CUC: Alternative energy program nearing capacity

CUC: Alternative energy program nearing capacity

The Caribbean Utilities Company has confirmed that its CORE alternative energy generation program, which allows residents and businesses to sell solar power back to the grid, is nearing capacity. 

The power company acknowledged Tuesday that it may have to stop accepting new entrants into the CORE, or Consumer Owned Renewable Energy program in January. 

Regulators will make a decision by Feb. 1 on whether to extend the program beyond its current 4 megawatt limit. 

Charles Farrington, managing director of the Electricity Regulatory Authority, said he expected the program would be extended. But he said the price paid to customers for the power generated by their solar panels would likely come down for the second time in 12 months. 

Solar energy advocates say they fear this could mean the “winding down” of the CORE program. 

James Whittaker, chairman of the Cayman Renewable Energy Association, said the association was calling for the program to be expanded to a capacity of 10 MW and for no reduction in price. 

He said any further weakening of the program would likely put jobs in the renewable energy sector at risk. 

“We believe the expiration of the program with no continuation plan in place is yet again indicative of the complete lack of importance the Electricity Regulatory Authority and government place on renewable energy and the local industry and jobs that have been created,” said Mr. Whittaker, who is also president of renewable energy installation company GreenTech Solar. 

He added, “The fact that many Caymanians that are employed in this growing industry and consumers who want to use solar energy have to put up with the constant uncertainty caused by the government and ERA is unfortunate. 

“It speaks to the broader mind set and their lack of understanding as to the importance of renewable energy.” 

In the initial stages of the CORE program, consumers were paid 38 cents per kilowatt hour for electricity generated from solar. That was reduced to 30 cents for new subscribers in April this year. 

Mr. Farrington said this compared unfavorably, for example, with a 16 cent per KWh price agreed for a new 5 megawatt solar farm. He said those costs were passed on to consumers and the ERA had a responsibility to keep them in check. He said Cayman’s national grid currently can assimilate up to around 15 megawatts of energy from renewable sources without significant restructuring at substantial costs, although the Electricity Regulatory Authority and CUC are looking at doing what needs to be done to expand this. 

The issue for the regulator is what percentage of that 15 MW should come from residential solar, when cheaper renewable sources are available. 

“We are paying a big premium for CORE. That was justified at the outset but prices have come down and the options have increased,” Mr. Farrington said. 

CUC said in a statement that the solar farm was evidence it was committed to promoting and developing renewable energy. But it said renewable had to be integrated carefully. 

“The company will ensure that the implementation of these technologies on a large scale does not significantly increase electricity rates, cause grid instability or reduced reliability,” the CUC statement continued. The company confirmed that applicants to the CORE program in January could be put on a waiting list until the terms of any expansion to the program were agreed. 

Mr. Whittaker said he was unimpressed. 

“Saying they will accept applications on a future CORE allocation that ‘may or may not be approved’ at [a] rate that ‘may or may not be the same’ is not CREA’s idea of prudent regulation by the ERA or government,” he added. 

He said focusing on the price difference between residential and utility solar failed to consider the wider impact on the economy. 

“Cayman receives a significant net economic benefit from the local industry resulting from CORE. The millions in local economic activity and jobs created for Caymanians are not resulting from the 5 MW solar farm, which has been awarded to a foreign company.” 

Mr. Farrington acknowledged that there are advantages to consumer-based solar programs and said he has invited CREA to submit its economic research to the authority as it considers the way forward for the CORE program. He said the decision would ultimately be taken by the ERA board. 

James Whittaker, of the Cayman Renewable Energy Association, and James Whittaker, the writer of this article, are not related. 

In the initial stages of the CORE program, consumers were paid 38 cents per kilowatt hour for electricity generated from solar. In April, that payment was reduced to 30 cents for new subscribers.

In the initial stages of the CORE program, consumers were paid 38 cents per kilowatt hour for electricity generated from solar. In April, that payment was reduced to 30 cents for new subscribers. – PHOTO: FILE
Getty Images/Hemera
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8 COMMENTS

  1. This country desperately needs an Energy Policy laying out a road map which will mandate the direction we are going to take to get off fossil fuel.
    Fossil fuel is causing dire havoc around the globe today with floods in England, fires in Australia, temperatures 40 degrees above normal in the Arctic, and New Yorkers walking around in tee shirts at midnight over Christmas!
    One of the outcomes of all these anomalies will be Sea Level Rise, which we, living on an island at seven feet above sea level, cannot afford.
    Nicholas Robson D-G – Cayman Institute/Climate War Room

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  2. A couple of points to make that the ERA and CUC aren’t telling the public about this constant comparison to CORE versus the 5MW solar farm.
    Comparing distributed solar (CORE) to Utility scale (5MW solar Farm) based on "price" is completely illogical and quite frankly pointless. (But it is a good talking point to try and fool people into thinking that CORE doesn’t represent value for money as compared to the solar farms and so that’s why the ERA and CUC use the analogy constantly).
    Consider that both are necessary and good for Cayman but both serve very different purposes and have very different value propositions.
    Distributed solar (CORE) is a powerful job creator and solar adoption tool, it creates dozens of full time jobs for Caymanians directly and indirectly and pumps millions into the local economy annually. It educates consumers through the presence of solar being installed in and around their communities by their family, friends and neighbours. It is one of the fastest growing industries both locally and globally. Thus the return to the country for every dollar spent on distributed solar is significant. The solar farm does not have anywhere near the same impact in this regard, ESPECIALLY when you award the solar farm contract to a foreign company (As the ERA and CUC have done) and much of that money goes back offshore with them.
    While solar farms produce larger aggregate amounts of power it does so in a centralised way and loses efficiency when transmitting long distances (ie- Bodden Town to West Bay, etc.) Distributed solar (CORE) produces power more efficiently at the source of the energy use.
    Distributed solar efficiently uses the existing land space we have already developed (Rooftops, Trellis, Parking Lots, etc.) whereas solar farms have to cut down and clear large acres of undeveloped land, something of even more serious consideration on a small island like Cayman.
    Distributed solar helps to speed up adoption in other ways, a solar array can be installed on your home or business in 2-3 days, the 5MW solar farm they tout has taken 5 YEARS and it still isn’t online yet. Distributed solar (CORE) provides direct access to consumers to use renewable energy on their home or business, a single solar farm does not.
    While there are valid arguments as to better ways to achieve this (Net metering, standby rates, etc.) other than CORE that will get into conversations that will greatly diminish CUC profits and as such the ERA and CUC have historically preferred not to go there. Instead the one program for solar the country does have they would prefer to exercise total control over it and only allow renewables to move at the pace that CUC and the ERA would prefer.
    Countries like Germany have long proven that distributed generation can ADD to grid stability, this even more impactful today resulting from the availability of battery storage systems that are reliable and cost effective.
    The bottom line is, the ERA and CUC’s tactic of trying to convince the people of Cayman that CORE is not value for money based on the price for the 5MW solar farm is at best highly misinformed and at worst purposely misleading.
    – James Whittaker, chairman of Cayman Renewable Energy Association

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  3. These are very interesting comments from the ERA to pay close attention to:
    "The issue for the regulator is what percentage of that 15 MW should come from residential solar, when cheaper renewable sources are available. “We are paying a big premium for CORE. That was justified at the outset but prices have come down and the options have increased,” Mr. Farrington said."
    1) Are we paying a big premium for CORE? No, we aren’t. The ERA says that only because (by their own admission) they DON’T look at key metrics like jobs, economic activity, etc. that results from distributed generation (CORE) when determine what the cost of CORE is to the country. As such the ERA conducts no real cost/benefit analysis in making these statements. This is contrary to the PPM Government’s constantly stated position that robust cost/benefit analysis is critical, whether it be in regards to the port or any such project or policy.
    2) Prices have come down and options have increased? What exactly is this based on? Does the ERA have some detailed analysis of what solar costs to install in Cayman this year versus last year and have adjusted accordingly? No people, they don’t, it’s yet again a general statement based on nothing more than the fact that solar costs fall every year and has been doing so for the last 30 years. The CORE program was never started based on the "cost of solar" and it has never been historically operated (either in its rate adjustments or allocation amounts) based on the cost of solar. So why make the statement? Yet again its a useful tool to try and fool people into thinking they are making these decision based on some robust cost/benefit analysis when they are not.
    3) How did they arrive that 15MWs in total is the limit the grid can handle? Does that include battery storage technologies? If not why not? Is this based on the infusion study done by CUC which they have refused to make public to date? It’s easy to make these statements but like most other statements they are quite misleading and lack facts to back them up. California and Germany have done more modelling and empirical studies than anyone when it comes to Distributed Generation (i.e.- CORE program). Utilities in California generally agree that 15% is acceptable for distributed generation (NOT in total, that’s just for CORE/Distributed Generation). And the US is considered not be a leader in this regard, in Germany for example they have over 15,000 MW of PV (99% of it distributed generation) and there have been no significant grid issues.
    Now when you add in battery storage technologies into the mix the reality it gets even better and we can add MUCH more than 15% renewable energy to our grid, but CUC and the ERA aren’t telling the people of the Cayman Islands what are the real potential and realities of renewable energy.
    The powers that be are happy to hide behind these generalised and misleading statements based on little to no evidence, meanwhile anyone with a computer can google these things and watch other countries doing all the things the ERA, CUC and Government are telling you just aren’t possible or safe.
    – James Whittaker, chairman of Cayman Renewable Energy Association

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