Nearly a year after the Energy Commission denied Belco’s request to raise electricity rates so it could build a new power station, the company says it’s giving up its legal battle against Government.The company had sought a judicial review of the decision, but yesterday, Belco president and CEO Walter Higgins said the company had discontinued that legal battle.Belco said it needed to increase rates for a three-year period to that it could afford to replace ageing engines with new equipment that could keep up with growing demand.“Since filing the rate increase application in October 2011, important changes have occurred. Bermuda has continued to see an erosion of its economy and a decrease in population,” Mr Higgins said in a press conference at Belco’s headquarters.“The high price of oil used to fuel Belco’s generating plant has resulted in high overall electricity prices. Consequently, Belco’s electricity sales, as a result of the economy and high prices, have now fallen off for two years in a row. This all comes at a time when, despite decreased consumption of electricity, ageing equipment in our existing power plants needs to be replaced to ensure an ongoing reliable electric supply.”Mr Higgins added that with the reduction in overall electric consumption and the demand customers place on the company, he believes now is the time to review and reconsider both how and when to replace ageing power plants.“We recognise that the country has a desire for alternatives. We will examine those in the light of the new economic landscape that has seen fuel oil prices rise and become more volatile.”Mr Higgins said with the price of some renewable energy sources coming down and new opportunities such as the use of alternative fuels like liquefied natural gas (LNG), they are exploring all of their options.On Monday, Belco’s parent company Ascendant Group Ltd became the second company on the Island to apply for relief from the 60/40 rule, signalling that it’s looking for foreign investment. Obtaining alternative capital could help the company finance the building of a new power plant despite being denied the ability to raise rates.“For any company to build something, it’s got to have money,” Mr Higgins said. “And with this change in the law, we’re now able to seek money from overseas in greater proportion than we used to be able to get it.”Because there is a notice period involved with seeking relief from the 60/40 rule, the company cannot begin seeking funding until October 22.“It’s very important that we find money. The reason for the rate increase that was requested a year ago was to be able to access the money that it took to build the power plants to replace the ageing power plants and at the time, maybe supply some new [energy]. Now that load’s fallen off a little, maybe we need less new [energy] but we still need to replace the ageing power plants … and we still need money to do it.”Looking into alternative energy sources like solar or wind power may seem like a no-brainer, but Mr Higgins says it’s easier said than done. He said the company is focused on figuring out what the best and most cost-effective sources for Bermuda are, how they can make them work and how to fund them.“This isn’t something that we just woke up this morning and said, ‘by the way, we need to look at the alternatives,’ the company’s been doing that for years, but the situation’s not static here. The economy’s worse than it used to be, there are fewer people here, growth has fallen off, in fact it’s negative.“There are cheaper alternatives now than we used to think there were, relative to liquefied natural gas, the price of solar panels has been dropping worldwide, so all these new dynamics, along with now the ability to get capital from new places overseas, creates a new dynamic that needs to be further evaluated and our job is to come up with a solution that works for Bermuda.”The two most efficient sources of clean energy are geothermal and hydro and neither can be done here in Bermuda. Residents may think solar and wind are a sure thing for the island, but there are many factors that need to be considered.Mr Higgins says solar power can be done in three different ways. The first would be to put them on the rooftops of houses, but he said there are questions we need to ask ourselves: “How can it be done without losing the beauty of a neighbourhood? How can it be done without interfering with water collection? How can it be done in a way that’s safe and acceptable?”The second way would be to put solar panels on the rooftop of hotels, large buildings and warehouses.“That has probably a better cost profile than individual home rooftops because you’re doing bigger installations, you have better surfaces, better exposure — to get good sun, you’ve got to kind of face to the south,” he said.The third would be to utilise large spaces and put in what’s called utility scale solar collectors over a number of acres.“We need to look at all of those, he said. “We need to examine the price of each alternative.”“I will say this — if solar can work anywhere in the world, it ought to be able to work in Bermuda. We have the sun and unfortunately, we have high electricity prices as a result of the cost of oil. That’s where solar ought to work.”The greatest challenge however, is how best to deal with intermittency — the fact that solar power is only available at certain times of the day.“It’s not available when you have heavy cloud cover, like when you have a storm and it’s not available at night. Some people talk about putting storage systems in, but storage systems are expensive, they change the price of solar, you either have to back them up with conventional power plants like we have now or some other way if you want to have solar a mainstay of your system.”Another renewable alternative Belco is looking at that is relatively new but may have promise, is the idea of something being done with ocean currents or ocean thermal.“There are people that are doing that in the world and yes, there are a couple of companies that would like to do it here — we’ll talk to them to see how possible that is in the near term. We want to understand what they think they can do. We just don’t know yet, but there are people that have high hopes for that.”Wind is another alternative people generally think is simple and should work in Bermuda, but Mr Higgins says there are a couple of problems with wind energy one of which is aesthetics. He says residents need to ask if they want to see windmills when they’re on the beach.More important, Mr Higgins says, is the question of if there is enough wind here to make it a viable option and worth the expense to implement.“At the time we most need the wind, in the summer, the wind doesn’t blow much here — and that’s a problem,” he said. “The fact is, this isn’t West Texas where the wind blows all the time and you can make electricity with wind at a reasonable price.”While alternatives do exist for Bermuda in some way, just how they fit into a comprehensive plan is what needs to be better understood and Mr Higgins said Belco is working to find the best way to provide cleaner, reliable, sustainable and affordable electricity.“There is no silver bullet for Bermuda’s electric supply. Every one has a disadvantage, and every one has an advantage and trying to balance that so we have something we can count on every single day is really what planning is about.”