The Tribune

• Sir Franklyn: Minister’s estimate ‘conservative’

• Rental generation deal key to avoid blackouts

• Utility can’t meet peak Nassau demand without

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

FOCOL Holdings is “gunning” to beat the $40m savings pledged to Bahamas Power & Light (BPL) customers through the New Providence rental generation it will supply to prevent summer blackouts, its chairman asserted yesterday.

Sir Franklyn Wilson told Tribune Business that the savings unveiled by Alfred Sears, minister of public works and utilities, as a result of the BISX-listed petroleum products supplier providing BPL with 43 Mega Watts (MW) of power were “conservative”.

Speaking after the minister told the House of Assembly that the continued provision of rental generation is critical to enabling BPL to avoid the frequent outages that have plagued Nassau during past summers, he added that the units provided by FOCOL’s subsidiary will burn cheaper, cleaner fuel following the “expanded” deal signed with the state-owned energy monopoly on May 24, 2022.

“I think the minister is being conservative in his estimate with his $40m,” Sir Franklyn told this newspaper of the figure given by Mr Sears to Parliament. “This is a truly significant event in The Bahamas, in our view. This is a significant development for the country. We are pleased that the minister has alerted the country to the fact that very material savings are involved here.

“We as a company are committed to doing all we possibly can to increase that number beyond his estimate of $40m. Let me just say it this way: We are gunning to save the country more than $40m. Any one enterprise that is currently able to save the country $40m is a significant development and not an easy occurrence.”

Mr Sears yesterday revealed that the provision of a total 83 MW in rental generation capacity, with Aggreko joining Sun Utilities by supplying the other 40 MW, was vital to providing BPL with sufficient generation capacity to meet New Providence’s estimated peak summer 2022 demand of 260 MW (see other article on Page 1B).

Without this, Bahamian households and businesses could again be facing a hot, dark summer given that BPL’s own usable generation capacity was pegged at only 241.1 MW. This would leave a near-19 MW gap between BPL’s maximum output and peak demand, with the utility only able to cover 92.7 percent of this amount - something that would result in load shedding and rolling outages if not plugged. Load shedding has occurred in multiple areas recently.

“BPL has, on my request, provided a contingency plan for the summer,” Mr Sears said, noting that this was typically the period of “peak demand” with air conditioning being operated much more frequently.

“We have made provision for there to be up to 323.5 MW, so that we have available during the peak period more power than we would normally use, and so we have some redundancy and will be able to respond when there is a failure of one kind or another,” he added.

“To achieve this, there will be a number of rental agreements with Aggreko and Sun Utilities totalling 83 MW to provide adequate, highly reliable generation to complement the generation from BPL at 241.1 MW to meet the target of 323.5 MW to service peak demand.

“The Aggreko rental contract already exists, and the Sun Utilities contract was awarded on May 24, 2022, and is expected to be commercially available on or before July 1, 2022. Twenty-seven mega watts of the Sun Utilities contract is dual fuel and can run on the cheaper heavy fuel oil,” Mr Sears continued.

“Sixteen mega watts of the Sun Utilities rentals will run on propane, and will result in savings of up to $40m in overall costs, including fuel, over the 12 months compared to running the less efficient gas turbine at Blue Hills power station.” Much of the savings will likely come from the use of propane and heavy fuel oil (HFO), which are less expensive than the automotive diesel oil (ADO) largely employed by Aggreko.

Sir Franklyn yesterday declined to specify how much BPL, and by extension its customers and the taxpayer, is paying to rent Sun Utilities’ generation. He had earlier this year revealed that the 27 MW engine was being installed at BPL’s Clifton Pier power plant, while the 16 MW variety was based at the Blue Hills location.

The FOCOL Holdings chairman, though, reiterated that it was seeking to increase its energy sector involvement - especially in the area of renewables - as it seeks to follow the global petroleum industry in shifting away from fossil fuels amid the climate change crisis.

“FOCOL, the company, as a whole is doing what the major global supply companies are doing all over the world, and positioning itself for increasing pressure to minimise the use of fossil fuels,” Sir Franklyn told Tribune Business. “That’s a global trend; you cannot fight against that.”

Asserting that Shell, for which FOCOL acts as wholesale supplier and retailer in The Bahamas, was “one of the largest renewable energy producers in the world, Sir Franklyn said: “The principle point I’m making, and I want FOCOL shareholders to be aware of this, is that we are pursuing a strategy consistent with the best thinking globally.

“It’s wonderful that in doing so we can make such a major contribution to national development by saving this amount of money. We have some other initiatives in mind we think will work well with the objectives of BPL in the country at large. Forty million dollars is not an insignificant number in The Bahamas, in addition to increased reliability and dependability.

“As far as I’m speaking as chairman of Sun Oil, the $40m we ourselves will seek to save the country that minimum. That $40m figure we will see to exceed on our own. This agreement affirms our commitment to the energy sector. We are aware of the national goal to achieve a certain level of renewables by a certain timeframe. We are hopeful of being meaningful contributors to attaining that goal.”

The Bahamas is targeting 30 percent of its energy mix coming from renewable sources by 2030, but it has a long way to travel to reach that goal which many believe is unattainable at present. While not revealing what other energy “initiatives” FOCOL is working on, Sir Franklyn added: “We’re doing what the big boys are doing globally. This is the way the world is going.

“We are satisfied that the Government is serious about mitigating the impact of climate change, and we are being as aggressive as we can to be of assistance.”