Construction has stopped on the 20,000 panel, $1.4 million solar farm on nearly 22 acres east of Bodden Town because of financial problems, delaying commissioning until at least next spring.
The utility-scale solar array was scheduled to be completed next week, with interconnection to the Caribbean Utilities Company’s national electricity grid and commissioning set to soon follow.
Workers at the site, near Pease Bay Pond on Lake Destiny Drive, were still clearing land last week, saying they still had work to do at the back of the area before finishing.
The company leading the effort, Entropy Cayman Ltd., said there were financial problems as U.S. banks balked at lending for the project, although company representatives say the 5 megawatt array will still go ahead. They predict a completion date “in early spring.”
The representative, who asked to remain anonymous because he is not authorized to speak publicly, said recent storms on the U.S. east coast, where Entropy Cayman parent Entropy Investment Management is located, had distracted attention from the Cayman effort. More importantly, he said, Entropy’s bankers had sought further paperwork.
“It has taken much longer on the construction and to get with the bank. They have required some changes to the documentation,” he said. “In any project, there are government documents and private documents, company documents, and we are working on capital structures and debt structures.
“It’s dragged on, certainly, and is a matter of paperwork,” he said.
The initial agreement with the Electricity Regulatory Authority was to complete construction by late October, but the spokesman said the company had hoped to “put out electricity and get in there” by December.
“We’re now looking at early spring,” he said. “It’s not that we don’t have the money, but we are ‘harmonizing’ the paperwork to go forward.”
Entropy, the Electricity Regulatory Authority, Caribbean Utilities Company and the Ministry of Planning staged a formal ground-breaking on May 9 at the former vegetable farm, promising “in a few months, this spot will be a sea of silicon, glass, steel and wires, and pumping clean renewable energy into every home.”
CUC President and CEO Richard Hew reacted cautiously to this week’s development, saying the company is aware of the delays, but looks forward to completion.
“CUC has substantially completed the interconnection facilities for the project, including a new 13 kilovolt line,” he said. “Entropy has indicated to CUC that while they are still working on the project, they are behind schedule.
“We will advise on a new completion date when we are in a position to do so,” Mr. Hew added.
The Electricity Regulatory Authority originally awarded the project in 2013 to Pittsburgh, Pennsylvania-based International Electric Power. A “Power Purchase Agreement” for IEP’s scheduled 5 MW of electricity was signed with CUC and submitted for ERA approval at Christmas 2014. The ERA imprimatur did not come until November 2015, however, by which time IEP had sold its interest to North Carolina’s Entropy Investment Management.
Entropy pegged the price of Cayman’s solar-generated power at 17 cents per kilowatt hour, although CUC’s complex base rate structure is likely to add 10 cents to that price, bringing consumer costs to 27 cents per kWh.
While slightly more expensive than current diesel-generated costs of 25 cents per kWh, volatile oil prices, improving solar technology and emission-free generation mitigate in favor of renewable energy in the long term.
Electricity Regulatory Authority Managing Director Charles Farrington echoed the Entropy representative: “The ERA is working with Entropy to the extent that it can to facilitate the arrangements that the banks wish to put in place as regards their prospective lending to Entropy, and, hopefully this will soon be resolved.
“Obviously, the ERA cannot do anything that could tie its hands in any way or expose it to any liability,” he said. “[The] ERA hopes this is just a bump in the road, and whilst it has delayed the start of construction we still fully expect the project to proceed and be completed during H1 2017,” the first half of the new year.
Mr. Farrington said the authority is preparing a new “request for proposals” for a second renewable energy project, and the Entropy delay is unlikely to affect it.
“This has not delayed the second RFP,” he said although progress had been slowed by work on the national energy plan and the looming transfer of Electricity Regulatory Authority powers to the new Utilities Regulation and Competition Office.
“Nevertheless,” Mr. Farrington said, “we haven’t completely dropped the ball on that and have a number of decisions to make soon which will, we anticipate, set the stage for that RFP to proceed. Knowing how the issue that Entropy has run into is resolved could be important information to inform future RFPs.
“So – as always – we will proceed somewhat cautiously, but hopefully with good results in the end.”