The Bahamas energy sector is undergoing an unparalleled transformation. Following the publication of the Electricity Act 2015, the country is moving away from a monopolized power sector to a more liberalized generation market and opening doors for renewable energy.
The Electricity Act, in force since January 2016, establishes the Utilities Regulation and Competition Authority (URCA) as Bahama’s power sector regulator, assuming responsibility for all activities related to generation, transmission, distribution and electricity supply.
The country’s electricity market is controlled by state-owned Bahamas Power and Light (BPL), 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.
The new regulation opens the market for private competition and requires anyone who generates, transmits, distributes or supplies electricity to have a license. On August 5, 2016, URCA has issued a license to BPL and is in the process of regularizing the status of GBPC.
In 2015, all the 2.8TWh generated in the country came from oil and diesel plants. The Bahamas’ dependence on imported oil and diesel, along with its high electricity tariffs, highlights the need for renewable energy development to improve energy security and reduce prices.
In 2013, the government launched the National Energy Policy 2013–2033, which set out its vision for a reformed, modern, diversified and efficient sector. 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. The Electricity Act enforces this goal by requesting BLP and other public suppliers to develop plants to increase clean energy generation.
On March 1, 2017, BPL announced the recommencement of the country’s Small Scale Renewable Generation (SSRG) program. The Renewable Energy Self-Generation Program was established in May 2015 but suspended in November 2015 due to changes from the energy sector reform process. Under the program BPL’s residential and small commercial customers with clean energy self-generation facilities can interconnect with the grid, deliver surplus generation, and obtain a credit in the electricity bill for any excess capacity exported to the utility.
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 (BAU) 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 $900 million.