Ever since the 1907 Electric light Act was passed the Bahamas has been struggling to keep up with the demand for power.
Our first power plant was at Vendue House on Bay Street. And this historic building remained a BEC facility until recent years when it was converted to the Pompey Museum.
The first big expansion of the capital's electricity grid was in 1922. But even as late as the 1960s more than a quarter of Nassau households were without power and most Out Island communities relied on portable generators or kerosene lamps.
During the 1990s BEC borrowed almost $100 million to expand the power supply. And electrification of all the major inhabited islands was completed by the end of the decade.
At that point, there was talk of divesting the utility, as many other countries in the region have already done. BEC's privatization was to follow the BaTelCo sell-off, which, as we all know to our eternal damnation, never happened.
Today, BEC still finds it difficult to satisfy electricity demand at a reasonable price – despite the investment of hundreds of millions of tax dollars over the years. And we have to spend about $90 million a year to buy fuel for the 15 generators on New Providence alone.
Natural Gas – A Burning Issue
Also at great expense, BEC is replacing its older generators with more efficient gas turbines, which can run on either diesel or natural gas. This could be useful if proposed liquified natural gas facilities are developed here, as is widely expected.
"That's a possibility if the LNG terminals are built," BEC's energy czar Da Costa Bethel told Tough Call recently. "Supplying BEC with natural gas is one of the things we are looking at."
But right now, all of of our energy comes from oil, and so does over 90 per cent of the energy produced throughout the Caribbean. Trinidad is the only regional country with significant oil resources. And these are expected to run out within a decade, although it's natural gas reserves could last 60 more years.
By all accounts, gas will surpass oil as Trinidad's main revenue earner very soon. And as we noted earlier this year, gas is considered the premier fuel of the 21st century – until new energy sources like solar and hydrogen displace fossil fuels entirely.
Gas already accounts for a quarter of energy use in the United States, and LNG imports are expected to supply 21 per cent of that market by the end of this decade. Trinidad is the largest LNG exporter to the US and is racking up deals to supply other countries in the region.
Just last month a 20-year pact was signed with Jamaica for the supply of Trinidadian LNG and the construction of a re-gasification terminal at Port Esquivel financed by the Inter-American Development Bank. The push-pull effect of high US demand combined with Trinidad's need to sell makes it very likely that LNG terminals will also be built here.
Some Creative Thinking
Like Jamaica,we have no fossil fuel resources (although oil companies have been exploring here for decades). So BEC must spend millions in scarce foreign exchange to import huge quantities of diesel and heavy fuel oil for its generators, with all the environmental hazards that go along with that.
This is why some voices are calling for more innovative economic thinking among Bahamian leaders. And by innovative, we mean that government should set an agenda and evaluate intelligent ways of saving foreign exchange and improving the business climate rather than simply trying to raise our taxes and expand the inefficient public sector.
Energy is one of the key inputs of any economy. And experts say that at some point over the next 20 years oil supply will peak, leading to price shocks as the world changes from oil abundance to oil scarcity. Since our entire economy runs on imported oil, this is a topic for innovative thinking if ever there was one.
The PetroCaribe Initiative
Meanwhile, Caricom leaders are falling over themselves to sign up for a regional oil trading system called PetroCaribe – a Venezeulan proposal seconded byTrinidad that is supposed to build cooperation in the exploration, production, refining, transportation, storage, distribution and retailing of petroleum products throughout the region.
Regional governments (including ours) are working on a draft treaty along these lines. And according to some, nationalisation of existing petroleum distribution and retailing systems is in the cards.
But this is a short term approach that hardly qualifies as creative thinking, relying as it does on the grandiose schemes of a here today-gone tomorrow Latin American strongman.
Instead of getting into the energy business, with all the unpleasant ramifications that will entail, we suggest that the government do what it is supposed to do – develop a comprehensive energy strategy that takes account of alternative fuels and new technologies.
"A sound energy policy is a fundamental building block for a strong economy," Da Costa Bethel said recently. "Our dependence on imported hydrocarbons has significant drawbacks, and we need to plan for energy security and environmental protection."
Unfortunately, he also confirmed that no such planning is going on within BEC or the government. And this is despite the fact that the Bahamas and 15 other Caricom nations have joined in what is known as the Caribbean Renewable Energy Development Programme.
The goal of this United Nations-funded initiative is to help countries remove barriers to the implementation of renewable energy systems. A regional policy unit is supposed to be working with national advisory committees to develop a supportive policy, regulatory and financing environment.
Lack of Vision
In the Caribbean today, only Jamaica and Cuba generate significant amounts of power from alternative sources such as geothermal, solar, wind or biomass. And the Dominican Republic is the region's largest producer of hydroelectricity.
Lack of vision is a big part of the problem. There has been "a consistent failure on the part of Caribbean decision makers to consider the alternative value of money spent on fuel oil if it were to be spent on other materials of higher social value," according to analysts. This is a reference to the generally higher cost of new technologies.
We could find very few renewable energy projects or systems operating in the Bahamas today. Other than isolated research stations like Forfar in North Andros and the Island School at Cape Eleuthera that teach sustainable living, a few resorts like Comfort Suites on Paradise Island use rooftop solar cells for water heating.
One big exception is the Tiamo resort on South Andros, which has the largest solar power system operated by a private tourism facility in the region. Tiamo is the first resort in the region to rely on alternative energy for all its power needs. And it uses this as a selling point for visitors who pay $300 per person per night for a fan-cooled room.
The Perry Institute's research lab at Lee Stocking Island in the Exumas was working on a combined solar/hydrogen island power system as recently as three years ago. But after selling out to Teledyne Technologies in the US, the project was scrapped in favour of more lucrative aerospace contracts.
Within the last two years approval in principle was given for a proposal to establish wind farms to generate power on Abaco and Grand Bahama. However, the investors are said to be dealing with environmental objections from the BEST Commission Wind farms occupy a lot of ground area and the turbines themselves can be laqrge and hazardous to bird life.
More recently, a $150 million waste-to-energy proposal has been submitted to government by a company that has built and operated such plants worldwide and that has also worked on a utility project in the Bahamas previously.
Waste-to-energy facilities produce electricity by burning garbage in special plants equipped with pollution controls. Trash volume is reduced by 90 per cent and, after testing to meet environmental standards, the residue is disposed of in landfills. There are currently 89 such plants operating throughout the United States, including two in Broward County, Florida.
The Soft Path to Greener Energy
Meanwhile, energy experts around the world are advocating an alternative future where more efficient use of power, new technologies and green architecture replace the current centralized energy system based on fossil fuels that dates back to the early 20th century.
A big aspect of this so-called 'soft path' is small-scale distributed generation systems that provide reliable power at local points. For most of the last century it was supposed that only huge power plants could be efficient. But as traditional engines and turbines got smaller and better, on-site power generation became more feasible.
For example, some Japanese office buildings run on fuel cells. The renovated parliament building in Berlin is powered by its own generator running on vegetable oil. And Manhattan's Cond? Nast building uses fuel cells, gas powered cooling systems, solar panels and coated glass to cut energy use by 40 per cent compared to a conventional building.
But the transition to smaller, decentralised power plants will take time. There are many large power stations with years of useful life remaining. And electric utilities often see distributed systems as a threat, arguing that they make the investment in traditional utility assets uneconomical. That's why it's illegal to generate private power in Nassau today – unless there's a utility failure.
Currently, inefficient central power systems hold a 93% share of the world's electricity generation, but change can occur with surprising speed when people stop taking the dominant model for granted, experts say.
And the generators used to supply on-site power can range from traditional but much-improved internal combustion engines, to microturbines, windmills, Stirling engines, or newer hydrogen and solar technologies.
Wind power has recently beaten the cost of new coal plants, even ignoring coal's greater subsidies and pollution. And wind is now officially recognized as the cheapest generating technology in good sites, like offshore sandbanks.
Solar devices remain expensive, but costs are coming down and efficiency has improved. Solar power can now be competitive with conventionally generated peak power in many markets. And building-integrated photovoltaic systems (e.g., roof tiles, decorative panels, sun shades, and skylights) are being widely used in grid-connected installations throughout Europe, Japan, and the United States.
On-site fuel cell generators are commercially available now in the 250 kilowatt to 3 megawatt range. Running on natural gas or waste (biomass) gas these generators produce electricity and heat without combustion or the pollutants associated with burning fuel.
Caterpillar and the city of Westerville, Ohio are bringing on-line one of the first utility-scale fuel cell power plants in North America. And Honda is working with Plug Power of New York on a home refueling unit that produces hydrogen from natural gas for fuel cell vehicle refueling, domestic hot water and electricity.
This is just a small sampling of the many new developments taking place around the world. The challenge is to start changing mindsets and incentives locally in order to bring micro-generation and green architecture into the commercial mainstream.
It should not be that difficult. Most large complexes in the Bahamas already have backup generators installed at great expense because of BEC's unreliability. We should study wider use of these units – either on or off the grid.
As air pollution worsens and global oil supplies get squeezed, energy providers will have to look to new technologies for a clean, renewable, and decentralized energy source. So why don't we start planning today? That's what governments are for – to plan and make policies for the future.
According to one local analyst, "The cost we pay for our current energy regime is complete reliance on foreign sources of supply as well as environmental damage due to pollution, which is not good for a tourist destination. And the stifling effect on the economy of high energy prices and restricted energy supply must also be considered."
The alternatives to this scenario are no longer as out of reach as they once were.
This article was first published in The Tribune December 9, 2004.
The column 'Tough Call' by Larry Smith is published in The Tribune every Wednesday and is reprinted here as a courtesy. Mr. Smith founded and successfully grew an advertising agency over 20 years. Under his direction Media Enterprises diversified into short-run commercial printing and publishing, and is now the largest non-fiction book wholesaler in the Bahamas. He has 30 years experience as a journalist and publicist and has contributed numerous articles and columns to the Bahamian press. A former reporter at the Nassau Guardian, local correspondent for Reuters and editor at the Bahamas News Bureau, he conceived and edited the Bahama Almanac (published 2000 by Media Enterprises), wrote the commentary for Mike Toogood's Portrait of an Archipelago (published 2004 by Macmillan Caribbean), and edited the Bahamas Environmental Handbook (published 2002 by the government). In 2003 he took a year's leave of absence from Media Enterprises to lead a transition management team at the Nassau Guardian after the paper was acquired by local investors. After leaving the Guardian he was contracted by the Tribune as online manager/editor and columnist. He has a degree in political science and journalism from the University of Miami. Mr. Smith can be contacted at: firstname.lastname@example.org