Cayman issues historic tender for utility-scale solar project

In a pivotal step toward advancing Cayman’s clean energy transition, the Utility Regulation and Competition Office, also known as OfReg or URCO, has issued a request for proposals for what will be the country’s largest utility-scale solar and battery storage project.

The move follows a controversial decision just weeks earlier to approve 90.1 megawatts of new thermal generation, a term for fossil fuel-powered engines, prompting public outcry from Caribbean Utilities Company and renewable energy advocates, who said it runs counter to Cayman’s long-term sustainability goals.

However, URCO argued that this latest initiative clearly demonstrates its commitment to renewables.

“In light of recent commentary, I wish to clarify that URCO remains unwavering in its commitment to advancing renewable energy in the Cayman Islands,” said the regulatory body’s chairman Samuel Jackson.

“The launch of this utility-scale solar and battery storage RFP – the largest in the country’s history – stands as clear evidence of our intent and action.”

Once online, the project is expected to deliver three-and-a-half times the output of the 5 MW Bodden Town solar farm – currently the islands’ sole solar facility – and offset around 16% of Grand Cayman’s peak summer electricity demand, based on system forecasts.

It is also Cayman’s first utility-scale renewable energy initiative designed with built-in battery storage, making it “dispatchable”, or available on demand, even when the sun isn’t shining.

The RFP follows a successful pre-qualification process in which six firms were deemed eligible to bid.

A long-awaited milestone for solar in Cayman

The announcement marks a pivotal step in Cayman’s renewable energy journey. At present, only 3% of the islands’ electricity is generated from renewable sources – well short of national goals to reach 70% by 2037 and 100% by 2045.

CUC, which proposed 100 MW of solar-plus-storage in its broader 2024 generation plan, voiced strong support for the new solar RFP, highlighting that it aligns with its previous recommendations to address Grand Cayman’s increasing electricity needs.

“This is a very positive development,” a CUC spokesperson told the Compass. “The 22.5MW Dispatchable Photovoltaic power plant RFP aligns with requests CUC has previously submitted for energy generation of this nature and, more specifically, with CUC’s August 2021 capacity request to meet the growing electricity demand in Grand Cayman. … We are truly pleased to see that some of the renewable energy projects that CUC has proposed are now moving forward.”

URCO’s announcement comes as it fends off criticism over its rejection of three alternative proposals from CUC that included large-scale solar and battery storage. Those proposals were ruled non-compliant with CUC’s licence, which currently limits generation procurement to “firm” capacity, typically defined as dispatchable energy available 24/7.

CUC has maintained that the definition is not clearly outlined in law or its licence – nor is it aligned with current technology – arguing that battery-backed solar should qualify as firm power under modern standards.

“In cases like this, it is standard practice to refer to industry norms or collaboratively develop an agreed-upon definition, rather than relying on assumptions rooted in outdated technologies,” the company said.

“Globally, there is growing consensus that well-designed solar-plus-storage facilities, when operated under the oversight of a grid operator, are capable of reliably delivering firm capacity services. With this understanding, the company submitted its recommendation in the 2021 request for the 22.5 MW project – now in procurement – and for the 100 MW of solar-plus-storage capacity included in our 2024 Certificate of Need.”

URCO has asserted that any change to the definition of firm capacity must come through a formal and transparent amendment to CUC’s licence – not, as URCO’s Sonji Myles put it, through “a request to reinterpret midstream to fit a preferred outcome”.

CUC is expected to compete in the RFP process and has confirmed its ongoing interest in contributing to Cayman’s clean energy portfolio.

“Regardless of the outcome, it is clear that Grand Cayman requires additional generating capacity from 2027 onward,” the CUC spokesperson said.

“Timely and decisive actions are essential to ensure that this capacity is brought online, safeguarding the reliable energy service that the people of Grand Cayman both expect and deserve.”

Questions of fairness and market dominance

While the RFP marks a major shift toward utility-scale renewables, it has also reopened debate about market fairness, competition and long-term ownership of Cayman’s energy infrastructure.

James Whittaker, president of the Cayman Renewable Energy Association, welcomed the progress but raised concerns about what he sees as an uneven playing field, specifically pointing to CUC’s prior land purchases and past efforts to get similar proposals approved without a competitive bidding process.

“The primary concern regarding this RFP specifically remains the competitive advantages CUC has positioned themselves to have over other bidders,” Whittaker told the Compass.

“It brings into question the legal fairness of the competition given their pre-emptive land acquisitions years ahead of other bidders and prior to the RFP details being disclosed, and the fact that the RFP is already based on specifications created by CUC from an unsolicited bid they tried to have approved for this same system, without any competition.”

In a previous interview with the Compass, Sacha Tibbetts, vice president of CUC, pushed back on that argument, noting that CUC began securing land for potential solar projects as early as 2020. He described the move as a calculated business decision available to any investor familiar with the National Energy Policy or the Integrated Resource Plan, both publicly available documents that had long pointed to a growing solar market in the Cayman Islands.

Whittaker further argued that granting CUC 100MW of solar generation capacity, particularly under conditions he believes gave the company an advantage, could risk consolidating too much control over renewable energy in a single provider.

Going forward

For its part, URCO said it remains fully committed to affordability, transparency and energy independence, as well as lowering fuel-related costs for consumers.

“This initiative is a major milestone in our ongoing efforts to transition the Cayman Islands toward a more resilient and sustainable energy future,” said URCO’s Myles.

The regulator’s head of energy markets, Dwayne Tucker, echoed the sentiment, noting that collaboration between the regulator, industry stakeholders and the public is essential to a fair energy transition.