The world is facing catastrophic effects from climate change by the end of this century unless dramatic changes are introduced to limit global warming to 1.5 degrees Celsius. The International Panel on Climate Change (IPCC) – the world’s leading climate scientists – have said that to achieve that target, greenhouse gas emissions must be cut in half by 2030 and reach net zero emissions by 2050. It is a race against time.
Cayman’s National Energy Policy, approved by cabinet in February 2017, set a target of 70% of our energy coming from renewables by 2037. Premier Alden McLaughlin said, “It is my hope that everyone will embrace this new policy so that we in the Cayman Islands can do our part to mitigate the impacts of climate change.”
The clock is ticking, but over two years later there is little sign of progress and industry insiders believe the problem lies at the door of OfReg, the regulator for the local energy sector.
The National Energy Policy will use a number of options for clean energy, including utility scale solar (solar farms) and distributed energy (rooftop and parking lot solar). Cayman has local companies with the technical expertise and resources to rapidly increase the energy derived from distributed solar. The Cayman Renewable Energy Association (CREA) has submitted several constructive initiatives to OfReg which would help meet the targets for distributed energy. More than a year after these proposals were submitted to OfReg, they have yet to act on them. Here are four examples.
CUC have an off-peak (Demand Rate) programme to encourage large commercial customers to use solar for self-consumption and/or install batteries to store power during the night at a much lower rate, thereby shifting their electricity demand. This is a good idea but the trouble is that CUC requires a two-year ratchet qualifying period, which is about a year longer than industry standard. Uptake has been slow as, naturally, companies are less willing to make a significant investment in solar or batteries with no return for two years. CREA wants OfReg to reduce this ratchet period to 6‑12 months in line with other jurisdictions to accelerate uptake.
The CUC CORE programme allows consumers to install rooftop solar and sell their power back to CUC at a premium. However, the programme has been a stop-start affair, with CUC releasing a fixed capacity each time at ever reducing premiums, but with no indication what future rates or allocations will be. CREA accepts that the CORE subsidy should be eliminated over time as costs continue to decline, but have proposed a five-year structure that would eliminate the subsidy, provide assurance of allocation, and give local firms the certainty they need to invest in staff and equipment which will lower the costs for consumers.
Another CREA initiative is for CUC to have an auction for the supply of 10 MW of renewable energy each year for distributed generation, using existing developed spaces such as rooftops and parking lots. There is at least one company that would bid to supply electricity to CUC as cheaply as 10 cents per kilowatt hour (kWh) under such a scheme. This compares to the rate of up to 30 cents per kWh of solar power that CUC pays CORE users and 21 cents that it pays to government entities.
The government have recently announced that electric vehicles (EVs) can be imported duty-free (up to $30,000). This is to be welcomed, but many potential buyers remain concerned about running out of battery power. There are currently 19 charging stations but many of these, like gas stations, are not convenient for a long stop to recharge. CREA have proposed a programme which would promote an island-wide EV charging network in places where cars are parked all day or for long periods, like offices, supermarkets and car parks. Instead of getting the power from CUC, as charging stations do now, it would come from PV solar arrays. Excess energy would be sold back to CUC at the costs of diesel fuel with no subsidy from consumers.
Cayman must transition to cleaner, cheaper energy more quickly to fulfil the goals of the National Energy Policy. OfReg is one of the key decision makers required for this to happen. Many MLAs have rightly questioned whether OfReg is giving value for money for its $5 million expenditure. What is urgently needed is the implementation of the long-awaited government appointment of a renewable energy czar to cut through bureaucracy and make things happen at a much faster pace.
Graham Morse, author and ocean sailor, built his own eco-friendly house in Cayman in 2011, is an advocate for the environment and renewable energy, and is a member of the Cayman Renewable Energy Association.