The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Chamber of Commerce’s chairman has questioned “the sense of urgency” over addressing the Bahamas’ high energy costs, arguing that this would be a “game changer” for the economy.

Mike Maura, while speaking at a Utilities Regulation & Competition Authority (URCA) oral hearing on Wednesday night, said: “While I know everybody is working hard, where is the sense of urgency? I say that from the standpoint that there was a National Energy Plan, and the fact is that we pay a higher cost of energy than we need to. Where is the sense of urgency?”

Mr Maura said cleaner and less expensive fuel, along with more a modern and efficient energy infrastructure, would help reduce the cost of energy in this nation.

“If our energy infrastructure was modern and efficient, utilising LNG, our government may be seeking a loan for less than $720 million right now,” he said, referring to the Government’s borrowing authority for the 2017-2018 fiscal year.

Mr Maura said the world had shifted away from state-run power producers, with governments operating more as regulators rather than owners/operators of power plants, instead contracting independent power producers.

“Solar as a renewable energy source is another area that must be taken seriously,” Mr Maura added, pointing out that Arawak Port Development Company (APD), which he heads, had placed a 36 Kilowatt (KW) system on the roof of its main administration building at Arawak Cay.

An Inter-American Development Bank (IDB) report yesterday said the Bahamas had suffered “lost opportunities” as a result of its inability to diversify energy sources away from an almost total reliance on fossil fuels, particularly Bunker C and heavy fuel oils (HFOs).

As a result, the Bahamian economy remains at the mercy of global oil prices, which “have a significant impact” on this nation’s current account balances and domestic prices (inflation).

“Current lower fuel oil prices are having a positive impact on the economy,” the IDB’s Caribbean Quarterly Bulletin said. “During the past five years, oil imports averaged almost 10 per cent of GDP and just over a third of the trade balance.

“At the end of 2015, oil imports accounted for 6 per cent of GDP ($520 million). The country’s external position improved and the current account deficit as a per cent of GDP declined from 16 to 11 per cent, largely driven by lower fuel imports. Expectations are that this trend will continue.”

The IDB report said petroleum oils and other crude accounted for more than 20 per cent of non-agricultural imports, which themselves are 75 per cent of the Bahamas’ total imports.

APD obtained a $3 million loan for the installation from the Inter-American Investment Corporation (IIC), the IDB arm that finances the private sector.

Mr Maura told Tribune Business that APD’s roof-top solar PV system had already slashed energy costs at the administration building by almost two-thirds, dropping them from $0.29 per kWh to $0.09-$0.10 per kwh.

The bulk of APD’s savings will be generated when it replaces the port’s existing lights with LEDs, and Mr Maura said: “We expect our energy costs to fall by [a further] 40 per cent.