A decision to authorize a 5 megawatt solar farm outside of Bodden Town is “imminent,” according to Charles Farrington, managing director of the Electricity Regulatory Authority, which has been studying the proposal since Christmas.
Speaking at a Thursday night “Energy Summit 2015” in the Town Hall in George Town, Mr. Farrington joined speakers from the Caribbean Utilities Company, the Cayman Renewable Energy Association, the Department of the Environment and visiting Barbados-based alternative-energy entrepreneur David Staples to explore renewable-energy plans for Cayman.
Mr. Farrington briefed a standing-room audience of more than 100 on the progress of – and obstacles to – commercial use of solar and wind power in Grand Cayman, describing pricing complexities, and revealing sharp disagreements with CREA Chairman James Whittaker.
However, Mr. Farrington said a decision on the solar farm would be announced soon, while he and CUC Manager for Engineering Services Sacha Tibbetts spoke of the project as part of broader plans for use of renewables.
Mr. Farrington said once the decision is made, the ERA will issue a request for proposals for 5MW or perhaps more, of power. “We would like to include wind,” he said.
By mid-2017, he said, “we could have 15 percent of peak demand” supplied by renewables.”
In late December, CUC sent the ERA an outline 20-year agreement with Pittsburgh’s International Electric Power, describing terms for purchasing 5MW of power from IEP’s proposed 21-acre, $1.4 million “utility-scale” solar farm east of Bodden Town.
ERA consultants have been scrutinizing the proposed pact for six months; Mr. Tibbetts appeared to have incorporated the agreement into CUC plans.
“We want reliability and safety,” in power generation and transmission, he said, as well as considerations of “cost and the environment.”
“We probably won’t do as much as 50MW,” he said, citing an extreme example, but starting with “5MW is plausible.
“We will do 5MW of solar photovoltaic on a utility scale,” he said, apologizing for nearly four years of delay regarding the IEP project, which went to tender in 2011, seeking 13MW of renewable-energy generation.
The Pittsburgh company – and two additional bidders – won the ERA nod in 2013 after a 26-month selection process, dogged by financial questions and the ultimate withdrawal of both competitive bidders. A further year was lost in protracted negotiations for the IEP-CUC power purchase agreement.
“Future bids,” Mr. Tibbetts pledged, “will be substantially faster. This is the first time, and we want to get it right.”
Mr. Farrington included the IEP contract in an account of plans for alternative energies, which will ultimately comprise 15MW on the national electricity grid.
“We have a capacity of 15MW of renewable energy on the grid,” he said. “We have 5MW of solar, and another 4MW for CORE, and that leaves 6MW more.”
“CORE” is CUC’s “Consumer Owned Renewable Energy” program, which licenses small-scale power generation systems for individual residential and commercial properties.
The program limits any single residential system to 20 kilowatts and any single commercial installation to 100kW. It also caps at 4MW the aggregate contribution to the grid of all CORE networks.
It also requires participants to maintain connections to the national grid, but reimburses them for the power they contribute, using a complex formula balancing input and any outtakes if their own resources prove insufficient.
Mr. Farrington said CORE “was a competing mandate” in the ERA remit, which requires the authority to keep “rate structures as low as can reasonably be achieved,” yet “to oversee CORE, to permit and promote the use of renewables by consumers so as to reduce the load.”
CUC payments to CORE customers constitute a net outflow of funds from CUC, forcing electricity prices to rise, in effect creating a subsidy paid by CUC’s 27,600 consumers in Grand Cayman to approximately 65 CORE members, he said.
“Utility-scale renewable energy, however,” he said, “does not increase costs.”
Mr. Whittaker, the CREA chairman, argued that CUC and the ERA had deliberately delayed adoption of renewable energy, seeking to preserve profitability and shareholder value.
“The ERA has set an adoption rate of 13 percent of renewables by 2030,” he said. “We cannot find a country in the world with a lower rate. Cayman is now at 1 percent renewables,” he said, pointing to a 21-entry list created by CREA of 13 Caribbean nations, CARICOM, the U.S., U.K. and the European Union.
Topping the roster is Aruba, which he said has set a goal of 100 percent renewables between 2030 and 2040, and “is 60 percent of the way there already,” having invested $300 million in 2011.
Hawaii’s Kauai Island wants 50 percent renewables by 2013, he said, and has invested $100 million. It is ahead of schedule and has vowed never to invest again in fossil fuel. The island has the same 28,000 electricity consumers as Cayman.
Mr. Whittaker said recent reductions of CORE payments to its 65 participants, based on the falling price of oil and solar power, had delayed return on investment in a solar system from five years to seven years.
He said Cayman could leave CUC’s national electricity grid by installing 1.3 million solar panels on 900 acres in East End, and while he did not suggest the cost, any price would fall dramatically with rapidly improving technology.
“And we would save the $153 million dollars we spent last year on importing diesel fuel,” he said.
Finally, he argued, CUC subsidies to CORE customers amounted to two cents per person per day, while Cayman’s nascent renewable-energy industry created employment and a multiplier effect of $10 million per year.
“If we spent $1 billion on renewables,” Mr. Whittaker said, “we would earn it back in 6.3 years.”