Acknowledging that consumer costs for solar energy will initially be higher than for diesel-generated electricity, Caribbean Utilities Company on Tuesday commissioned Cayman’s first commercial-scale renewable energy plant and the first non-CUC industrial-sized power source.
Located on 22 acres near Bodden Town’s Pease Bay Pond on an old vegetable farm, the 21,690-panel project will pump 5 megawatts of electricity per day through an interconnection linking the North Carolina-owned farm and the CUC-owned transmission and distribution grid.
Project manager Emil Neef threw the ceremonial switch at 10 a.m. He was joined on the dais by CUC President and CEO Richard Hew; Utility Regulation and Competition Office CEO Paul Morgan; Councilor at the Ministry of Home Affairs, Health and Culture Austin Harris; and Managing Director David March of North Carolina’s Entropy Investment Management.
Calling the development “a watershed,” Mr. Hew was nonetheless reluctant to name consumer costs for the new power initiative. Under the terms of the 18-month-old “power purchase agreement” between the company and Entropy, CUC will pay US$0.17 cents for each kilowatt hour, adding its own “base rate” costs of between 9 cents and 10 cents.
Initially, Mr. Hew said, “the consumer is going to pay a little bit more,” but cited volatile oil prices in a troubled Middle East, declining costs of solar technology and the fixed price of solar supply as ultimately creating stable, and even lower, consumer prices.
Solar, he said “is nearly down to the cost of diesel today, and is definitely close enough that the difference is worth paying.”
“The amount of energy coming from here is minuscule, so you are not really going to see it,” he added.
Local demand approximates 100 MW of electricity.
Mr. March, who acquired the project from the Pittsburgh-based International Electric Power, designated in October 2013 by Cayman’s Electricity Regulatory Authority to create the island’s first utility-scale renewable-energy scheme, thanked his local contacts working under local subsidiary Entropy Cayman Ltd, saying “this project is the epitome of partners and teamwork, designed and built by Caymanians.”
He declined to comment on construction costs for the farm, pegged by analysts at approximately $4 million, saying only that “I prefer to keep that somewhat proprietary.”
Mr. Hew said fresh contracts would be sought in the future for both wind and solar power, predicting that successive renewable projects would reduce consumer costs significantly.
“We expect the next deal to be a lot cheaper,” he said, citing “a learning process going forward.”
By 2025, CUC hoped to generate 25 percent of all Cayman’s power through renewable energy, conceding “that may seem like a long time,” but pointing out that “generating 25 percent of all energy” with solar would “require 20 projects of similar size” to Bodden Town, consuming “500 acres of land – or rooftops – and costing $250 million.”
That sum, he said, did not include costs of battery storage necessary to “maintain the stability and reliability of services” and power supplies.
While diesel fuel would continue to generate most of Cayman’s power in the foreseeable future, he said, CUC’s Consumer Owned Renewable Energy program – by which individually owned renewable energy systems fuel businesses and households – would retain an important role in expansion of renewable energy.
“Rooftop solar is not there yet,” he said, “but will have a role to play in the future.”
In a surprise announcement, Mr. Hew said the company was preparing to raise CORE’s current limit, previously capped at 6 MW, to 9 MW for both business and individuals. The program reached capacity in March, forcing CUC to suspend the scheme while awaiting a long-overdue Integrated Resource Plan, forecasting long-term trends for power consumption and supply.
“We are anticipating growth in the future of up to 9 MW,” he said.