Utility regulator OfReg has released 3 megawatts (MW) of additional distributed energy-generation capacity to two programmes that allow Caribbean Utilities Company customers to connect their small-scale solar systems or wind turbines to the electricity provider’s distribution system.
The limited capacity of the popular Consumer Owned Renewable Energy (CORE) and Distributed Energy Resources (DER) programmes has been a bone of contention for companies installing rooftop solar panels and other consumer-owned renewable energy equipment, as particularly CORE has been fully subscribed.
CUC has argued for years that a larger share of so-called distributed energy generation in the system would threaten the stability of the grid and mean higher prices for all consumers.
The new capacity of 3 MW will be made available from 1 March.
It comes after OfReg and CUC announced in November 2022 they would conduct studies about the value of solar energy and the impact of additional renewable energy on the fuel efficiency of CUC’s diesel generators.
No negative impact on fuel efficiency
While OfReg’s yet-to-be-completed value of solar study will help determine fair rates for the generation of renewable energy, the study performed by CUC was to ensure the viability of adding additional renewable energy to the grid, both in terms of system stability and the impact on fuel efficiency.
The regulator said CUC’s “findings indicate additional renewable energy within appropriate limitations will cause no negative impact to fuel efficiency, at the current price of oil”.
CUC concluded, in conjunction with OfReg, that additional renewable energy would not have a prolonged negative impact on the grid. Instead, such impact would be seasonal in nature and could be planned for and minimised by the company.
In addition to the initial 3 MW capacity release for the CORE and DER programmes, OfReg said it anticipates a further 6 MW can be allocated before CUC’s new 20 MW Battery Energy Storage System (BESS) comes online.
According to interim CEO of OfReg, Peter Gough, “OfReg will continue to develop a plan to release the remaining capacity to achieve the 29MW limit and will be announcing this plan three months from the release of the initial 3MW.”
Until now, CUC had maintained that new capacity for CORE and DER would require the installation of large-scale batteries to manage the intermittent nature of renewables in the electricity grid.
Last year, the electricity provider partnered with technology group Wärtsilä to supply two 10 MW energy-storage systems, and expected the batteries to become operational by mid-2023.
At the time, the company said the system would enable a more efficient management of energy-generating assets and allow for up to approximately 29 MW of distributed customer-generated renewable-energy resources, mainly from rooftop solar panels, without causing instability to the grid.
Richard Hew, president and chief executive of CUC, said in a press release on Friday, the company anticipates the additional capacity for the popular CORE and DER programmes will be rapidly taken up by customers and help reduce Cayman’s dependence on fossil fuels.
He said CUC conducted an incremental distributed solar study in advance of the commercial operation of BESS, which is anticipated to support further deployment of intermittent renewable resources to the grid.
“This was to ensure the benefits of releasing increased solar capacity, within grid technical limits, outweighed the operational costs and constraints of managing additional intermittent generation.”
Hew said CUC remains committed to promoting and developing renewable energy as a source of electricity generation “and we believe that programmes including but not limited to CORE and DER demonstrate that commitment”.
‘Deliberate scarcity’
James Whittaker, president of the Cayman Renewable Energy Association (CREA) and CEO of GreenTech Group, told the Compass in an email, “CREA is pleased that additional allocation has finally been released to allow Cayman’s consumers to adopt more solar energy systems”.
However, he took aim at OfReg for not ensuring competition in the energy-generation sector and for not increasing distributed energy-generation capacity sooner.
“It remains unfortunate that CUC is continually allowed to negatively impact their local energy competitors by restricting capacity and eliminating choice for Cayman’s energy consumers for months at a time with no timely action taken by OfReg, despite [its] legal and regulatory responsibility to do so.”
He said CUC and OfReg had put out press releases for years “claiming there is no grid capacity available that would not destabilise the grid, despite the findings in their own 2017 Infusion study”.
Yet, Whittaker said every time CREA or others apply pressure, forcing the regulator and CUC to act, new capacity is found. But rather than proactively allocating it, the capacity arrives months after it is needed.
“Consumers and CUCs competitors in the solar industry pay the price for this and Cayman as a whole is negatively impacted,” he said.
The GreenTech CEO said dozens of customers, with solar systems ready to be installed, have been waiting almost a year for this additional capacity, in addition to new customers, who now will also be submitting applications.
“OfReg has a well-established track record of not learning from its mistakes, with 3MWs of capacity it yet again sends the signal to the local market that there is scarcity and as such that capacity will be taken up in a few short months.”
Whittaker said the full remaining 9 MW outlined in the 2017 Infusion Study should have been released immediately to avoid the scarcity issue until the batteries come online and create even more capacity.
Solar study to determine future rates
The industry that installs consumer renewable-energy equipment has also been at odds with CUC and the regulator over the rates paid by the electricity provider to customers who generate electricity from rooftop solar panels and feed it into the grid.
OfReg said, the extension of the CORE programme will continue to be limited to smaller systems of capacity with the previously established tariff rates of $0.175 per kilowatt-hour for solar PV systems of 5kW and below, and a FIT rate of $0.15/kWh for systems between 5kW and 10kW.
The size of any individual consumer system remains restricted to the normal kilowatt peak load of the consumer, if less than 10 kW.
The DER programme provides opportunities for system sizes up to 250 kW, or the normal kilowatt peak load of the consumer, whichever is less.
Whittaker believes the findings of the regulator’s value of solar study are likely to result in consumers being paid more for their solar energy in the future.
“As we have maintained for several years now, Cayman’s consumers are being underpaid at these current rates for the value of the solar energy they produce, and we believe the value of solar study will prove that to be the case despite claims from CUC and OfReg in years past,” he said.
“CREA expects the government to support and ensure the implementation of the findings of the value of solar study in this respect.”
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