 54 percent of the total infrastructure impacts sustained, with Abaco facing 87 percent and GB 13 percent of the total power sector damages estimated at US$206m,” the IDB report said.

“The most impacted assets in the power sector were the T&D networks on Abaco ($80.4m), a flooded power generation plant on Grand Bahama ($21m) and complete destruction of T&D in East Grand Bahama.”

It added: “The electricity system in The Bahamas was already vulnerable, and faced structural challenges, even before the hurricane. Overwhelming dependence on imported fossil fuels represents a costly and unsustainable burden on Bahamian households and businesses.”

“Electricity service disruptions weigh on productivity and competitiveness, limit private investment and reduce quality of life for Bahamians. In 2019, The Bahamas ranked 119 out of 190 countries in the Doing Business Index, and 81 in the ‘Getting Electricity’ ranking with a score of five out of eight in the reliability of supply and transparency of tariff indicators.”

Turning to Abaco, the IDB report added: “More than 75 percent of all dwellings on the island were somehow affected by Dorian. Approximately 57 percent of the houses were severely damaged. Most of the electricity T&D infrastructure in those areas needs to be rebuilt, and BPL estimates that a total of about 1,000 transmission or distribution poles and more than 90 percent of the transformers in these areas were destroyed or damaged.”