NASSAU, BAHAMAS — A Bahamas Power and Light (BPL) report providing a review of Station A, which housed the Warstilla engines purchased for $95 million back in 2019, highlighted that the plant has to-date cost an additional $21 million.
The report dated July 30, 2023, which was prepared by BPL's CEO Shevonn Cambridge for Prime Minister Philip Davis and former Works and Utilities Minister Alfred Sears, was tabled in Parliament by Energy and Transport Minister JoBeth Coleby-Davis and highlighted numerous decisions and operational efficiencies which resulted in additional costs for the utility and ultimately consumers.
The report indicated that premature wear of the engine components resulted in an earlier-than-scheduled overhaul, with the cost to overhaul the units tripling to $6.7 million. It was also revealed that the projected $13.9 million two-year operations and maintenance agreement with Wartsilla ultimately became a $24.6 million deal over the course of the two-year contract and a third-year extension.
"Since 2021, BPL's New Providence generation has been supplemented by rental generation. In 2017, the company was already using 40 MW of rental generation and was forecasting a need for more to accommodate growth in New Providence as well as to ensure system stability due to the state of the company's generation assets," the report noted.
"BPL issued a request for proposals in 2017 soliciting 80MW of rental agreement. The RFP morphed into early discussions with shell NA to provide 275 MW of LNG-fueled generation for the entire island, however, those discussions were sidelined when a catastrophic fire at Clifton Pier Power Station C on September 2, 2018, resulted in the immediate loss of 60 MW of generation capacity from two of the company's most efficient units. BPL received a proposal from Wartsilla to supply 45-68 MW with permanent generation assets." the report stated.
A December 2018 communication between BPL and Wartsilla reportedly confirmed that BPL had decided to forego the engine's gas-ready capabilities. "Instead, BPL opted for engines to be tuned for improved operational efficiency on the selected primary fuel option HFO. The records further indicated that the intent would be to convert the engines during either the manufacturer-recommended 32k hours or 48k hours overhaul.
The report also reported that on February 28 2019, an amendment to the Engineer Procure and Construct (EPC) contract to install three additional engines to the original four in the initial contract. This would increase the total output from 75MW to 131.7 MW, a 75.6 percent increase in capacity and an 84.7 percent increase in cost engines were to be installed in a powerhouse built in 1981 which was already showing signs of deterioration. The total investment initially required to bring Station A online with 132 MW of generation assets was $95 million.
Cambridge said in his report that while it is ideal to have all seven units operational, the reality is that only five units can run simultaneously as a performance test has revealed that the collective vibration from the engines caused the building they were housed in to experience concrete spalling – or large pieces of concrete dropping from the structure.
BPL's present board and executive management decided to end the operations and maintenance agreement with Wartsilla on January 1, 2023, as there were no significant operational or financial benefits being derived from the agreement. The agreement was terminated with an annual savings of approximately $2.5.
Energy and Transport Minister said yesterday that for BPL vendors, all new contracts and possible consideration of renewal of existing contracts will be scrutinized and negotiated "to the most advantageous position for The Bahamian people." She said this will include the review of existing contracts to ensure that all contractual obligations are being met.
According to the Minister, deficiencies will be noted and brought in line with contract terms and conditions.
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