A proposal to drag Belco power generation into the 21st century could eventually cost half a billion dollars, the company said in an interview yesterday.

It would include, in one of the first stages, an ambitious multiyear plan to begin mounting solar panels on Bermuda homes for hot water heaters — targeting 1000 a year.

It would eventually, perhaps in the fifth year, also include the use of liquefied natural gas (LNG) fuel, removing the need for importing expensive oil.

Belco uses a million barrels of oil a year, at an annual cost of $150 million — 55 percent of the total cost of running the utility — including $15 million in government duty.

Belco’s parent company, Ascendant Group Limited, has an Integrated Resource Plan (IRP) that they say would generate a host of skilled and unskilled jobs, improve Bermuda’s balance of payments, reduce our carbon footprint, conserve energy, reduce pollution and contain household electricity costs.

At present, there is no regulatory framework in Bermuda that would allow Ascendant’s plan to proceed. The current regulatory regime, suitable in the past, will have to be discarded for a far more sophisticated administration.

And legislative changes are required before the appropriate framework will be put in place.

Ascendant’s President and CEO Walter M Higgins, told The Royal Gazette, “The government is committed to putting the right regulatory regime in place. They indicated that commitment in the Throne Speech last year. They want a 21st century regime in place that is in line with world standards to regulate the electric utility.

“Standard regulation today, allowing for our substantial costs to be recovered and accumulated in certain ways, is exactly what lenders will look for when they consider lending money to us to do this work.”

While the scheme to replace the current technology is pending, officials concede that they are not just faced with dated technology, but a facility that includes engines that are coming to the end of their useful life — and at least one which should have already been retired.

While in an ideal world, the company should have begun upgrading years ago, they know there is no time like the present.

Mr Higgins said, “The challenge Bermuda faces today is an ageing generating infrastructure with the engines near the end of their life, on average. Some of them are past the end of life.

“We have an oil burning infrastructure with all of the things that you can imagine are good and bad about that — highly transportable, highly dense, energy dense fuel.

“But it’s dirty. There is an issue if it is spilled.

“There’s sulphur in it, so there is a certain amount of pollution that comes out of those stacks. Soot can be a problem.

“We have to deal with it very carefully. And carbon dioxide, which is a world problem according to a lot of people, is also emitted in large quantities when you burn diesel or heavy oil like we do.

“And the third part of this is that every gallon of oil coming into this Island has to be paid for with money which is hard-earned by sending some product or service of value off the island.”

“That must be one of the things that make (Finance Minister) Bob Richard’s life hard.

“We are about cash-outflow when the Minister is trying to get product outflow and cash inflow.”