By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Prime Minister yesterday revealed the Government is targeting a further 20 percent reduction in electricity costs to below $0.20 per kilowatt hour via a combination of renewable energy and liquefied natural gas (LNG) related reforms.

Philip Davis QC, addressing the House of Assembly while unveiling the 2022-2023 Budget, said his administration is essentially picking up where its Minnis predecessor left off by seeking independent power producers (IPPs) from the private sector who will supply Bahamas Power & Light (BPL) with energy generated by solar power and LNG.

No mention was made of where negotiations with Shell North America over the proposed new Clifton power plant and LNG terminal, left behind by the former administration, stand. Neither did BPL’s proposed $535m rate reduction bond (RRB) refinancing feature, but the Prime Minister pledged to mitigate the impact of high global oil prices on Bahamian energy costs.

The rise in global prices to over $100 per barrel as a result of Russia’s Ukraine invasion means BPL faces higher fuel prices should it seek to continue its hedging strategy after July 1, regardless of whether or not it executed the option trades due last September and October under the existing arrangement.

“My government is committed to alleviating and addressing, in a more sustainable manner, the firming trend in global prices including the impact of higher fuel prices on electricity costs,” Mr Davis said, adding that Alfred Sears QC, minister of works and public utilities, will address BPL’s plans “to secure greater operational efficiency” during the Budget debate.

“This will be achieved, in part, by leveraging independent power providers to bring to The Bahamas generation powered by solar power or natural gas,” the Prime Minister added. “Our commitment to energy reform and lowering the cost of electricity to Bahamians across the board is more than just talk.

“The Government shortly on coming to office appointed a Cabinet energy sub-committee that has been focused on advancing our commitment in the Blueprint for Change to transform to LNG-powered generation. The sub-committee is advanced in discussions with providers to develop an LNG bunkering facility, LNG conversion of our generation and incorporating solar solutions.

“It is expected that these initiatives will keep the long-term average cost of electricity below $0.20 per Kwh for The Bahamas, which is a 20 percent reduction from the current levels. We look to have a definitive agreed framework this fiscal year to announce to the Bahamian people.”

Acknowledging that the high cost and unreliability of energy supply are a major impediment to the ease of conducting business in The Bahamas, Mr Davis planned to employ an $80m Inter-American Development Bank (IDB) loan agreed under the Minnis administration to deepen renewable energy penetration.

“The immediate focus is the introduction and implementation of new models to develop resilient solar PV (photovoltaic) installations in The Bahamas. To accomplish this an assessment of energy systems in New Providence and the Family Islands will need to be done. This work will start in the southeastern islands, namely Inagua, Mayaguana, Acklins, Crooked Island and Long Cay,” the Prime Minister added.

“This year we will deploy in those islands public decentralised solar PV plants; rooftop systems and innovative microgrids with storage capacity; and grid modernisation technologies to improve the reliability and resiliency of the power network on these islands.

“Additionally, pilot installations of solar photovoltaic systems on public buildings in Andros will also be carried out. Thereafter, the installations of solar photovoltaic systems will be extended to the central and northern Bahamas.”

Turning to food security, and the Government’s efforts to fight inflation by lowering a range of food-related import tariffs, Mr Davis said: “We also recognise that an important part of our tourism experience is our unique culinary products, and we need to ensure that the sector remains competitive. We have also therefore reduced the duty on food items used mostly in the restaurant and tourism sector.

“Among the list of foods are those produced locally, such as chicken parts. Local production of chicken is less than 5 percent of total consumption, but we want and need to expand local production of all agriculture products. In this regard, the Government will provide support to local poultry producers by assisting in lowering the cost of electricity, one of the primary inputs in organised poultry production.”

He continued: “In the new Budget, we are continuing to provide support to farms by allocating $500,000 to secure broilers, and $600,000 in the form of livestock to increase the supply of fresh meats in the market. We are investing $300,000 to restore the feed mill at our Gladstone Road location to ensure that farmers have ample domestic supply of feed for livestock, and we are also providing $500,000 in grant support to farmers.

“Through the use of modern technology and resources, which we have in abundance, we plan to reduce our food import bills. This, Madam Speaker, is how you ensure food security. This, Madam Speaker, is how you ensure food sovereignty. This, Madam Speaker, is how we will feed our nation and bring down the cost of living.”