Renewable energy to be sold back to grid

People who generate their own solar or wind powered electricity will be able to sell their excess power back to Cayman’s main grid from March this year.

Under the new system, consumers who sell the excess alternative energy they generate will be paid the equivalent of the fuel costs at the time, plus half a cent per kilowatt hour.

The Caribbean Utilities Company and the Electricity Regulatory Authority announced details of the new arrangement, known as the Consumer Owned Renewable Energy Programme, on Wednesday.

According to a press release, the CORE programme will enable customers in Grand Cayman to connect their renewable energy systems to CUC’s distribution system and reduce their monthly energy bills by generating their own power while remaining connected to CUC’s grid by mid-to-late March.

Philip Thomas, managing director of the ERA, explained that if, for example, the programme was introduced by this month’s billing period, CORE consumers would have been paid 17.8 cents per kilowatt hour – 17.3 cents being the fuel cost per kilowatt hour in December’s bills.

He said: ‘The credit for CORE that consumers will see is a variable depending on the price of fuel and lubricating oil used in the month by CUC. The credit will be the avoided cost of fuel oil and lubricating oil used in the month, plus half a cent per kilowatt hour of variable costs.

‘If the cost of fuel and lubricating falls… then naturally the CORE credit amount per kilowatt hour will reduce,’ he said. ‘If in the future the price of oil increases internationally, and CUC’s fuel factor increases then the CORE consumer will see higher credits for kilowatt hours exported to the grid.’

The programme was introduced following the granting of a new licence to CUC last year which retained the utility company’s place as Cayman’s exclusive distributor of electricity, but stipulated that it no longer had the monopoly on generating electricity. Under the terms of the licence, CUC had to put in place a mechanism for distributing excess power generated by consumers, and in September submitted to the ERA its plan for how it would buy that excess electricity.


But the method of how people who generate power will be credited has met with criticism from some proponents of alternative energy.

Jim Knapp, who is building his own solar-hydrogen powered home, said: ‘We are very disappointed with the decision to use “net billing” instead of “net metering”.

Net metering is where the meter runs backward and forward depending on the energy sold or used. This is the method most used world wide.

‘We couldn’t find a single country or state that uses what CUC has agreed with the ERA. The argument that infrastructure costs would be subsidised by non-CORE customers is ridiculous and is just CUC’s attempt to cloud the issue so that they make more money,’ he said. ‘They did not subsidise my renewable energy plant nor my distribution system to deliver clean energy to their grid, but they are going to charge their customers full price for that energy even though they only pay a fraction of its cost to us.’

He added: ‘Net metering is fair to all. If I produce 1 kilowatt of power for them but use 1 kilowatt later, it should net to zero. That’s how it is in the rest of the modern world and how it should be in Cayman.’

The new system was also criticised by the New Jersey-based renewable energy installation company contracted by Mr. Knapp to help him build his home.

Gian-Paolo Caminiti, chief operating officer of Renewable Energy International said: ‘As described, the tariff cannot be expected to encourage the commissioning of renewable energy systems on the island… On the contrary; if a customer puts energy back into the system, CUC pays him the wholesale rate and then either sells it back to him or to another customer at full retail rates.

‘In effect, this amounts to a policy of mandated charitable donation to the CUC if a customer puts a grid-tied renewable energy system in.’

Mr. Caminiti added that net metering policies, if implemented properly, could encourage consumers to install their own renewable energy systems. ‘The tariff policy described by CUC is a metering policy designed for its own benefit, not a net-metering policy, and has been described as being among the worst demonstrated practices for encouraging renewable energy deployment.

‘If the Cayman Islands government is serious about reducing its dependence on foreign oil, addressing climate change realities, while maintaining energy price stability to encourage growth, it will not institute this tariff as described.’

The move was cautiously welcomed by DiveTech’s Nancy Easterbrook, who along with her husband Jay, is in the process of building a solar- and wind-powered condo complex at Lighthouse Point. She hopes it is the first in a series of initiatives by the government to make the generation of alternative energy a viable and attractive option in Cayman, and that there would be some offset financing for people to install the very expensive solar, wind or geothermal generating equipment.

‘We’ve come a long way in a year,’ she said of the new alternative energy arrangement, ‘from nothing to having this in place.’

She added: ‘We think it’s awesome that renewable alternative energy being implemented in the Cayman Islands. We understand that CUC is a business and they have to operate for profit.

‘We hope that the government continues to get behind the efforts to eventually, maybe years or decades from now, get this island to be a carbon-free or at least carbon-neutral zone.’

Green advantages

According to the joint press release from the utility company and the regulator, using renewable energy sources will help to reduce dependence on fuel oil, diversify its power supply, lower sensitivity to fuel price fluctuations and help limit further increases in air pollutants including greenhouse gases.

Chairman of the ERA, Kendal Ryan said: ”We encourage consumers in a position to install renewables to assess their options for doing so.’

CUC’s President and Chief Executive Officer Richard Hew said: ‘This plan offers consumers who generate energy through renewable means that may not be continuous, the opportunity to interconnect with and benefit from the reliability of CUC’s electricity distribution system.’

According to the new arrangement, CORE participants will receive a credit for energy generated through renewable means. The CORE credit equates to costs which CUC avoids by purchasing CORE generation, such as fuel and lubricants plus an allowance towards other avoided variable costs.

The press release stated: ‘This billing arrangement will ensure that infrastructure costs required to operate the transmission and distribution system for CORE participants will not be subsidised by non-CORE consumers.

‘If the net energy for the month is negative (CORE generation exceeds consumption), then the surplus energy will be banked for that consumer to use against net positive consumption in the future.’

CUC will draw up a CORE Credit agreement with consumers.

There will be a limit of 10 kilowatts of capacity – or the peak load of customer’s premises if less than 10 kW – for each residential CORE installation.

The programme will be in place for a trial period until December 2010, when a review of the operations will be carried out.

Customers who want to get more information or sign up to use the system should contact CUC customer service on 949-4300.

According to CUC spokeswoman Pat Bynoe-Clarke, individuals who want to sign up for the CORE programme will be able to obtain meters from CUC, once the company gauges the level of interest.

‘We will wait until we know what the take-up rate will be. People can now come in and apply, so we will know how many are interested and we can move forward.’