& CLEANER ENERGY
The North Power Station is being built at our existing Pembroke facility and will house our high-efficiency, four dual-fuel replacement generation engines.
THE CURRENT SITUATION
Nearly 50% of our current generating capacity (80 MW) is scheduled to be decommissioned by 2020. These eight old generators are unreliable, costly to maintain and at risk of catastrophic failure. Replacing the aged generators will be more cost-effective than continuing to operate and maintain them.
The replacement generation are dual-fuel engines that will run initially on fuel oil. There is the option of using natural gas and once the infrastructure is in place, it will then run primarily on natural gas, a cleaner and more efficient option. This also provides a redundancy for fuel supply and suitable remaining generators would be converted to natural gas operation to run cleaner and more reliably.
By running on natural gas the replacement generation could potentially add a 4MW heat recovery steam generator system, to further improve fuel efficiency by harnessing waste heat that would otherwise go up the stack. Together, these will be able to provide 60MW of dependable and flexible generating capacity.
The replacement generation will be complemented by our new Battery Energy Storage System (BESS), which will further increase the fuel efficiency of our generation system, support electricity power system stability and ultimately help reduce customer rates.
The replacement generation is expected to be completed by December 2019. A local civil contractor is conducting most of the construction activity, bringing in specialists where necessary.
Although the dual-fuel engines will initially run on fuel oil, they can primarily run on natural gas, which is cleaner and more efficient and use fuel oil as a back-up fuel supply. This clear, non-toxic liquid is the cleanest burning fossil fuel and the switch will reduce our emissions significantly.
This will be the equivalent of eliminating the emissions from every car in Bermuda.
Fuel oil prices are volatile, natural gas prices are more stable.
We will be able to negotiate long-term, low cost, fixed commodity contracts, which will result in more predictable rates for customers.
Between the replacement generation and the introduction of natural gas, we expect to save approximately $26 million per year on the maintenance, lubricants and fuel needed to continue running the existing aged generators.
We expect the introduction of natural gas to create commercial opportunities for Bermuda, as we will need to select a vendor to build, operate and maintain a natural gas import terminal and gas transmission pipeline to the BELCO plant.