On March 21st the Minister of Economic Development, Dr Grant Gibbons, tabled the Viability of Liquefied Natural Gas in Bermuda Report in the House of Assembly. The Report was commissioned by the Department of Energy and produced by Castalia Strategic Advisors, in order to assess the viability and trade-offs relating to the potential deployment of LNG in Bermuda.
Bermuda is at a critical point in planning for a low-cost, reliable, and sustainable electricity sector. Near complete dependence on imported oil for electricity has led to high prices, and left Bermuda vulnerable to price shocks as global oil prices fluctuate. As the country’s existing thermal generation assets near the end of their useful lives, evolving technology and international fuel markets have given Bermuda an opportunity to invest in lower-cost and more sustainable alternatives than oil-fired generation.
Specifically, low natural gas prices and at least two project proposals to import liquefied natural gas (LNG) to Bermuda have led the Government to consider whether switching to natural gas is in the country’s best interest. To help determine its position on LNG, the Government has commissioned this study, which examines the economic viability of LNG for Bermuda. We conclude that importing LNG could lead to lower electricity prices and lower emissions from electricity generation. As a result, we recommend a process for determining the best way for Bermuda to procure LNG.