By FAY SIMMONS

Tribune Business Reporter

jsimmons@tribunemedia.net

A 30-YEAR power purchase agreement will allow BPL to increase generation capacity and improve reliability for businesses and residents, according to Minister of Energy and Transport JoBeth Coleby-Davis.

Speaking in Parliament yesterday, Mrs Coleby-Davis gave an update on the country’s energy reforms and noted that the two dual fuel engines commissioned on Tuesday were due to a 30-year public private partnership (PPP) between Bahamas Power and Light (BPL) and Bahamas Utilities Holdings (BUH).

The Power Purchase Agreeement (PPA) included key performance indicators and penalties for non-performance as well as provisions to lock in rates.

Mrs Coleby Davis maintained the engines are not being rented by BPL and the utility has the opportunity to fully purchase the engines once the company is in a “stronger financial position”.

“The engines are not being rented by BPL. It is a power purchase agreement which includes the cost of fuel and the capacity, not a rental,” said Mrs Coleby-Davis.

“Nothing has been divested out of the hands of BPL. In these agreements, there is opportunities for when BPL gets in a better and a stronger financial position for them to take over full ownership and control of that portion of generation, albeit whether they do it through that relationship or through them getting the necessary capacity that they need to generate on their own.”

Mrs Coleby-Davis said all existing Bahamas Utilities Company (BUC) plants will be removed from the current rental arrangement and placed under the PPA.

Those engines, with the exception of the Hyundai plant, will be converted to LNG by June 2025 and the Hyundai plant will be redundant capacity once the other units are online.

She said the Hyundai plant will only be operated in “extreme extenuating circumstances” to increase generation capacity.

“Our strategy also calls for all existing BUC plants to be moved from rental arrangement and placed under the PPA. So all that was presently under rental will also transfer under the structure in this PPA,” said Mrs Coleby-Davis.

“One BUC engine will eventually be converted to LNG, the Hyundai plant, however, is not capable of conversion and will remain on diesel or HFO. Once the combined cycle with steam engine plant is complete, the Hyundai plant will be redundant capacity. So only if there’s extreme extenuating circumstances that we need that extra generating capacity will we have to turn to the Hyundai plant. The intent is for us to fully operate all of those engines under the PPA, on LNG or in the combined cycle with steam producing generation.”

Mrs Coleby-Davis said the two new turbine engines are 35 percent more efficient than the current engines and will use less fuel leading to cost savings for businesses and residences.

“The engines are 35 percent more efficient than the older turbines that are currently being used,” said Mrs Coleby Davis.

“These efficiencies that we talk about when we talk about engines, it means that the engines don’t have to work as hard to produce the necessary power. That means it does not use the amount of fuel that you may see our older engines currently using because of the strain on them presently. This will have tremendous cost fuel savings for our consumers, and also reduce the cost to BPL. The engines allow for dual fuel technology, which will enhance operational flexibility. However, by June 2025 the engines will run solely on LNG.”