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Bahamas (2012)

Source: REEEP Policy Database (contributed by SERN for REEEP)

This policy & regulatory overview is not updated anymore since 2015. We decided to keep it online due to high demand but would like to make you aware of the fact that it might be outdated.

Energy sources

Total installed electricity capacity (2009): 450 MW.

For 2007, the generation statistics showed that heavy fuel oil was used to generate 68% of electricity and automotive diesel oil was used to generate 32% of electricity produced by the Bahamas Electricity Corporation (BEC). BEC has a high dependence on fossil fuels as well as all other sectors of the Bahamian economy.

Renewable energy sources or technologies represent a negligible contribution to the national energy mix.  Two main players, (BEC) and the Freeport Power Company, supply virtually all the Commonwealth’s electricity needs. International and local oil companies supply the fuels and lubricants derived from fossil fuels used in the electricity and transport sector.

Total primary energy supply (2006): 1688.4 toe.

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Reliance

The Bahamas depends on imported petroleum products to satisfy over 99% of its consumer energy demand. The annual consumption of entirely imported petroleum products used to generate electricity was 9,490,000 barrels for the year 2008, and the electricity demand growth has progressed at an annual rate of around 3% for the last few years.

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Extend network

The Bahamas is unique in that its electricity system is distributed among some 16 isolated island grids. Thus expansion is incremental, and generation capacity is primarily small diesel plants with a capacity of 20MW and less. In spite of the distributed layout of the system, BEC charges a single rate structure for its customers. The Bahamas has nearly complete electrification at about 99% overall and 100% for Grand Bahama.

The majority of the electricity infrastructure is concentrated on New Providence, which holds roughly two-thirds of the nation's population.
 

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Capacity concerns

As the Bahamas possesses no known quantifiable, easily-exploited energy reserves of fossil fuels and depends on imported sources to meet its energy needs, its energy security level is extremely low. The country and its service-based economy are particularly vulnerable to global economic forces that affect the cost and availability of fossil fuels.

The Bahamas experienced 12.3% system losses in 2008. Waste of fossil fuels, via leaks and lack of inventory controls, are a particular concern for the Bahamas. The NEP draft calls for monitoring fossil fuel losses as a short-term goal.
 

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Renewable energy

RE resources have yet to be exploited in the Bahamas in any significant way. 

Solar energy
The Bahamian government implemented incentives for solar equipment in 2008, by decreasing import duties from 42% to 10%. The hospitality industry has shown some interest in solar devices, and several PV and SWH distributors have entered the market. 

The Bahamas have good solar resources for flat-panel PV and solar hot water systems with GHI averaging over 5.3 kWh/m2/day. While this is somewhat less than other islands in the Caribbean, the high price of power means PV and SHW systems are still economically viable. The direct normal irradiation (DNI) resource is far poorer, suggesting that concentrated solar would perform poorly in this region.

Wind energy
Wind data is being measured on Grand Bahama Island in a joint project between GBP and shareholder Emera. The assessment project involves towers at seven sites across the island, at a cost of USD 263,600. Following the assessment, GBP may install up to 15 MW of wind capacity by 2012.

Biomass energy
Waste-to-energy currently represents the more immediate initiative to increase power supplies in the short term, while at the same time improving air quality, reducing pollution and illegal burning of wastes and fires on the public landfills. Additional environmental benefits include the reduction of top soil to entomb waste, recovery of recyclable materials and the reduction of the seepage of contaminants into the subsurface.

OTEC
Ocean Thermal Energy Conversion (OTEC) processes also represent an exploitable renewable resource.  As the Bahamas Banks are characterised by steep drop-offs, most of the major islands have a location where OTEC technology would be feasible; however, this technology is at the experimental stage.  Seawater district cooling could also be used in these locations, but there are few with appreciable demands for it. Deep-well reverse thermal conversion may also be an exploitable source of energy.

Geothermal/Hydropower
There has been little investigation into the potentials for these resources in the Bahamas, although studies indicate some geothermal potential in the Green Bahamas Bank region.

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Energy efficiency

No national assessment has been conducted to determine the country’s energy use, energy efficiency or the extent of energy conservation efforts.

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Ownership

The Bahamas Electricity Corporation (BEC, www.bahamaselectricity.com), a wholly owned Government public corporation, operates 29 generating plants (28 diesel engine stations and 1 gas turbine power station) with an installed capacity of 438 MW, providing service to approximately 93,000 customers. BEC’s area of supply extends to all of the major islands of The Bahamas with the exception of Grand Bahama Island, which is covered by Grand Bahama Power Company (GBPC, www.gb-power.com) ─a private utility company that serves 19,000 customers─ and small private franchise holders existing throughout the smaller islands and cays. BEC was established as a Government-owned public Corporation by the Electricity Act of 1956.

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Competition

The BEC is a vertically integrated, state-owned operation that is responsible for the generation, transmission, distribution and commercialization of electricity across most of the Bahamas, serving approximately 85% of all electricity consumers. The company is governed by a Board of Directors and managed by an executive team led by a General Manager. The Executive Chairman reports directly to the Minister of the Environment.

The GBPC is a vertically-integrated, privately-financed company, responsible for all electrical services on the island of Grand Bahamas. Self-generation is not allowed, and IPPs are permitted only on the Family Islands.

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Energy framework

There is no clear national policy supporting the implementation of grid-connected RE / WE projects and EE measures. Recognizing that Bahamas depends on imported fuels to satisfy over 99% of its energy demand and since electricity is projected to grow at 8% over the next five years as a result of several new developments, in 2008 the Government of the Bahamas (GoBH) decided to commit to the following National Energy Vision:

“The Bahamas will become a world leader in the development and implementation of sustainable energy opportunities by aggressively re-engineering our legislative, regulatory and institutional frameworks; retooling our human resources; and implementing a diverse range of well researched and regulated, environmentally sensitive and sustainable energy programs and initiatives, built upon geographical (both proximity and diversity), climatic ( sun, wind and sea) and traditional economic strengths (tourism and banking).”

To support this vision, the GoBH has appointed the National Energy Policy Committee (NEPC) that has drafted a preliminary National Energy Policy. The draft is under revision by an external consultant financed by the Inter-American Development Bank (IDB). To date, the NEP has not been adopted by the government as policy.

Sustainable Energy Projects in the Bahamas
The Bahamas received an IDB grant for Implementing Sustainable Energy Projects by the end of 2009. This programme will: (i) provide technical assistance to the GoBH to achieve EE in public buildings, the residential and commercial sectors,  in particular the phase-out of incandescent lights by replacing them with CFLs and installation of Solar Water Heater (SWH) systems in households; (ii) implement pilot projects in RE, particularly a demonstration project for household Photovoltaic (PV) systems connected to the grid using net metering devices; (iii) strengthen the energy sector in Bahamas; (iv) support the Government with a review of energy legislation, regulatory and policy issues to promote sustainable energy as well as institutional strengthening in the areas EE and RE.

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Energy debates

In mid 2008, the BEC launched an initiative to seek Expressions of Interest from specialized engineering services firms, to assist them with the execution of a RE implementation plan. BEC is currently evaluating about a dozen proposals to generate electricity using several RE and WE technologies, but does not have the necessary in-house expertise to complete the evaluation and implementation of these RE / WE projects.

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Energy studies

The Bahamas is a member of the Caribbean Renewable Energy Development Program (CREDP), which was established in 1998 when 16 Caribbean countries decided to work together to prepare a regional project to remove the barriers to the use of renewable energy and to foster its development and commercialization.
 

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Role of government

The Ministry of the Environment (MOTE) is the responsible for the Energy Sector in the Bahamas; however it does currently not have a division specifically focused on promoting EE and RE, nor provided with the adequate means to do so effectively.

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Government agencies

The MOTE has the support of the Bahamas Environment, Science & Technology Commission (BEST) which manages and reviews environmental impact assessment and environmental management plans for development of projects proposed in the country including those destined to electricity generation.

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Energy procedure

The Government signed three Technical Cooperation agreements with the  IDB at the end of 2009 toward the cost of:

  • Strengthening the Energy Sector in The Bahamas
  • Promoting Sustainable Energy in The Bahamas
  • Promotion of Energy Efficient Residential Lighting

 
Under the first project, consulting firms submitted proposals for a broad framework for the implementation of RE. This will involve (i) a financial and operational review of BEC to establish a strategy for expansion including diversification of generating sources and (ii) an analysis of the current regulatory framework with recommendations to achieve a sustainable energy matrix.

The general objective of the second project is promoting and supporting sustainable energy, including RE, EE, Waste to Energy (WE) and energy conservations programs, and providing alternatives to minimize the dependency on fossil fuels.
 
The third project, an Investment Grant (IG) funded by the SECCI, aims to reduce the electricity bills of the most vulnerable sector of the population through energy savings with the provision of CFLs and increasing awareness of the benefits of energy efficiency.

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Energy regulator

The Public Utilities Commission was replaced in 2009 by the Utilities Regulation and Competition Authority (URCA, www.urcabahamas.bs/), created in order to serve as the primary governing body for electronic communications in the Bahamas. The URCA is to assume responsibility for the electricity sector in the country on a date to be determined by the Government.

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Degree of independence

The URCA is independent of the Government and financed by private sources.

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Regulatory framework

The Bahamas regulatory framework is governed by the Electricity Act, the Out Island Electricity Act and the Out Island Utilities Act. The Electricity Act established BEC to secure the supply of electricity at reasonable prices, as well to purchase, generate, transmit, transform, distribute and sell energy either in bulk or to individual consumers.

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Regulatory roles

Regulation of the electricity sector in the country has been established in law, as opposed to being the responsibility of a regulatory body. The statutes set in the electricity laws include tariffs, fuel surcharges, and the responsibilities of the BEC for ensuring high standard of service.

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Energy regulation role

The BEST commission is responsible for proposing legislation to enforce national action plans on energy and the environment, which it is also responsible for producing.

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Regulatory barriers

The current Electricity Act does not allow for the development of grid connected RE / WE alternatives in that it: (i) gives exclusive rights for the generation and sale of electricity to BEC or a franchiser, thus prohibiting self-generation and interconnection to BEC’s grid;(ii) does not impose a requirement that a certain percentage of electricity must be generated from RES. The former makes the connection of IIP uncertain and does not provide an appropriate commercial framework for the development of electricity generation projects, and the latter does not provide incentives for RE projects and the implementation of EE measures. A revised legal and regulatory framework of the Energy Sector would need to be in place to allow for the interconnection of RE and WE to the grid.

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References

http://www.ecpamericas.org/. Energy Policy and Sector Analysis in the Caribbean (2010-2011). Available from http://www.ecpamericas.org/data/files/Initiatives/lccc_caribbean/LCCC_Report_Final_May2012.pdf [Accessed 28 July 2013]

Bahamas Electricity Corporation Presentation: Fuel Oil/Energy Buyers Conference, Miami Beach, Florida, U.S.A., October 25th - 27th 2009. http://www.fswierz.com/PPTs/Bethel.ppt [Accessed 29 July 2013]

IADB: Sustainable Energy for Haiti, Bahamas and Barbados. http://www.iadb.org/en/news/webstories/2010-05-21/sustainable-energy-for-haiti-bahamas-and-barbados-idb,7167.html [Accessed 29 July 2013]

BEST Commission: Technology Transfer in the Bahamas. http://unfccc.int/files/documentation/workshops_documentation/application/pdf/bahcp.pdf [Accessed 29 July 2013]
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