The Tribune

• Floating Power Plant revived for third Gov’t
• Up to 450MW of clean power in 120 days
• Attorney says should pursue ‘aggressively’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A “quick one-stop solution” for The Bahamas’ energy crisis was yesterday re-floated by a local attorney who argued it could resolve cost, reliability and environmental woes “within months”.

John Bostwick II, who acted as legal adviser to the group that first proposed the Floating Power Plant plan in 2012, advocated to Tribune Business that the Davis administration should “aggressively” pursue an initiative he presented to both its Christie and Minnis predecessors given Bahamas Power & Light’s (BPL) “dire” state.

Confirming that the proposal would still involve mooring barge-based power plants in calmer waters at Arawak Cay, he added that this could make between 300-450 Mega Watts (MW) of generation capacity available for New Providence alone within 120 days of the Government agreeing to the solution.

Mr Bostwick told this newspaper that these Floating Power Plants would employ solely clean-burning fuels, such as liquefied natural gas (LNG), to alleviate environmental concerns, while the proposal submitted to previous administrations offered to supply electricity to BPL’s grid via a power purchase agreement (PPA) priced as low as 12 cents per kilowatt hour (KWh).

That would represent a significant reduction to the BPL bills faced by businesses and households. While the Government appears to be headed in a different direction, likely to involve splitting the state-owned utility into separate generation, transmission and distribution and customer service/billing units by bringing in private capital and expertise via private-public partnerships (PPP), Mr Bostwick said his offer still merited serious consideration.

Noting that the generation capacity involved would match the 400 MW cited by Ryan Pinder, the Attorney General, as needing replacement by BPL within the next five years, he added that the Floating Power Plant deal could be structured as a short-term arrangement that would give the Government flexibility and breathing space while it works out how to address the utility’s needs.

“Everything they indicated was a problem,” Mr Bostwick told Tribune Business. “Every one of those things the minister identified - the capacity, the timeline, the cost - all are addressed by the Floating Power Plant proposal presented to two successive administrations.”

Both the Christie and Minnis administrations failed to bite, but Mr Bostwick said he has not given up hope and could rapidly mobilise such a solution once again if the Government gives the word. “The Floating Power Plant proposal represents a short, medium, long-term and complete solution,” he added.

“Short-term, any floating power plant solution could have been delivered to any government within 120 days of accepting the solution. The solution would include 300-450 MW as the units come in 150 MW module. It’s powered by LNG with clean-burning and carbon scrubbers. They run primarily on LNG, and the proposal includes bunkering and storage units for the LNG.”

Mr Bostwick said his first Floating Power Plant proposal involved US-based companies, and the second technology provided by the multinational, Siemens. “The ability to put it all together remains in place,” he told this newspaper.

“If the Government says the words: ‘We want a floating power plant’ we can do it in weeks. We can have people at the table in weeks. Given the Government’s mandate this thing could be available and put in position within a few short months. Overnight it can address the generation shortfall identified by the Attorney General.”

Mr Bostwick represented the SGI Global Holdings consortium over its $250m proposal to moor two barge-based power plants at Arawak Cay when the Christie administration was in office.

The project, billed as reducing New Providence’s energy costs by 50 percent through the supply of up to 272 Mega Watts (MW), was submitted to the previous government three times - in September 2012, May 2013, and again in 2014.

Previous Tribune Business reports revealed that the Government explored the idea of bringing in a Floating Power Plant to stabilise BPL’s New Providence generation supply but decided against it on economic and technical grounds.

It is understood that the best place for such a solution to connect with BPL’s distribution grid is Clifton Pier, but this location was ruled out because of the rough seas that occur in the area during bad weather. Coral Harbour, with its expanded Royal Bahamas Defence Force (RBDF) base, was also mulled as an alternative site but rejected because of the amount of time required to set it up.

“I for the life of me couldn’t figure out why they wouldn’t entertain that,” Mr Bostwick said yesterday of the his earlier proposal. “They seemed to be going in every other direction. They can be connected to the BPL grid at any place. That was a source of discussion that did go on, and Clifton is not the best place for mooring a Floating Power Plant. We would not want to put it there.

“Arawak Cay is 100 percent sheltered, and it also gives us the ability to run submarine cables to the cruise ships. Those ships cannot plug in. They’d like to plug in in Nassau, but we don’t have the power to offer them. Here it is. We could charge them the maximum rate and also address the environmental concerns.”

Mr Bostwick added that submarine cables could also be run directly to Atlantis and Baha Mar from a Floating Power Plant based at Arawak Cay to provide both mega resorts with “reliable” power, “which is why Arawak Cay is five times’ more sensible than going to the other side of the island”.

He added that Floating Power Plants have a history in the Caribbean, having been employed by the likes of Jamaica and the Dominican Republic from the 1980s, and the frequency of hurricanes had proven to be no concern.

“They can be moved to safer locations,” Mr Bostwick said. “Ours would be a fully secured mooring at Arawak Cay. When we offered it before the cost was about as low as 12 cents per KWh.” The price at which energy is sold to BPL varies according to the PPA’s length, with a 20-year deal likely to involve lower costs than a ten-year agreement.

He argued that this flexibility will give the Government sufficient breathing space to develop its desired long-term solution for BPL, which is presently burdened with $500m in legacy debt and liabilities and faced with the need to invest another half a billion dollars to upgrade critical generation and transmission and distribution (T&D) infrastructure.

“I would say honestly, given the statements made by this administration, it’s something they should be looking at aggressively,” Mr Bostwick told Tribune Business of his floating power plant proposal, “and something that is a quick one-stop solution for everything they’ve articulated as being a pressing concern. It could be put in place even before a snap election.”

Mr Pinder, last week affirming that 60 percent of New Providence’s existing generation capacity, and 80 percent of what is present in the Family Islands, will be “at or near the end of their useful life” by 2029, added that BPL’s financing needs to effect change for Nassau alone are some $211m.

He said BPL’s reliance on rental generation for 113 MW of power on New Providence, and 32 MW in the Family Islands, is costing the state-owned utility an “unsustainable” $42m per annum that it is unable to fully recover from household and business customers.

And, with BPL needing to replace some 72 percent of its own “peak load generation” capacity for New Providence over the next five years, and energy demand anticipated to increase by an average 5 percent per annum, the Attorney General argued that the “status quo” was untenable given the financial numbers involved.

“BPL has severe generation constraints, and the picture is not looking any better going forward under the status quo,” Mr Pinder said. “It is a safe estimate that 60 percent of BPL’s plant in New Providence and 80 percent in the Family Islands needs to be replaced within the next five years due to the generation engines being at or near the end of their useful life.

“Accounting for contingencies, at least 340 MW is needed in New Providence. This is to account for peak load, which was 281 MW in 2023 plus what’s called the N-2 contingencies in case you lose your two largest generators. We also anticipate a 5 percent growth in generation demand each year going forward.

“As to the generation needs, BPL requires replacement for 113 MW of rental generation and 203 MW of aged or obsolete generation fleet. Look at those numbers again: More than 40 percent of the peak load generation is rented by BPL, and over 72 percent of peak load generation that BPL owns needs replacement in the near future,” he added.

“It is estimated in New Providence alone, BPL anticipates needing more than $211m to replace the ageing fleet, to incorporate renewables and to facilitate maintenance/overhauls and other auxiliary needs.”