Belco could be burning natural gas instead of heavy oil fuel within four years, if energy regulators back the utility’s plans to change its principal electricity-generating fuel.

That’s the view of Walter Higgins, the chief executive officer of Ascendant Group Ltd, Belco’s parent company, who is preparing to submit plans for the future of the Island’s electricity supply to the Energy Commission within the coming weeks.

Mr Higgins estimated that the infrastructure and plant investment needed to achieve the conversion to natural gas would cost in the region of $170 million.

The plan envisions liquefied natural gas being shipped in from the US, delivered to a purpose-built terminal, where it could be stored and regasified, and delivered via a pipeline to Belco’s Pembroke power plant for burning.

The details are contained in Belco’s ‘Integrated Resource Plan’ (IRP) which Mr Higgins hoped to have ready to present to regulators by June or July. As well as conversion to natural gas, the plan includes an expanded role for solar energy and an energy conservation programme.

Mr Higgins said the company would seek permission to carry out in-depth studies in order to make accurate estimates of the impact on electricity prices.

“It’ll take us about eight months of serious, detailed engineering before we can go back to the regulators and say ‘here’s what it’s going to cost and here’s what the effect on the customers’ rates would be’,” Mr Higgins said.

“If they say ‘go’, it’s about two years from there to convert to natural gas — so about 2019, probably.”

The purpose of the IRP is to propose optimal solutions for delivering a reasonably priced and reliable electricity supply, while also working towards policy goals, such as reducing emissions and increasing use of renewable energy.

Mr Higgins said conversion to natural gas would be worth the investment for the Island. Thanks to advances in gas extraction techniques, notably ‘fracking’ which allows access to gas deposits trapped in subterranean rocks, the US has an abundance of natural gas reserves.

While energy markets tend to be volatile, the glut of ‘shale gas’ has created a reliable supply and a relatively stable market for natural gas. The fuel adjustment charge on Belco bills, which fluctuates with fuel prices, would be less prone to violent swings with natural gas, Mr Higgins said.

Belco has 17 generators, of which five are combustion turbines and the rest are reciprocating engines that work like diesel engines. Most of these can be converted to burn natural gas, but not the oldest ones — which are close to 30 years old and are already operating inefficiently, the CEO added.

Gas also burns more cleanly. “The conversion will solve emission problems — both the things you see coming out of the stacks today and carbon emissions,” Mr Higgins said. “We can reduce the carbon emissions from our plant by about 30 per cent by converting to natural gas.

“In the world of the future, cutting carbon emissions won’t be a matter of being good, but rather mandatory. That’s coming, it’s just a matter of when.”

Solar energy can play a growing role in the electricity supply, the IRP will argue.

“Bermuda’s a good candidate to deploy solar energy in a couple of ways,” Mr Higgins said.

“One is rooftop solar thermal to heat the hot water in your house. There are about 10,000 good candidate rooftops in Bermuda (out of a total of a bout 36,000 rooftops). They face south and are not shielded by trees or other buildings.”

One drawback of solar is the difficulty in storing the electricity produced for use when the sun is not shining. In the case of water heaters, however, the heat is stored in the water.

There is also the potential for “utility-scale” solar in Bermuda, thanks to a fall in the price of solar panel technology that makes it more economically viable, Mr Higgins said.

The third leg of the IRP is energy conservation, an area in which there is much room for improvement.

“People are still not doing much energy conservation,” Mr Higgins said. “The building codes are not as strict as they might be, and existing housing stock is generally not built to good energy efficiency standards, even for this mild climate.

“With utility-sponsored energy conservation, we could go the house, wrap the water heater, tint the windows, insulate the attic — that becomes part of the resource that’s helping everybody’s bill go down, because it means we don’t have to burn as much oil or build as many engines.”

Another proposal in the IRP features advanced metering systems that could give both Belco and its customers real-time information on electricity usage.