No renewable energy firms bid for new power generation contract
A large scale solar project to meet Cayman’s electricity needs is currently unlikely because of the cost of technology to make power from renewable sources available round the clock, according to Cayman’s Electricity Regulatory Authority.
The bidding process to produce 36 megawatts of new power generation for the national grid ended on Monday, with no renewable energy firms among the five companies vying for the contract.
Whoever wins will likely build new diesel powered generators to replace old equipment, which is being “retired” by the Caribbean Utilities Company.
The situation has caused some concern among those who feel Cayman should be making a stronger commitment to green energy.
Businessman Mark Hennings, who has been promoting a plan to create a new public owned Caymanian Power Company to supply the bulk of Cayman’s power needs through solar, has taken out adverts in local media and written to every legislator in the Cayman Islands urging them not to sign any contract for diesel generated power.
The Electricity Regulatory Authority said it would have given preference to a bid from a renewable energy company for the 36 megawatt contract.
But the requirement for “firm power,” which can deliver a guaranteed amount of energy whatever the weather or time of day, effectively ruled out solar energy as an option in this case.
Charles Farrington, the regulatory body’s managing director, said the proposals had to include electricity generating equipment that could deliver a constant minimum power supply – known as the base load.
He said solar could eventually play a bigger part in Cayman’s energy future, once the technology for storing and distributing energy from that source becomes cheaper and more accessible.
Two smaller projects are currently in the works to create solar generated power for Cayman’s national grid
“Caribbean Utilities Company anticipates that by the end of 2015 it will connect 13 MW of renewable energy capacity from two developers who will finance, construct, own and operate these facilities,” a spokeswoman for the company confirmed this week.
The projects are expected to provide up to a fifth of Cayman’s daily energy needs – said to be the maximum percentage feasible without investing in technology to store solar generated power and reduce the dependence on diesel driven generators to provide backup when the sun does not shine.
“To ‘provide backup,’ we must have the means of doing so in the first place. This particular solicitation addresses this particular need,” Mr. Farrington said of the 36 MW bid.
He added, “Solar can play a bigger role in our energy future but perhaps not quite on the scale being advocated by some proponents.”
He said the issues that needed to be resolved to make large scale solar utility projects possible were complex and a subject of debate among experts in the field.
“The grid needs to supply power that is consistent, stable and reliable and that can respond in a timely manner to changing demands placed on it by consumers. Penetration of the Cayman grid by solar on the scale suggested by Mr. Hennings requires solving this requirement for an energy source that is intrinsically both intermittent and variable in a manner that can effectively reduce power costs overall.”
The regulatory authority believes that once solar can be delivered reliably and cost-effectively, renewable energy bidders will be able to hold their own in a competitive bid process – its preferred method for any expansion or replacement of power-generating equipment.
Cayman’s required power output is around 80 megawatts, with a peak of 100 megawatts. CUC currently has a generating capacity of 150 megawatts. The contract for new generation will replace existing generators and will not add to the net capacity.
There are a handful of examples around the world, including in Texas, of solar energy providing more than 100 megawatts of energy to communities.
A key difference with Cayman is that those facilities are backed up by enormous power grids that can smoothly switch between energy sources, without impacting customers, when the solar output dips below required levels, for example during periods of cloud cover.
Some supporters of solar energy, including Mr. Hennings, believe it can be used here on a larger scale to help bring electricity costs down.
Cayman residents pay a premium for electricity – more than double the cost of consumers in Miami – partially because of the cost of importing fuel for diesel generators.