Utility regulator OfReg has launched a public consultation on a proposed 3 megawatt capacity increase for distributed energy sources, like rooftop solar panels, in Cayman’s electricity grid.
This would increase renewable energy capacity beyond the currently agreed 17 MW limit.
The amount of intermittent renewable energy on the grid is capped to manage a stable power supply.
A 20 MW battery storage project – that would increase flexibility in the management of the grid and allow for more capacity for renewables – has yet to be approved and is not expected to come online before 2022.
OfReg said the proposed 3 MW increase would “enable the continuity of the existing Customer-Owned Renewable Energy (CORE) and DER programmes, until the battery energy storage system project is activated”.
The regulator has been at odds with the local industry of rooftop solar system installers, who say that the stop-and-start nature of OfReg’s capacity allocation for distributed energy has led to constraints that left the companies in limbo for months and directly resulted in job losses.
Too little, too late
A recent reallocation of 500 kilowatt capacity was welcomed but described by as too little too late by green energy companies who said it would be used up within a week.
James Whittaker, president of the Cayman Renewable Energy Association, has long argued that the regulator is not supportive of consumer renewable energy and acts out of accord with the National Energy Policy (NEP).
A recent reduction by the regulator of the rate that electricity provider Caribbean Utilities Company has to pay under its CORE programme for the power generated by residential solar panels had further eroded the incentives for the adoption of renewable energy technology by homeowners, he has previously said.
Gregg Anderson, executive director of Energy & Utilities at OfReg, in contrast, stated in a press release that the “proposed 3MW capacity increase will continue to incentivise the growth and use of renewable and alternative energy”.
And Malike Cummings, CEO at OfReg, added that the regulator “remains committed to promoting the goals of the National Energy Policy, and recognises the important role rooftop solar plays, and will continue to play in Cayman’s energy future”.
Cummings said the capacity release “will allow consumers choice to interconnect their systems to the grid, while ensuring rates are reasonable”.
He said, “Increasing the installed renewable energy capacity contributes towards achieving the NEP target, and towards socio-economic and environmentally sustainable growth, and also aims to stimulate the renewable industry in the Cayman Islands.”
In its consultation paper, the regulator noted that there is demand for additional capacity to facilitate more growth of distributed generation systems, but OfReg said it is also mindful “of the overarching objective to ensure environmentally-friendly, secure, and sustainable supplies of competitively priced energy to all consumers”.
The paper cited a 2017 study that indicated without infrastructure investments the fuel efficiency of CUC’s diesel generators declines when the 17 MW limit of renewable energy is reached. At 29 MW this inefficiency “directly translates into increased fuel passthrough surcharges to consumers and potentially an increase in noxious emissions from the diesel engines being used to generate electricity”, the consultation paper said.
While the primary objective of the proposed 3 MW capacity increase was to provide continuity of existing residential renewable energy programmes at a fair price, OfReg said other energy policy objectives, such as emissions targets and value for money for the consumer, must also be considered.
The regulator asks, among others, for feedback on the amount of the capacity increase, rates, indirect or unintended effects and if the increase should be allocated without independent economic, environmental and technical studies.
The single-phase public consultation ends on 8 July.
OfReg expects to issue a final determination on the capacity increase before the end of the third quarter 2021.
All submissions on this consultation should be made in writing and must be received by OfReg by 5pm on 8 July.
The office will post any comments received within the stated deadline on its website by 5pm on 23 July.
Submissions may be filed as follows: By e-mail to [email protected]; by post to Utility Regulation and Competition Office, PO Box 10189, Grand Cayman KY1-1102, Cayman Islands; or, by courier to Utility Regulation and Competition Office, 3rd Floor, Alissta Towers, 85 North Sound Road, Grand Cayman, Cayman Islands.