STATEMENT BY PREMIER AND MINISTER OF FINANCE
HONOURABLE ANDREW A. FAHIE
DURING THE 13TH SITTING OF THE SECOND SESSION OF THE FOURTH HOUSE OF ASSEMBLY
Renewable Energy for Anegada
21 July, 2020
Mr Speaker, over the past 16 months, as a Government, we have been committed to ‘Good Governance’ and I find it important to make this statement on renewable energy for Anegada.
Honourable Members would recall that your Government listed alternative energy as one of the key issues of the 2019 General Election.
We promised that if given the opportunity, we would make alternative energy not just a conversation, but a commodity to households across our Territory.
The impact on our electricity supply caused by Hurricane Irma in 2017 reminds us of the fragility of traditional sources of energy, which sources are also damaging to the environment.
The impact of climate change globally has been significant especially over the last decade, and the continued use of fossil fuels is seen as a major contributor.
The Virgin Islands is especially vulnerable to the impact of climate change due to changing weather patterns, the increased strength and unpredictability of storms and their potential impact on tourism, other sectors and the overall economy.
The occurrence of the massive flood and two strongest hurricanes (Irma and Maria) in the history of the Atlantic season in 2017 is strong evidence of this.
As such, use of solar, wind, and water as alternate sources of energy must be at the forefront of the Territory’s future energy needs.
Mister Speaker, I said during the Elections that moving forward with the National Energy Transition Policy in a thoughtful and proactive manner was something which must be given the priority it deserves.
I must say that this Government is committed to making the use of renewable energy on a significant scale throughout the Territory, a reality.
Within the first month of your Government’s tenure, the BVI Electricity Corporation (BVIEC) was mandated to take a leading role in driving the Territory’s transition to Green energy sources.
The BVIEC, almost immediately, launched its Green energy initiative in which residents wishing to install distributed generation renewable energy were encouraged to either download the Small-Scale Renewable Energy Application from BVIEC’s website (bvielectrictity.com) or to obtain hard copy applications at the BVIEC branches located at Long Bush, Road Town, and the Valley, Virgin Gorda.
Mr Speaker, In the 2020 Budget Address and at other times, your Government has highlighted that it has embraced the national vision of transforming the Virgin Islands into a leading regional economy by 2025 through entrepreneurship, innovation and local and foreign investment.
As a Government, we have also set the target of becoming at least 60 percent Green by 2030.
Together and consistent with the theme of the Government’s Legislative Agenda outlined in the Speech from the Throne – “Going Green, Going Smart”, we have adopted certain policies and initiatives to support our movement in the direction of cleaner, affordable, sustainable, and reliable energy sources.
All new public infrastructure projects will embrace smart technology to increase energy efficiency; lower operating costs and reduce the carbon footprint.
Your Government is offering for one year the benefit of zero tax on the import of clean energy systems such as solar and wind power generation equipment, and hybrid vehicles.
Incentives are also being offered for converting from traditional petrol and diesel to liquefied petroleum gas which is cheaper and more environmentally friendly.
In February, 2020, Honourable Members would recall, I explained that switching away from dirty fossil fuel can save the people of the BVI $78.5 million dollars over a five-year period initially, and more thereafter.
All fossil fuel consumed in the BVI is imported from other countries.
The average base cost of fossil fuel over the past five years is $2.18 per gallon. The average consumption of fossil fuel in the BVI is presently 1 million gallons per month.
Therefore, the BVI consumes approximately $2.18 million in fossil fuel per month at base cost. That is $26.16 million per year, and $130.8 million over five years, that is leaving our shores to enrich other countries and other economies.
The BVI people and our economy, therefore, become $26.16 million poorer every year by importing fossil fuel.
As our economy grows our fuel consumption will grow even further beyond the 1 million gallons per month, and this means even more money will be leaving our shores.
Green energy is free. Thus, by reducing our fossil fuel consumption by 60 percent, we can reduce this leakage by about $15.7 million per year, based on the current usage and prices.
That would be savings for the people of the Virgin Islands of $78.5 million dollars over the first five years when we reach the 60 percent target mark.
But, in the meantime, while we are transitioning, there will also be significant savings which will be increasing and building as we get closer to our target.
May I also add that the targets set by your Government are in sync with the recommendations of the BVI Resilient National Energy Transition Strategy 2018, which identified the opportunity to diversify sources of technology by increasing renewable energy penetration by up to 34 percent. This is encouraging and does not stop us from aiming for higher penetration by 2030.
Another major initiative in the direction of green energy is the creation of a micro-grid on Anegada.
Mr Speaker, the challenges citizens face in accessing a reliable power supply are well known, especially our citizens on the Sister Islands.
For many years now we have been talking about it, and your Government made a commitment to doing something about this problem and improving the quality of life of our people living on the Sister Islands.
Regardless of where our citizens live in the Virgin Islands, we must ensure equality across the board.
This, coupled with the population size and topography, makes Anegada ideal for this solar project. This micro-grid will assist with supporting reducing the number of resources needed to run the energy plant on Anegada.
One of the complications with the present system is getting fuel to Anegada to run the power plant and this affects the reliability of electricity supply on the island.
The BVIEC is working with a 10-year energy outlook, and the corporation aims that by 2021, Anegada will have an 80 percent reduction of inputs to fossil-fuel based energy generation.
This will result in significant savings for the Territory and reduce the financial burden that the BVIEC is carrying.
In October, 2019, the BVIEC issued a Request for Proposals (RFP) for the Anegada Hybrid Renewable Energy and Battery Energy Storage System Project. This RFP garnered interest from approximately 135 companies requesting the RFP.
In brief, the scope of the project is the installation of a combined solar photo-voltaic (PV) and Battery Energy Storage System (BESS) on the island of Anegada.
The combined project capacity will be 2.1 Mega Watt direct current (MWdc), with 1.2 Mega Watt direct current (MWdc) of solar PV and 930 Kilo Watt-4hour (kW-4h) BESS.
The project includes the installation of a Micro-Grid Controller which will control the PV, BESS and a backup diesel generator which is currently the sole source of electricity for the island.
In December 2019, a mandatory site visit was conducted, at which 30 different companies were represented. Five companies subsequently submitted bids for the project in February 2020.
Following a thorough and rigorous transparent evaluation of the bids submitted, the project was awarded to the company Power52 Clean Energy.
On 17 July, 2020, the Chairman of the BVIEC in a press conference announced that Out of a total score of 100 points that could be achieved, Power52 scored the highest out of the five bidders, with a total score of 81 points. Power52’s Energy Procure Construct price of $4,687,944.72 was the lowest costs presented for the project at $1.59/Wac substantially lower than most of the other bidders. Their Power Purchase Agreement rate at $0.22 was additionally also much lower by $0.14 in comparison to the closest competitor.
I thank the Junior Minister for Tourism Honourable Sharie de Castro for her support in this endeavour and for delivering remarks on my behalf during this announcement.
Mr Speaker, this type and size of project is something that is new to the BVI. It involves technology that we are only just becoming familiar with.
Of course, based on the Territory’s vision for its energy supply, and global trends, we know that green energy sources and technology will become more widely used.
We are also certain that in the BVI the demand for these products and the complementary services will increase.
This will spurn job and career opportunities for our people who choose to train, to equip themselves, and to develop and strengthen their competencies in these areas.
Involvement of an international company in this project, working alongside our local people, will provide the platform for technology and knowledge transfer to take place.
I look forward to the equipping of our BVI people for the ownership, employment and economic opportunities in the green energy sector.
As we move to extend this power generation model to the Sister Islands, and as individuals and businesses switch to the green solutions, our technicians will be at the forefront of this energy revolution – leading the charge on the ground.
The result will be the creation of a new industry; one which, hopefully, our people will be able to export to our neighbours, and the rest of the world.
Hopefully, this new industry can also increase our acceleration towards a wider diversification of the economy by improving our suitability for more digital industries, and driving innovation along the lines of the modern technology that the world is hungry for and is in need of.
Mr Speaker, the pieces of the tapestry are starting to come together.
Catastrophic hurricanes, most recent as 2017, have created some setbacks for us.
COVID-19 is creating obstacles and challenges for countries around the world, and small countries such as ours are not exempted.
But, we in the BVI always try to find some positive aspect to these negative events.
The lesson that must be learnt from these chains of events is that they highlight the areas that we need to improve on to become more resilient.
They show us where we can make adjustments and improvements to be more competitive, especially in the economic context.
We have to push with the diversification of our economy and the development of new revenue streams.
We also have to push to become more efficient. Green energy allows us to lower costs and increase productivity, all while creating new industries and new jobs, reducing pollution and reducing the amount of money that leaves these shores.
We must keep pushing ourselves.
And the BVIEC must be complimented for doing their part in pushing the transformation of energy in the BVI. Commendations and thanks must go to the Chairman of the Board of BVIEC, Mrs Rosemarie Flax, and the rest of the Board, the management Mr. Leroy Abraham and the staff. What we are achieving today and the great things that will be achieved in the future cannot be achieved without their hard work and dedication to duty.
We also thank successive Government for doing their part in strengthening the Territory’s energy capacity and infrastructure.
I look forward to the successful completion of the Hybrid Renewable Energy and Battery Energy Storage System Project on Anegada, and to the continued greening of the BVI.
I thank you, Mr Speaker.