REMARKS BY CHAIRMAN OF THE BOARD OF DIRECTORS
BVI ELECTRICITY CORPORATION,
MRS. ROSEMARIE FLAX
GIS CONFERENCE ROOM
17th JULY, 2020
Junior Minister for Tourism – Honourble Sharie B. de Castro
Management of BVIEC
Representatives of the media
Personnel of the Government of the Virgin Islands (GIS Department)
I would first like to apologize for the length of my presentation this morning as the relevant subject matter is not only very important to the Territory, but as the old adage goes, in order to know where you are going you also need to know where you came from. I don’t think everyone is fully aware as to how long the BVI Electricity Corporation has been working to not only introduce renewable energy as an alternative energy source for the Territory but more specifically, how long BVIEC has been attempting to progress introducing renewable energy to the sister island of Anegada. So I crave your indulgence.
The BVIEC’s Power Development Plan developed over ten years ago for the period 2003-2013 was the organization’s road map at the time for how the organization would need to add new generation to its portfolio to meet the growing energy needs of the BVI. This plan included introducing alternative generation sources, unfortunately issues more immediate in stabilizing the Territory’s electricity supply took precedence which resulted in renewable energy being placed on the back burner.
Once the organization was confident that it had stabilized the Territory’s electricity supply with the completion of its Phase IV Development Programme in 2007; it swiftly started to explore opportunities to improve the operations of the business which included once again looking at how renewable energy can be used to diversify traditional means of energy production. Diversifying the means of energy production within the Territory with the introduction of renewable energy generation sources was to accomplish the following strategic objectives:
- Assisting in mitigating the effects of climate change
- Reducing the Territory’s dependence on fossil fuel; and
- Providing a certain level of energy security for the Territory.
In October 2013, BVIEC engaged the services of the prestigious renewable energy consulting firm DNV GL to support its efforts in developing a renewable energy strategy for the Territory. Less than a year later, BVIEC released its first Request for Proposal (RFP) for an aggregated renewable energy solar pv project involving installations at five locations being the Government of the Virgin Islands Central Administration Complex, the L shaped building at the Elmore Stoutt High School, the H. Lavity Stoutt Community College, the Terrance B. Lettsome International Airport and the Bregado Flax Educational Centre in Virgin Gorda. Unfortunately, shortly after the bids were received in late 2014, the Government of the Virgin Islands removed the airport location from the project which was coincidentally the largest site and made the project no longer economically viable.
Albeit this set-back, the Corporation made its first formal request to the Government of the Virgin Islands in March 2015 to increase the size of the leased property where the power station in Anegada is situated for the purposes of installing a hybrid renewable energy system.
On May 1, 2015 the legislation entitled the British Virgin Islands Electricity Corporation (Amendment) Act 2015 came into effect. This legislation was developed by BVIEC and permits renewable energy as an energy source within the BVI. The following year on October 13, 2016, the National Energy Policy was adopted by the House of Assembly. On November 1, 2016 the Corporation made a second request to the Government of the Virgin Islands to increase the size of its leased property for the purposes of developing a Renewable Energy Hybrid System on the island of Anegada.
On November 1, 2018 the British Virgin Islands Electricity Corporation (Renewable Energy) Regulations, 2018 came into effect providing the Territory with the comprehensive legislative and legal framework to advance the subject of renewable energy within the BVI.
In January 2019, BVIEC was formally notified by the Government of the Virgin Islands that approval was granted for the increase in size of the property which BVIEC is leasing where the power station is situated on the island of Anegada.
After having waited so long since its initial request to be provided with this additional property, BVIEC wasted no time in developing plans aimed at introducing renewable energy to Anegada. All of the case studies performed by various BVIEC industry partners such as the National Renewable Energy Laboratories (NREL), Clean Energy Solutions Center and DNV GL all concluded that renewable energy was a viable generation source for Anegada.
It is not widely known but the reality of the matter is the BVI Electricity Corporation subsidizes the cost of electricity for the residents of Anegada. Anegada as we all know is not connected to the main electrical grid which supplies eleven (11) islands in the BVI. And because of this, the revenue derived from Anegada cannot cover the cost of maintaining its operations; particularly, the cost of fuel for Anegada is significantly higher than the fuel used to produce electricity on the main grid.
For example, the fuel surcharge being applied to all customers’ bills during the month of July including Anegada is $0.03 however, if BVIEC was to apply the actual fuel surcharge incurred to the Anegada residents’ bills it would be $0.07.
At a time when BVIEC is still struggling financially as a result of the devastation caused by the 2017 hurricanes which reduced its customer base, bearing in mind that every damaged property across the BVI that you see where the owner has not recovered from the ravages of those hurricanes, was once a customer of BVIEC, the current COVID-19 pandemic has now only compounded the situation. This is also one further reason why BVIEC is looking forward to the swift execution and completion of the Anegada project, which will bring much needed financial relief to the organization.
On June 21, 2019 the BVI Electricity Corporation executed an Advisory Services agreement with DNV GL Energy for support in the preparation of the technical specifications for the renewable energy equipment to be installed and used on Anegada which would consist of a combined solar PV and Battery Energy Storage system.
The tasks to be completed under this Advisory Services Agreement included:
- Conducting a Sizing Analysis which included the development of Solar + Storage sizing recommendations for the project at the following levels of annual diesel consumption offset: 50%, 70%, 90%, and 100% in order to drive the project requirements to be outlined in the Request for Proposal (RFP).
- Providing the Geotechnical Specifications to be used to perform a geotechnical investigation at the project site that would further instruct the RFP participants.
- The development of an RFP including operational objectives, bidder technical, financial and experience qualification requirements, schedules/timeframes, a diagram and description of the conceptual design, bidding rules inclusive of a mandatory site visit, evaluation criteria, and publication of the project at conferences, journals and publications within the international market.
- The preparation and delivery of the technical specifications for the equipment of the renewable energy project which would describe the requirements of a new solar PV + BESS power plant in sufficient detail to allow reputable and experienced bidders to prepare a detailed bid package and to ensure that the eventual design represents a high quality, robust, project that complies with applicable codes and standards.
- Bid evaluation support including receiving potential Bidders’ questions and providing answers to them, providing technical consulting services to support Bidders’ requests for clarifications and to review the proposals submitted by Bidders for both the Engineer, Procure, Construct (EPC) and Independent Power Producer (IPP) options.
- DNV GL would support BVIEC in negotiating the contract terms with the selected Bidder including a review of all technical and commercial items.
- DNV GL would review the selected contractor’s design calculations and documents and opine on whether the applicable codes and standards were respected.
- During the construction phase, DNV GL would monitor work quality, adherence to contract specifications and applicable norms, prudent industry practices and compliance with quality programs from the contractor.
Following the development of the Geotechnical specifications, on September 3, 2019 the BVI Electricity Corporation engaged the services of Jaca & Sierra Engineering, to conduct the geotechnical investigation which was required to evaluate the suitability of the subsurface conditions for the project from a geotechnical standpoint, the results of which were utilized in developing recommendations for the design and construction of the project, and for the development of the scope and budget for the EPC contractor.
The BVIEC publicized the project in various local and international markets including the Caribbean Renewable Energy Forum (CREF), Solar Power World, PV Magazine, Solar Industry Magazine, Rocky Mountain Institute (RMI), Caribbean Electric Utility Service Corporation (CARILEC) of which BVIEC is a Founding Member, BVIEC’s website, and local online media.
On October 16th, 2019 the British Virgin Islands Electricity Corporation issued the Request For Proposals (RFP) for the procurement and installation of a combined solar PV and Battery Energy Storage System on the island of Anegada for a combined capacity of 2.1 MW.
A stringent guideline was put in place to determine who would be issued the RFP including:
- Is the request from a well-known EPC contractor?
- Does the company develop renewable energy projects?
- Is the Bidder a well-known BVIEC supplier?
- Has the Bidder provided proof of their market experience/presence?
During this phase of the process,
• 135 companies contacted the BVI Anegada RFP inbox to request a copy of the RFP including big players in the renewable energy industry such as Tesla, Abengoa, Worley, SMA, Wartsila, and Enel X.
• Of these 135 companies, 76 were provided with a copy of the RFP based on the screening process;
• Of the companies which received the RFP, a total of 30 (~40%) sent signed confirmation of intent to participate in the mandatory site visit.
The mandatory site visit occurred on December 11, 2019 with a follow-up Q&A session held on Thursday 12th December 2019 at the Village Cay Conference Room to provide Bidders the opportunity to request any clarifications which they needed concerning the technical specifications issued and the site visit. Both the site visit and follow up session were well received by all Bidders to the tune that BVIEC had set a new bar for conducting a project site visit.
Once the RFP submission deadline was achieved on February 24, 2020 the rigorous exercise to evaluate the tenders received in terms of adherence to the bid specifications issued in the Request For Proposal (RFP) began. Bids were received from five (5) companies including Advanced Solar Products of USA, MAN-HEG of USA, Power52 of USA, Tugliq of Canada, and Virtual Engineers of Canada.
On March 31, 2020 after obtaining the consent of all the Bidders, the BVIEC issued a Press Release advising the public that following the successful site visit completed on December 11, 2019 for the Anegada Hybrid Renewable Energy and Battery Storage System Project, it had received EPC prices from five (5) bidders including a snapshot of the main characteristics for the project such as Solar DC capacity, storage capacity, claimed diesel offset, and price.
The criteria from which the companies who submitted bids for this project were judged on included qualifications and experience, technical proposal, contractual, Cost (EPC & PPA), and diesel offset for a total combined points of 100. Following this grading criteria:
For the EPC scenario
Advanced Solar Products received 72 points
MAN-HEG received 74 points
Power52 received 81 points
Tugliq (Option 1) received 63 points
Tugliq (Option 2) received 55 points
Virtual Engineers received 48 points
For the PPA scenario:
Advanced Solar Products received 76 points
MAN-HEG received 53 points
Power52 received 81 points
Tugliq (Option 1) received 78 points
Tugliq (Option 2) received 73 points
Virtual Engineers received 52 points
Power52’s EPC price of $4,687,944.72 was the lowest cost presented for the project at $1.59/Wac substantially lower than most of the other Bidders. Additionally, their PPA rate at $0.22 was also much lower by $0.14 in comparison to the closest competitor. Therefore, based on the overwhelming results of the bid evaluation process in favour of Power52 Clean Energy the Board of Directors made a decision to award the Anegada Hybrid Renewable Energy and Battery Energy Storage System Project to Power52.
BVIEC is anxiously looking forward to working with Power52 as its strategic partner in delivering energy diversity and sustainability to the residents of Anegada.
Ecclesiastes 3:1 states “To everything there is a season, and a time to every purpose under the heaven” and I can assure you as Chairman of BVIEC this is the season of energy transformation for the BVI.
ANEGADA YOU ARE GOING GREEN!!
In closing, I would like to thank the dedicated and committed team at BVIEC for their hard-work and diligence in getting this project to this stage. Should everything work as planned recognizing the current COVID-19 pandemic, it is BVIEC’s desire that this project will be completed and commissioned prior to Anegada Lobster Fest 2021.