TCI: Navigating the energy trilemma amidst soaring energy demand
In the sun-drenched Turks and Caicos Islands, a quiet storm is brewing—the escalating demand for electricity.
As this British Overseas Territory experiences rapid economic growth, fuelled by tourism, real estate, and government investments, the need for reliable, affordable, and sustainable energy has never been more critical.
There are three challenges: energy security, energy sustainability and energy affordability, which have to be addressed when facing investments in energy and demand which implies a trade-off when choosing one over the other.
Fortis TCI, the sole provider of electricity in the islands, is at the heart of this challenge, grappling with the complex task of balancing these competing priorities, often referred to as the “energy trilemma”.
In a high-stakes battle over electricity rates, the utility company is currently locked in a standoff with the government over a proposed 6% rate increase, which would amount to an additional $2 to $15 per month for most residential customers if approved. The company argues that the increase is essential to meet the demands of a booming economy and escalating costs, while the Governor has denied the request, demanding a more transparent and competitive rate structure.
Devon Cox, Senior Vice President of Operations and Assistant Corporate Secretary at Fortis TCI, painted a vivid picture of the surging energy demand during a recent media session.
He said: “We are in a high growth environment” illustrating a projected 8.1% year-over-year growth in energy demand from 2021 to 2028.
This growth, driven by a booming tourism industry, ambitious government infrastructure projects, and a thriving real estate sector, has put immense pressure on the utility company to keep pace.
Cox highlighted a recent peak demand of 48.6 megawatts in Providenciales, a figure that is five years ahead of forecast.
“That is something, obviously, in order to be able to meet that, we need to now be able to make investments in order to be able to achieve that,” he explained.
This underscores the urgency for Fortis TCI to not only meet the growing energy needs but also to do so in a way that is both financially sustainable and environmentally responsible.
The company’s commitment to renewable energy is evident in its significant investments in solar power.
However, Cox cautioned that a balanced approach is essential. “Many times when you’re in conversation with folks, they say, well, the sun is free. It should be. Shouldn’t cost anything. Well, that’s not true,” he stated.
He explained that solar power, while a key part of the solution, has limitations, particularly in meeting peak demand which often occurs after sunset.
Fortis TCI is exploring natural gas as a potential “bridge” to a more sustainable energy future.
The company has already commissioned a 9.3 megawatt generating unit capable of operating on natural gas, which offers lower carbon emissions and greater price stability than diesel.
“We most certainly see natural gas as a bridge. The world is seeing natural gas as a bridge to the cleaner future,” Cox affirmed. The spectre of hurricanes, an ever-present threat in the Caribbean, adds another layer of complexity to Fortis TCI’s operations.
Cox emphasised the importance of building resilient infrastructure to withstand these natural disasters.
“Hurricanes can stop our business,” he warned. “When hurricanes hit you, it literally push your country back 10 years if you’re not able to recover.”
Fortis TCI’s strategic approach to navigating the energy trilemma is underpinned by a commitment to data-driven decision-making and proven technologies.
The company has conducted feasibility studies, such as wind studies in North Caicos and solar land availability studies, to guide its investment choices.
During her presentation, President and CEO of FortisTCI, Ruth Gardiner Forbes, emphasised the necessity of the Company’s proposed 6% rate hike, stating that the company has absorbed costs in the past but the current situation necessitates the proposed adjustment.
She acknowledged the difficulty of requesting rate adjustments, stating, “This is one of the most difficult things that we have to do, is go to our customers and ask for an increase every year.”
Forbes highlighted that FortisTCI has absorbed costs in the past, opting to delay rate increases even when warranted.
However, she asserted that the current situation necessitates the proposed adjustment.
“This rate increase is necessary,” Forbes stated. “We have to make the application because amidst all this growth, we’ve had to make a lot of investments to keep up with the growth”, she stressed.
The CEO underscored that several factors are contributing to the need for increased rates, including cybersecurity risks, wildfire risks, supply chain challenges, and evolving regulatory requirements.
The energy landscape in Turks and Caicos is complex and dynamic.
Fortis TCI, while acknowledging the challenges, is proactively addressing them through a combination of strategic investments, technological innovation, and a commitment to sustainability.
The company’s executives underscored that these efforts are not just about keeping the lights on; they are about powering the future of Turks and Caicos.
Source: TCweeklynews
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