The Bahamas’ dependence on imported oil and diesel for generation, along with its high electricity prices, highlights the need for renewable energy development to improve energy security. More local policy action will be required to spark a clean energy boom.
The country’s electricity market is controlled by state-owned Bahamas Electricity Corporation (BEC), which owns 76% of the total 575MW of installed capacity and controls generation, transmission and distribution in most of the islands. Grand Bahama Power Company (GBPC), a private company, controls generation, transmission and distribution on Grand Bahama Island. Electricity is distributed among 16 isolated grids.
According to the Out Islands Electricity Act, private utilities are allowed to supply power to the Family Islands (outer islands) if it is in the nation’s best interest, but the provision is ambiguous and open to interpretation. Furthermore, BEC is not required to buy electricity from independent power producers. Both these conditions make it challenging for newcomers to gain a foothold in the country, which includes more than 700 islands. Bahamian retail electricity prices remain high, but they decreased by 10% from an average of $0.295 per kWh in 2014 to $0.266 per kWh in 2015 due to a reduction in the cost of generation fuel. In 2013, its average electricity retail rate was 50% above the average price in the Caribbean.
In 2013, the government launched the National Energy Policy 2013–2033, which set out its vision for a reformed, modern, diversified and efficient sector by 2033. The document covers four goals related to energy conservation and efficiency. One of its priority areas is the development of renewable energy sources, with a target of 30% clean energy generation by 2030. Despite this policy, as of 2015, no compulsory legislation had been published to propel the country toward achieving these goals.
The Renewable Energy Self-Generation Programme was established in May 2015, but owing to legislative and regulatory changes, it was suspended. As of May 2016, the government had not said when or even if the programme will be restarted.
In November 2015, the government submitted its Intended Nationally Determined Contribution (INDC) to the United Nations. The document reaffirms the islands’ energy target and commits conditionally to cut greenhouse gas (GHG) emissions by 30% below the business-as-usual scenario by 2030. The commitment depends on international support in the form of finance, investment, technology development and transfer as well as capacity-building. The cost of implementing the mitigation actions required to achieve the goal is estimated at $900m.
Bahamas gained three places in Climatescope 2016 to take 50th position with a score of 0.75. The country’s 2015 score was 0.48. Its biggest improvement was on Enabling Framework Parameter I.
On Enabling Framework Parameter I, the country placed 55th, reflecting the lack of supportive policies, and almost total absence of clean energy development to date.
Bahamas placed 22nd on Clean Energy Investment and Climate Financing Parameter II, its highest ranking in this survey. A positive factor was its low (4.75%) average cost of debt.
On Parameter III, the country ranked 53rd, two places down from last year. The sector had just five clean energy value chains and one financial institution.
It took 51st position on Greenhouse Gas Management Activities Parameter IV, a decline from 49th the year before. Among its few attributes in this area is a GHG emissions reduction target.
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