CUC reviewing alternative power bids

cuc hq lg

Caribbean Utilities Company has short-listed candidates from more than
50 proposals it received to supply renewable energy to the power grid in
Grand Cayman.

According to the Electricity Regulatory Authority, CUC is preparing a report on which proposals it is recommending.

The power company received the proposals four months ago, by the submission deadline of 31 October, 2011.

Some 30 companies submitted 52 proposals in response to a CUC request for expressions of interest and preliminary proposals for the financing, construction, ownership and operation of up to 13 megawatt renewable energy generation facilities.

Currently, CUC’s 17 generating units – 15 diesel and two gas turbines – have a combined capacity of slightly more than 151 megawatts. The record peak load the company has experienced is 102 megawatts, in June 2010.

The renewable energy proposals submitted to CUC included wind, power and ocean technologies.

CUC’s request for expressions of interest, issued last August, stated that the power company planned to accept up to 13 megawatts of renewable energy.

“The ERA is awaiting CUC’s report on which proposal(s) they recommend to move forward with,” according to a statement released this week by the regulatory body on its website. “Investors interested in the development of large scale alternative or renewable energy development in the Cayman Islands should contact the respective licensee and the ERA.”

According to CUC’s request, the selected investor would become an independent power producer, which would enter into a power purchase agreement with CUC for the supply of electricity from the alternative energy generators.

The Electricity Regulatory Authority will review and approve that power purchase agreement, after which the selected renewable energy provider would need to secure a generating license from the regulator.

Louis Boucher, acting managing director of the Electricity Regulatory Authority, said no deadline had been set for when CUC would supply its recommendations to the regulatory body.

Less than 1 per cent of CUC’s electricity is powered by renewable energy, Mr. Boucher said.

The only renewable energy on CUC’s grid is power sold to the company by consumers who generate the electricity via solar or wind power means.

Under a Consumer Owned Renewable Energy programme, known as CORE, which was revised last year, consumers sell energy generated from their solar panels or wind turbines to CUC at 37 cents a kilowatt hour and buy back power from CUC at the current retail rate.

Mr. Boucher said nine consumers had signed up for the CORE programme’s revised feed-in tariff structure, including eight residential homes and one small commercial operator.

A one-year pilot run of the CORE programme’s feed-in tariff structure, or FITS, was completed at the end of January. Mr.

Boucher said it was being reviewed and the regulatory authority was “in discussions with CUC on how to better incentivise it”.

That revised CORE programme had a quota of 1 megawatt of energy, but only 8 per cent of that quota was taken up by the consumers who signed up for the scheme.

“If the 13 megawatts CUC is going after is to be added to the 1 megawatt under FITS and if FITS was doubled, 15 per cent of the Island’s peak load would be coming from renewables,” Mr. Boucher said.

However, in coming years, even more power is likely to be required in Cayman.

Late last year, CUC filed a certificate of need, which outlined that Grand Cayman would need additional generation of 18 megawatts of power in 2014, with a second increment of 18 megawatts capacity needed in either 2015 or 2016.

Those projections depend on the growth of the economy and development in Grand Cayman and the related demand for electricity.
In January and February this year, the ERA conducted an international marketing campaign to attract potential bidders to supply the two increments of “firm” generating capacity totalling 36 megawatts.

The ERA is establishing a qualified bidders list and plans to issue a request for proposals to qualified bidders by next month.

According to CUC, the proposals
for renewable energy it received by 31 October totalled more than 380
megawatts of renewable capacity, but it will only be accepting 13
megawatts “as the intermittent natures of renewable
such as wind and solar could cause grid instability and power quality
concerns”. 

CUC’s Vice President of
Transmission and Distribution Andrew Small said: “With the high cost of
fuel, CUC has been exploring large-scale alternative energy options in
an effort to reduce and stabilise costs to its consumers
and to lower emissions from fossil fuels. We have had an overwhelming
response to the August 2011 solicitation and after extensive evaluation
we will shortly begin detailed discussions with selected bidders.” 

The company said it was
evaluating the proposals on their technical and financial  merits and
the projects’ likelihood of receiving required government permits. 

One or more proposals could be selected, according to a statement from CUC to the Caymanian Compass on Tuesday afternoon. 

The power company expects to begin negotiations with selected bidders by the end of March.

cuc hq

Caribbean Utilities Company has short-listed candidates from more than 50 proposals it received to supply renewable energy to the power grid in Grand Cayman. – Photo: Jeff Brammer
0
0

11 COMMENTS

  1. Why is electicity almost four times as expensive in Grand Cayman as it is in Florida?

    The cost for CUC (from my latest bill) is 43 US cents per KWH.
    The cost for Tampa Electric is 13 US cents per KWH.

    I understand that the prices MUST be higher because of higher fuel costs, shipping to a small island, smaller generators etc.

    I could understand prices being 50-60% higher.

    But why so much?

    0

    0
  2. IF anyone even remotely believes CUC is encouraging real competition. Then I have some land to sell you on the moon.

    This is CUC’s hope factor.

    CUC is throwing everyone a hope bone, so you think someday the price of electricity will come down to a reasonable price.

    When in fact, this is merely a stalling tactic by CUC. If there is a company that can produce electricity in the quantity that CUC needs to run the island with renewable energy. At an affordable cost to CUC. Once the company is up and running, and turning a profit. CUC will simple overcharge the new company for using CUC’s electric poles and cabling. Until the new company must overcharge more than CUC for their electricity generation. Unless the new company is willing to spend MILLIONS on running new poles and lines, which must be approved by government. Which means a much larger start up cost.

    At which time, after the new company see’s the futility of trying to compete with CUC. Will sell out to CUC, Selling their current info structure of renewable energy. And it wont’ cost CUC anything for the research and development, or the implementation of this new renewable resource. CUC will simply get the entire shabang for a cut rate price. And ps. This doesn’t mean CUC will ever have to lower your current electricity bill.

    CUC is happy making the huge profit yearly off this island. There is absolutely no competition. They do not want competition. And the government cannot make them develop fair competition. Because CUC will just shut the power off, if there ever is word that a company will come to this island and provide cheaper electricity than CUC. CUC will adopt the attitude of, lets see how far you build your new competition with no electricity. They truly have this island at hostage.

    I mean, even a blind dog can see this. Who is CUC really fooling here?

    honestly.

    0

    0
  3. I mean, if anyone wants to disagree with my logic, with the disagree button.

    Then ask yourself this.

    Why doesn’t CUC allow solar panels with grid tie in, and allow you to produce as much as you want, without charging you a penalty. And pay you for your excess energy. Like they do everywhere else on the planet.

    IF THEY REALLY WANTED RENEWABLE ENERGY, as they say. Why would they be putting caps on how much you can generate before they charge YOU the excess energy you are creating.

    Huh?

    They actually will charge you money for excess energy that you create, and that energy they are charging you for generating, they are selling back to other customers. So they not only get 43cents a kilowatt hour off your energy you create, but charge you X amount making them even more money!!!!

    Pretty simple answer there, they do not WANT renewable energy, unless they control it themselves. Because if you create it, and put it back into the grid, and if CUC has to pay you for that energy. Then their profit margin would be eventually cut in half.

    Since it would be a no brainer to install enough solar power in each home to at least power 100 percent of your house during the day, and only having to pay for CUC electricity at night, and night time is the coolest, and it’s not peak electricity time.

    CUC would lose millions.

    They know it. Now you know it. So…still think they are serious about developing competition with renewable energy? hmmmm.

    I guess those who disagree, must either be working for CUC or have their heads stuck in the sand.

    0

    0
  4. CUC is a farce.
    My first question is why do companies have to go through CUC to bring alternative energy to the island? Why can’t an alternative energy companys deal directly with the ERA?
    If the Cayman government was serious about bring alternative energy to the island and helping people achieve some savings with their energy bills-this process would not have to go through CUC.
    CUC doesn’t want the people of Cayman or the Government to find out how much cheaper energy can be!
    I for one am tired of getting ripped off every month on my energy bill and paying for an outdated source of energy bills.

    0

    0
  5. Under a Consumer Owned Renewable Energy programme, known as CORE, which was revised last year, consumers sell energy generated from their solar panels or wind turbines to CUC at 37 cents a kilowatt hour and buy back power from CUC at the current retail rate.

    Why is that?

    Why not let the consumers use their OWN power in their OWN home first, then buying any shortfall from CUC?

    0

    0
  6. If you minus what they pay you, from 43 cents a kilowatt hour they charge everyone. That 6 cents a kilowatt hour is what they pay for their fuel more than likely.
    You see, the generators run, no matter if they are powering 1 house or 100 houses.
    Using the same amount of fuel.

    and the kicker is. When you generate solar power, there is no fuel consumption. But CUC will certainly add the fuel consumption to your bill, while selling that freely created energy. No matter what.

    Its’ a Win win win, for CUC.

    0

    0
  7. Please allow me to share some insights from 41 years experience in the electric utility business. I am very familiar with Cayman and CUC after spending much time in Cayman during the past 42 years.

    For many years diesel generation was less costly than gas generation based on pure fuel cost. Unfortunately Cayman is a small island located a significant distance from a land mass such as Mexico or the U.S. where natural gas and oil pipelines exist. Also since Cayman is surrounded by some of the deepest trenches in the world it makes the installation of pipelines impossible.

    These factors and Cayman’s relative small size (small size and wonderful people are the beauty of Cayman) limit the options with which Cayman can generate electricity. So let me explore some alternatives with you.

    Cayman and CUC are definitely looking toward the future in considering alternative green fuel sources. Cayman and CUC have already undertaken studies regaring the use of wind and solar generation. Wind has certain limitations beacuse of tower and blade height and interference with proposed radar and communications systems. Solar has limitations because of the space requirements.

    Either alternative will require the existing base load generation (diesel and gas) to be kept in reserve for when the alternative source is not producing power. The base load generation can be brought on-line within several hours should the alternative sources not be contributing to the grid supply. It is most likely that the diesel and gas units will be available after a severe storm (Ivan)as the solar or wind units may not be operable.

    Cayman and CUC are most likely considering several options for alternative power generation such as wind, solar, solid waste (trash) and other sources. This is a wise approach. It may not be wise to place all eggs in one basket however, such as all solar, but rather to mix the alternatives into the existing system.

    Another option to consider at this time would be alternative fuels such as oil extracted from algae such as OriginOil produces (I do NOT own stock in this company). This fuel has been tested by the US Navy, Maersk shipping lines and others with excellent results. Another option for consideration is Liquid Natural Gas (LNG) if the existing diesels can run on this fuel. LNG would require CUC to install one or more large LNG storage tanks.

    Of course I have left the best fuel option until last. The first fuel should always be conservation. There is an opportunity for energy conservation alternatives in Cayman. These include replacing old HVAC (air conditioning) systems with new high-efficiency units in both residential and commercial buildings. Limit the use of incandescent lamps and fluorescent lamps and install high quality LED fixtures. LEDs are the future – don’t retrofit with compact fluorescents when LEDs are more environmentally friendly and last 10 times longer.

    Don’t miss the opportunity to invest in upgrading existing buildings energy reductions by adding proper insulation. Consider building new homes with foam core construction such as the Thompson house at Dixie (next to the Wharf Restaurant). Super energy efficient. This type of construction would minimize the increase in fuel usage over time by CUC.

    Yes, there are many alternatives available and it is imperative that Cayman does not follow the pack blindly and dive into alternatives like solar and wind but rather look at all the opportunities available. Any company that bids on providing these alternatives will make money on the project or they will not enter into the project. Watch the contracts for ways the companies can underperform or not perform and still force payment from CUC (Caymanians).

    Caution is key to doing it right. CUC and the Cayman Government has a big task to getting it right. Here’s to hopping they do just that.

    0

    0
  8. all of these proposals have been asked to add a buyback price for the instillation so if it goes well CUC have the automatic right to purchase the facility. Some are willing to provide T D or buy the existing but it is unlikely this would be allowed. Common business sense says if you have a monopoly why allow in competition. It is the government that created the monopoly and renewed the contract, how can any company be allowed to have a guarenteed profit margin as CUC has? The answer: because the shareholders of the company are the government ministers and their cronies….cayman

    0

    0
  9. While every effort to introduce renewable energy in an island with diesel generators is a step in the right direction, I disagree with the statement that more than 13 MW solar/wind energy(out of a reported total of 380 MW)could destabilize the grid.

    In the wind industry it is accepted that, without short term energy storage, the share of wind energy can be at least 20%. But in recent years battery technology has improved rapidly and short term energy storage (to smother the peaks caused by wind gusts).

    Last week I was a speaker at the China EV Charging Infrastructure and Grid Integration, where major Electric Vehicle manufacturers, utilities and policy makers were positive about my speech how to use written off EV batteries in conjunction with (AC/DC/AC for those who understand the concept) wind turbines. This way the wind penetration can easily be upgraded to 60%.

    For solar PV, there is no way how the gradual changes could destabilize the grid. Solar should definitely get a good share of Renewable Energy as the energy usage during the day is the highest.

    The cost of Wind and Solar Energy greatly depends on the interest rate. For solar, the cost per kWh is US 0.19 at 12% interest rate, 0.155 at 8% and 0.138 at 6.5% (which is the interest rate we currently have access to).

    When only a few percent of the total capacity is renewable there is virtually no effect on the consumer price and the environment.

    With fuel cost around US 0.20

    0

    0
  10. Really RCEnergy. You are pro CUC. Obviously.

    Well tell me this. Every light in my house is the 13 watt high efficiency bulbs.

    I do not EVER use air conditioning. I use high velocity fans, that are 120 volts. And they are shut off immediately before you leave a room. I have 3 of those.

    I stopped using my electric stove and cook with propane now.

    I shut off my hot water heater to do the dishes or Laundry. It’s a small 30 gallon water heater. And I use energy efficient water nozzles for the shower.

    In my house I have two computers and a 50 inch high energy efficient LCD screen on. Not ever at the same time.

    I never have more than 3 lights on, at any one time. Those are the 13 watt bulbs I am talking about.

    And yet. my electricity is still close to 200 dollars a month.

    TELL ME how you can justify CUC pricing, after all that!

    0

    0

Comments are closed.