Policy proposes tariff for renewable energy

A national energy policy that proposes a new tariff to help support public utilities’ efforts to bring renewable energy to the Cayman Islands is just one of a number of major proposals considered in the long-awaited document released Friday by Premier Juliana O’Connor-Connolly.  

The overview not only includes consideration of both streamlining traditional energy sources and changing laws and dutiable amounts to promote wind and solar energy, but it also looks at other areas like water, wastewater and land use, as well as transportation options and public education.  

The policy sets out long-term goals for energy use by the year 2030. Those include:  

A 21 per cent overall savings in energy use from all sectors, encompassing a 27 per cent savings in electricity use, a 20 per cent reduction in water use and a 16.5 per cent reduction in transportation fuel use.  

A goal that 13.5 per cent of all electricity sold to consumers be generated from renewable energy sources.  

A goal of a 19 per cent reduction in carbon dioxide emissions.  

The policy, which has been under review for two successive government administrations, promotes public utility usage of renewable energy sources, but suggests that electric utilities “securely recover through tariffs the cost of investing in firm, as well as non-firm, renewable energy”.  

“The tariff component could be described as a ‘sustainable energy factor’, and would allow utilities to recover their direct investment in all sustainable energy products … plus an allowable return on that investment,” the national energy policy states.  

Other energy initiatives suggest the revision of airport and Doppler radar exclusion zone requirements to allow for “utility scale” wind energy in Grand Cayman; the reduction or complete removal of duties charged on the importation of renewable energy systems for consumers and related equipment; a change in rates charged by utilities that reflect that actual cost of providing the service [the cost of servicing larger customers is usually lower than servicing smaller 
customers]; changing the islands’ building codes to mandate energy efficiency for lighting, doors, roofs, insulation and the like – even including landscaping.  

Renewable energy funding to create “green financial incentives” could include favourable loan terms for items like solar panels or windmills, as well as government-guaranteed loans, grants or rebates for such items.  

The government policy suggests that an “energy audit system” could be used to check efficiency of energy on for sale and leased properties.  

It also suggests that utility companies be “encouraged to assess whether the benefits of undergrounding lines would exceed costs” and seeks to allow utilities some mechanism with which to recover those costs.  

With regard to water usage, the government policy encourages “rainwater harvesting” to supplement piped water, even to propose that underground rainwater tanks be included in new developments.  

The government also seeks to encourage fresh groundwater use from wells, but also seeking to limit extraction rates for sustainability purposes.  



A major section within the national energy policy deals with transportation costs.  

The policy generally seeks to encourage bike riding, walking and public transportation as a way to decrease traffic congestion and lower fossil fuel usage. It also suggests that companies implement more flexible or staggered working hours to clear some of the rush hour traffic from the roads.  

Other measures proposed in the policy seek to “increase road supply”, according to the report.  

“[These include] new roads and additional lanes and one-way traffic on selected routes and at selected times,” the policy states. “Adopt measures to decrease road demand, including congestion pricing, restrictions to circulation and staggering selected public services [such as trash collection] to off-peak times.”  

Congestion pricing is usually defined as higher peak-time prices for public transport services like buses, metrorail, or traffic tolls. In urban centres, this usually means cordoning off a city centre and charging motorists for passing the cordon, toll roads, tolled traffic areas or charges for access to a specific lane of a road.  

The energy policy also proposes that certain areas be made “pedestrian only” and that “Park-n-Ride” or other shuttle services outside those areas be used at satellite parking lots to get people to and 
from their destinations.  

No nukes 

According to the plan released Friday, it will be the government’s policy to “indefinitely postpone” any assessment of the viability of nuclear energy for power generation.  

The economies of small modular nuclear reactors are considered to be “unfavourable”, according to the policy, and problems of regulatory competence, accident liability and handling of spent fuel would all be problematic.  

“Clause 23(4) … of the Electricity Regulatory Authority Law, which states that the primary source of energy shall in no circumstance include the use of nuclear fission for the generation of electricity, shall remain unchanged,” the 
policy states.  

However, the plan does seek to assess whether the use of what’s known as heavy fuel oil, in place of diesel for power generation, should be considered.  

Heavy fuel oil is a residual oil derived from distillation or the cracking system of natural gas processing. It is generally used for marine diesel engines aboard 
large vessels. 


Ms O’Connor-Connolly


For the first time in its 46-year history in Grand Cayman, Caribbean Utilities Company will face competition in the electricity generation business. – Photo: File


  1. Finally I hear drum beats, be it distant, to the call of sustainability. To hear the country leaders drive to adopt objective with milestones to lessen our dependency on fossil fuel is commendable.

    Nothing in the way of regulations not withstanding safety and quality of life should inhibit the development and or deployment of renewable energy. Government should do everything within its power to regulate through licensing and regulations, not just concessions, the adoption of green energy use and the reduction of the unsustainable use of fossil fuel. Election chatter or a national energy policy in the making. We no longer have the time to say we will wait and see, get it done please.

  2. Giving the fox the keys to the chicken house is a bad idea. Provide a subsidy for citizens and independent businesses to create their own renewable energy. Allow them to sell it to the monopoly at a net metering rate. Giving the monopoly another fee (tariff) continues to perpetuate government cronyism. Something we have suffered from way too much lately.

  3. The future of fuel powered electricity generation is small gas turbine engines. Diesel powered generators are as archaic as dinosaurs. Gas turbines use a fraction of the amount of fuel to develop the same amount of power of a diesel engine and are far, far cleaner.

  4. We need net-metering that will encourage individuals and businesses to implement renewable energy systems not another subsidy to the present monopoly. Their profits are already killing us. Stop the foolishness.

  5. This is bad!

    Whilst everybody is protesting the West Bay Road closure, CUC is about increasing everybody’s light bill!

    It is US against the THEM, the small few with the dollars and government allegiance to back them.

  6. How could any country base it’s objectives for reduced fossil fuel use on the assumption that the population will start putting in their own solar cells or windmills. With government strapped for cash and their borrowing restricted, there can be no subsidy to encourage the average Caymanian to lay out the substantial amount of cash to purchase and retrofit their homes to accommodate green energy.

    Net metering for the lucky few who can afford the investment should add to the positive end of the policy, but could in no way replace it. Look further people, we should be asking that fifty percent of our electrical power be generated by a green energy source as soon as possible. A national disaster preparedness plan should be beyond that for a hurricane, or hurricanes.

  7. @Ilovecayman – The renewable energy available in Cayman cannot provide reliable power and so can never be 100% of all power sold. It is also not cheap to provide renewable energy so that when the price of oil reaches certain levels it could be more expensive to produce electricity from renewable sources than fossil fuels.

    To put this in perspective, initially the target of the EU was 15% of electricity from renewable sources but this has been increased to 34%.

  8. @ Speaker, the renewable energy equipment would cost 50% less if Cayman would apply the CE electrical standards instead of the UL. By using a UL or other US standards, Automatically, the US or Canada receive 25 to 30% of the sales of any products fabricated all over the world. We should really use the CE standard just like Britain.

  9. A policy is a statement of intent to assist those in position to make decisions for the future. Its purpose is to set high goals and help guide the actions of those that are most likely to achieve those goals as a desired outcome. It should not have arbitrary limits placed to prohibit achievement of the goals which the above discussed policy now does. We had a large number of Caymanian volunteers spend thousands of hours creating the sections of the energy policy described in this article.

    Unfortunately, what Cabinet was given by the Energy Policy Board does not resemble what these volunteers worked on selflessly for over 18 months. The energy policy, presented to our Cabinet was drafted by Castalia Strategic Partners, (a firm that supports and protects the interests of utility companies) and does not help the people of the Cayman Islands. They were contracted to take the wording from the energy policy sub-committees’ and put it into a draft form by which the Cabinet could enact it. Instead they rewrote the energy component of the policy and completely ignored what the sub-committee had written. This revised document quotes chapter and verse about the existing license agreements for both Generation and Transmission Distribution – neither of which should be included in a national policy.

    Our National Energy Policy should not be concerned about the revenues of a publicly traded, foreign owned company whose interests are widely apart from the citizens of Cayman. If this policy document is enacted as written by Castalia, it will be a travesty protecting the profits of the utilities and limiting the growth of renewable energy here. It will set Cayman back again due to the inability of the electorate to understand what they’re reading or worse yet to be a party to it. I pray that they listen for once and don’t make the same type of mistakes that have hindered our country in the past.

    And finally, for those uninformed who always feel they must post something to prove it, let me say that renewable energy can and does provide reliable and firm energy for locations with populations much larger than Cayman and for small personal homes all over the world including my own; it’s affordable for virtually all homeowners and businesses; and those who have it don’t experience power outages when the grid goes down.

  10. @JimKnapp – Renewable sources of energy in Cayman presently comprise primarily solar and wind energy. Wind is intermittent, particularly here in Cayman. Solar is also intermittent. The output for both is highly variable. Another difficulty with these systems is the limited ability to store the energy generated. There is no country in the world where wind and solar provide 100% of the electricity sold. Renewables may provide 100% where the source is hydro or geothermal, for example.

  11. @ Jim Knapp – The World Nuclear Association states: Obviously sun, wind, tides and waves cannot be controlled to provide directly either continuous base-load power, or peak-load power when it is needed,… In practical terms non-hydro renewables are therefore able to supply up to some 15-20% of the capacity of an electricity grid, though they cannot directly be applied as economic substitutes for most coal or nuclear power, however significant they become in particular areas with favourable conditions. If the fundamental opportunity of these renewables is their abundance and relatively widespread occurrence, the fundamental challenge, especially for electricity supply, is applying them to meet demand given their variable and diffuse nature. This means either that there must be reliable duplicate sources of electricity beyond the normal system reserve, or some means of electricity storage. Relatively few places have scope for pumped storage dams close to where the power is needed, and overall efficiency is less than 80%. Means of storing large amounts of electricity as such in giant batteries or by other means have not been developed.

    December 10, 2007 Patrick Moore, co-chair of the Clean Safe Energy Coalition wrote: Greenpeace is deliberately misleading the public into thinking that wind and solar energy, both of which are inherently intermittent and unreliable, can replace baseload power that is continuous and reliable. Only three technologies can produce large amounts of baseload power: fossil fuels, hydroelectric plants and nuclear power. Given that we want to reduce fossil fuels and that potential hydroelectric sites are becoming scarce, nuclear power is the main option… Over the past 10 years, Germany and Denmark have poured billions of taxpayers’ euros into wind and solar energy in the vain hope that this would allow them to shut down fossil fuel and nuclear plants. They have not succeeded because every solar panel and every wind turbine must be backed up by reliable power when the sun isn’t shining and the wind isn’t blowing.


  12. it will be the government’s policy to indefinitely postpone any assessment of the viability of nuclear energy for power generation

    This statement reeks of the attitude I have made up my mind. Please don’t confuse me with the facts.

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