Ocean thermal company, CUC in power agreement

Project unlikely to start before mid-2017

A Baltimore-based renewable-energy company has revealed a late-May accord with the Caribbean Utilities Company to generate approximately 8 percent of Cayman’s electricity using ocean-based technology that exploits variable water temperatures to create power.

The agreement is subject to approval by the Electricity Regulatory Authority, abetted by a handful of government agencies, including the Department of the Environment, the Port Authority, the Maritime Authority of the Cayman Islands and both the Planning and Works departments.

None are under time constraints, and the project is unlikely to start before mid-2017.

In a recent interview, Abell Foundation Chief Financial Officer Eileen O’Rourke, said the technology, called ocean thermal energy conversion, had been in development locally for at least two years. On May 25, OTEC International submitted a power purchase agreement with CUC to the Electricity Regulatory Authority for approval.

Ms. O’Rourke, president of Abell’s Cayman OTEC International Ltd., said the company and CUC have also sought Electricity Regulatory Authority approval for an “interconnection agreement,” by which ocean-generated power is linked to the utility’s national grid for distribution to its 28,000 customers.

She nevertheless remained tight-lipped about proposed terms of the agreement and any costs – of investment or of electricity for consumers.

Cayman OTEC’s “proprietary innovations,” she said, were intended to reduce costs, although she declined to comment on how they compared with those for either solar or diesel generation, saying only that when incorporated into the larger CUC portfolio, OTEC would represent a savings.

A two-year decline in oil costs have meant CUC charges approximately 25 cents per kilowatt hour to consumers for diesel-generated power. Solar power will not come online until November, but kWh prices look to be pegged at approximately 27 cents.

While awaiting ERA approval of the two agreements, Cayman OTEC will complete an environmental impact assessment, performed by the Florida branch of Brisbane, Australia’s Cardno-Entrix infrastructure and environment consultants in partnership with Hawaii’s North Shore Consultants, specializing in environmental permitting and regulatory compliance.

The environmental impact assessment will be placed alongside CUC’s own “integrated resource plan,” an 18-week analysis, launched Sept. 1, by Virginia-based PACE Global, analyzing energy resources, costs, reliability and environmental impact, seeking a 30-year “roadmap” to guide local energy development.

ERA Managing Director Charles Farrington was reluctant to speculate how long a decision might take on the May 25 agreements. The authority took 10 months to approve an application for a smaller solar installation.

“The ERA has deferred a decision until it has seen the data from the … Integrated Resource Plan,” he said. “The ERA has noted that the PPA [power purchase agreement] would involve a long-term contract for approximately 10 percent of the island’s current electricity usage, and has decided it would be prudent to see how the IRP evaluates OTEC versus other technologies over the next 25-30 years as a key input to any decision.”

Department of Environment Director Gina Ebanks-Petrie said the report would go to the Environmental Assessment Board, part of the National Conservation Council.

The board, which includes representatives from the Planning Department and the ERA, will review OTEC’s study, she said, reporting to the council, which will make recommendations to Cabinet, which itself will decide about coastal-work permits.

“The ERA will also take into account the evaluation by the [Environmental Assessment Board] before making a final decision on the [power purchase agreement],” Mr. Farrington said.

Without seeing the environmental impact assessment, however, Mr. Farrington said, the ERA cannot render a verdict, but also must “satisfy itself as regards the economics.”

Ms. O’Rourke hoped to submit the environmental study in the autumn, and that regulatory processes would be completed by the first quarter next year. Assuming permits and financing are in place near the end of 2016, she said, construction could begin in the second quarter of 2017.

OTEC technology is relatively simple, and has been tested in Hawaii for years. Cayman, however, represents the world’s first commercial application. The proposal is a relatively modest 6.25 megawatt turbine on a floating platform off the coast of North Side, connected to an onshore CUC substation.

Warm sea-surface water drawn into an onboard chamber boils ammonia. The resultant gas drives an adjacent turbine, then passes into a second chamber where cool deep-seawater converts the vapor back into a liquid.

Cayman’s year-round, steady surface temperatures and near-to-shore colder depths present an ideal location for OTEC, and since the utility only pays for power delivered by the project, said Ms. O’Rourke, the opportunity to replace fossil fuels comes with little risk to consumers.