The Electricity Regulatory Authority of the Cayman Islands has announced it will invite bids from power companies next year to generate additional electricity capacity in Cayman.
If an electricity company other than the Caribbean Utilities Company is chosen to provide the additional power, it will be the first time CUC will face a competitor in generating electricity in Grand Cayman.
According to a news release issued Tuesday, the regulatory body this week launched the process of competitive bidding to provide extra power generation capacity – up to a potential 36 megawatts by 2016.
Louis Boucher, acting managing director of the Electricity Regulatory Authority, said, “In 2012, the authority will undertake a rigorous process of reaching out to potential bidders; establishing a qualified bidders list; issuing the request for proposals to those bidders; evaluating their proposals; and selecting a winning bidder. The evaluation will be based on objective criteria that will be laid out clearly in the request for proposals.”
A transmission and distribution licence issued to CUC in April 2008 mandates the power company to determine when Grand Cayman need additional electricity. It found that, due to projected peak demand growth and existing generating capacity becoming obsolete, there was a need for more electricity generation.
Mr. Boucher said the demand for extra electricity was based on projected growth, estimated through the number of work permits, planning permission applications for building projects and GDP, among other factors, as well the retirement of some of CUC’s existing generators.
He said that, according to CUC’s transmission and distribution licence, the company has to have a reserve margin of a minimum of 35 per cent and a maximum of 55 per cent of the Island’s peak load.
CUC relies on diesel generation to produce electricity for Grand Cayman and its power system has a combined capacity of 151 megawatts. The record peak load the company has experienced is 102 megawatts, in June 2010.
Sherri Bodden-Cowan, chair of the board of the authority, said, “Competition for new generation on Grand Cayman is one of the core principles on which new licences were granted to CUC back in 2008, and the authority encourages all qualified bidders to respond to submit statements of qualification for consideration. The authority will use these SOQs to determine the companies that will receive the request for proposals to provide this generation.”
Prior to the issuance of the 2008 licence, CUC had the exclusive right to generate electricity in Cayman. Since then, some home and business owners have generated their own electricity, which they can sell to CUC.
The licence retains CUC’s exclusive transmission and distribution rights.
In March 2009, CUC calculated Cayman needed 32 megawatts of additional capacity by 2013. This launched a bidding process which marked the first time CUC had potential competition for generating electricity. Kingston-based Jamaica Energy Partners was in competition with CUC on that bid.
However, six months later, in September 2009, the Electricity Regulatory Authority announced CUC had determined the economic downturn meant the projected additional capacity was not needed and the bidding process was cancelled.
Mr. Boucher said bidders who had expressed an interest in generating electricity in the earlier bidding process would be contacted to see if they were interested in rebidding.
In the latest certificate of need filed by CUC, the projected date for additional generation of 18 megawatts of power is 2014, with a second increment of 18 megawatts capacity needed in either 2015 or 2016, depending on the growth of the economy and development in Grand Cayman and the related demand for electricity.
The transmission and distribution licence requires CUC to maintain adequate reserves of power by identifying its needs three years in advance, taking into account the need for power, the retirement of existing generation plants and other factors.
Earlier this year, CUC invited expression of interest and preliminary proposal for the creation and operation of renewable energy generation facilities to generate up to 13 megawatts of energy on Grand Cayman.