Energy Regulatory Reform Is “Top Priority”

Mr. Speaker, I rise this morning to provide this Honourable House with an update on some of the energy related activities that my Ministry, through the Department of Energy, is currently progressing.

Mr. Speaker, the top energy related priority for the Ministry of Education and Economic Development is Energy Regulatory Reform. Once complete, this will usher in a new regulatory regime for energy in Bermuda, as is the case for telecommunications with the Regulatory Authority and the Electronic Communications Act 2012.

This new regime will also satisfy many of the goals that were articulated in the 2011 White Paper. Within the next week, the Department will publish a Request for Proposal to engage legal consultants who will work with the Department of Energy to assist in the development of energy regulatory policies and also assist the Attorney General’s Chambers with the proposed new legislation.

Our current plans have this work scheduled to commence in the late summer, with the intent of having public consultations in the fall.

Mr. Speaker, another initiative on the Department of Energy’s agenda is the creation of interconnection agreements between BELCO and the many commercial and residential Solar PV system installations that are coming online.

Mr. Speaker, after a period of extensive consultation with the Bermuda Energy Working Group, it was recognized that in order to create the most equitable set of agreements for the various size and number of systems, the services of a specialist consultant is necessary.

Therefore in February of this year, the Department published a Request-For-Proposal in order to engage such a consulting organization. The consultant will be working on residential interconnection agreements, commercial interconnection agreements, and also utility-scale power purchase agreements.

These agreements will also enable the development of intermediate and large-scale projects such as solar photovoltaic farms. Without the Power Purchase Agreements, or PPAs, there can be no credible solicitation for renewable energy proposals for any public lands or buildings.

Some may see this consultant as the cart before the horse, when juxtaposed with the work of regulatory reform, but in fact this is absolutely necessary, in order to respond to an urgent need in the community. There are commercial customers, who are interconnected to the grid and providing their excess power into the system, but who are not currently being compensated.

The work of the consultant will rectify this situation, and because the work will be done in an open and collaborative fashion, the agreements will be developed transparently and be as fair as possible to all participants.

Mr. Speaker, the current use of heavy atmospheric oil and diesel fuel to generate electricity is not sustainable, from either an economic perspective or an environmental one. We must therefore consider other options.

The Department of Energy has been evaluating various unsolicited proposals, which include; but not limited to the use of natural gas, solar PV, waste to energy, floating wind turbines, and other alternate energy solutions, such as combined heat and power or tri-generation.

Mr. Speaker, above all, my Ministry is acutely aware that interim solutions will have to play a role in Bermuda’s economic recovery, and so we have been looking seriously at liquefied natural gas [LNG]. As stated in the past, LNG may be an excellent bridging solution, and it may also have a role to play in reducing our transportation emissions. We believe it will also reduce the cost of energy to the consumer.

However, it will require considerable capital expenditure by providers. Mr. Speaker, it is imperative that whatever medium-term solutions we choose to pursue, we must also consider our current economic conditions and aid, rather than jeopardize, our economic recovery. We must make ourselves more competitive, both regionally and in a wider global sense as we compete with the world for foreign direct investment.

Mr. Speaker, the Department of Energy is involved in discussions with the Departments of Planning and Government Estates on building rating systems. These systems can start with Government and demonstrate fiscal responsibility and exhibit transparency with regard to energy expenditures.

The Government’s Sustainable Energy Committee [GSEC] is researching these systems, and currently gathering the necessary baseline data. This data will guide the GSEC in making meaningful and effective recommendations for energy conservation and efficiency throughout Government’s extensive portfolio of buildings.

Mr. Speaker, as the House will be aware, the rebate initiatives for solar technologies have now ended. The overall financial commitment to these programmes exceeded the former administration’s original estimate by about 70% when it ended in April of this year.

As a result, there is close to a megawatt of installed solar PV and hundreds of kilowatts of avoided electrical use due to the installation of solar water heating through this initiative, and the renewable energy industry is now well established.

In response to the needs of the industry, and recognizing that we still need to encourage the adoption of renewable energy technologies, the Department continues to do its part to reduce the ‘soft costs’ of renewable energy.
The Department has been collaborating with the Department of Planning to find ways in which we might lower barriers to renewable energy integration without sacrificing their statutory duties of ensuring safety and code compliances.

Already, the process is streamlined so that any applications of 400 square feet and under are permitted development and therefore do not require a full-blown Planning Application, and any applications under 1000 square feet do not require Department of Energy to review. Other solutions are being examined as we continue to listen and respond to the needs of the renewable energy community.

Mr. Speaker, the Department of Energy has been reviewing and assessing the status of each element and/or recommendation in the 2011 White Paper. The Department’s review is complete, and they are now in the process of providing some policy recommendations which will be decided upon and shared in due course.

Among those decisions is an assessment of which initiatives will deliver the best return on investment in terms of time and resources, and which may no longer be valid and may require further consideration.

Mr. Speaker, energy drives almost every element of our lives and our livelihoods. In addition to what is noted above, the Department continues its work on outreach, partnering where possible with other organizations, such as Greenrock, to ensure that the energy efficiency and conservation messaging is consistent and sustained.

Mr. Speaker, we believe that creating a culture of energy efficiency and conservation will be a major pillar of any national energy plan, and so we must put our collective support behind any initiatives that help educate consumers on how they can reduce their consumption and better control their energy expenditures. Conservation is generally the cheapest, most effective means by which the greatest impact can be made.

Finally, Mr. Speaker, I would particularly like to thank the Bermuda Energy Working Group [BEWG] for their sterling efforts thus far in providing valuable input to the Energy Department on a range of energy policy and related issues.

Thank you Mr. Speaker.

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