By NEIL HARTNELL
Tribune Business Editor
The Bahamas faces a "tall order" to meet the National Energy Policy's 30 percent renewable energy penetration by 2030 goal because it is "so far behind the curve", a local provider warned yesterday.
Guilden Gilbert, vice-president of Alternative Power Solutions (APS) Bahamas, told Tribune Business that this nation was likely at two percent with just a decade to go as he backed an Inter-American Development Bank (IDB) paper detailing the "governance and regulatory" obstacles to increased renewable take-up.
The paper, which has been obtained by Tribune Business, indicates that the government's interest in renewables has revived as a means to rebuild Abaco's energy sector after Hurricane Dorian "damaged or destroyed" 90 percent of that island's housing and infrastructure.
Dr Hubert Minnis, speaking to ambassadors from the Africa, Caribbean and Pacific (ACP) Group of States during this week's visit to Brussels, said initial damage assessments by the IDB and United Nations' Economic Commission for Latin America and the Caribbean (ECLAC) put the total damages inflicted by Dorian at $2.4bn.
Economic losses have been estimated at $700m, with an "additional cost" of $200m also thrown in, and the Prime Minister confirmed that The Bahamas' projected economic growth for 2019 had been cut in half to 1.1 percent.
The IDB paper reveals that some $50,000 of a $750,000 in funding being made available to The Bahamas to assist with renewable energy and institutional reform will be directed towards the "immediate rehabilitation" of Abaco's electricity infrastructure.
Another component, though, is targeted at regulatory strengthening and reform, and Mr Gilbert backed the IDB's assertion that continued flaws and weaknesses in this area continue to hold back the renewable energy industry and wider private sector.
"Market governance and regulatory-related challenges continue to be among the hindrances to the implementation of several energy projects, especially with respect to renewable energy and private sector participation," the IDB said.
"The Bahamas ranks lowest in the region for renewable energy penetration in its generation mix despite of possessing ample renewable energy resources. Accelerating the transition to a renewables-based energy system represents a unique opportunity for The Bahamas and other Caribbean countries to meet climate change mitigation goals while fueling economic growth, creating new employment opportunities and enhancing human welfare."
While the IDB noted the National Energy Policy's goal of renewables accounting for 30 percent of this country's generation mix by 2030, Mr Gilbert told Tribune Business: "I don't see The Bahamas getting there because it's so far behind the curve.
"I think the penetration is still probably less than 5 percent in total. I don't think we've reached 10 percent as yet. We're going into 2020, so that gives us 10 years to do another 25-27 percent. That's a fairly tall order. I would definitely say The Bahamas is way behind where it should be.
"I believe BPL's generation capacity for New Providence was 270 MW. Thirty percent of 270 MW is 81 MW. To get 81 MW in 10 years will be a fairly tall order, especially if it is less than 10 percent now. Ten percent is 27 MW and I don't think we're anywhere near that in the renewable industry. I guess we're maybe at 5 MW, 6 MW at the top end. That puts us at 2 percent."
The IDB paper highlighted the main risk to its proposed energy intervention as "the lack of expertise" in the key agencies responsible for regulating/facilitating renewable energy in The Bahamas, namely BPL, the Ministry of Works and the Ministry of the Environment.
"A potential risk.... is related to the lack of expertise to support key interventions required by energy actors in a timely fashion," the IDB said. "The designation of a full-time technical expert dedicated to advising the Ministry of Finance and BPL on energy planning, governance and renewable energy co-ordination to move forward the agenda will help mitigate this risk. Another general risk is the lack of understanding of renewable energy issues, which causes delays and a lack of buy-in on key energy activities."
Backing this aspect of the IDB's findings, Mr Gilbert said the unfriendly regulatory environment had been further exposed by the ongoing Utilities Regulation and Competition Authority (URCA) consultation over the proposed "buy all, sell all" approach for compensating renewable energy self-generation (RESG) systems that want to tie-in and sell excess power to BPL.
This approach, according to URCA, means that homeowners and businesses will not be able to consume any electricity generated by their renewable systems. They will instead have to export all energy they generate to BPL, and consume all the electricity they need from the state-owned monopoly at the standard retail tariff levied on all its customers, receiving the equivalent of the utility's fuel charge as compensation.
"The latest URCA consultation makes it abundantly clear there's no real interest in commercial scale solar," Mr Gilbert told Tribune Business. "It's even looking to frustrate residential solar. Why am I going to invest $30,000-$40,000 to put solar systems in my house when I can't get access to it. It makes no sense.
"Our view on what is being proposed by URCA is it's really a way for the utility to have solar input but they don't have to pay for it. They don't have to come up with the capital expense of installation. They'll put it on residential and commercial customers to install the systems and get full access to the power without having to pay the cost of installation.
"The entire document seeks to protect BPL rather than force them to become efficient. It allows the status quo. It's protecting BPL. Everywhere else in the world utilities are open to receiving power and paying a fair rate. I agree with the IDB that the regulatory and institutional support is not in place. Not by a long way."
Comparing The Bahamas to its Caribbean rivals, Mr Gilbert said Jamaica was in the process of finishing - or had even completed - a 30 MW solar photovoltaic plant. He argued that The Bahamas needed to follow suit by executing rather than just talking.
Mr Gilbert said he had several clients exploring the possibility of developing "fairly sizeable" utility-scale plants in The Bahamas, but these were all in the early stages and no decision on whether to proceed had been taken.