Caribbean Utilities Company will soon have the generating capacity to meet the expected 2006 summer demand, said Richard Hew, the company’s president and CEO last week.
The recovery of four Hurricane Ivan-damaged Caterpillar engines totalling 16.8 megawatts of generating capacity and the addition of a new 8.4 MW gas turbine will bring CUC back up just over 120 MW of total generating capacity in April.
The new gas turbine replaces two older generators that were retired after sustaining damage during Ivan.
Before Ivan, CUC had a generating capacity of approximately 123 MW. A small 2.4 MW gas turbine damaged by Hurricane Ivan has yet to be repaired.
Last year, CUC went into the summer with about 95 MW of generating capacity fully recovered after Ivan. To help reach demand, it leased 11.4 MW of portable generators from the United States. Those temporary generators are scheduled to be returned once the new generator and repaired generators come on line.
Last year’s combined 106 MW did not offer enough reserve to allow CUC to meet peak summer demand in without a number of outages.
Peak electricity demand in 2006 is expected to reach, and perhaps slightly surpass, the pre-Hurricane Ivan demand. The week before Ivan, a demand record of 85 MW was set.
However, as CUC learned last year, that demand could increase.
‘This time last year we were predicting a 65-70 MW peak demand,’ said Mr. Hew. ‘Then we had to revise the predictions to 70-75 MW, and eventually to 75-80 MW. We were certainly surprised by the rate of recovery [from Ivan].’
In the end, the peak demand last summer occurred on 13 September – almost exactly one year after Ivan – when it reached 79 MW.
That demand was too much for the reserve margin.
As a company policy, CUC likes to operate with a reserve margin of N-3, which means its total generating capacity minus its three largest generators should meet peak demand.
However, according to its Licence Agreement, CUC’s reserve margin should fall in a range of peak demand plus 10 to 40 per cent, with its largest generator down.
With CUC’s recovery from Hurricane Ivan incomplete during 2005, it did not have sufficient reserve margin to take into account generator breakdowns and planned maintenance shut downs.
As a result of insufficient generating capacity last year, CUC also fell behind on planned maintenance, which contributed to last summer’s difficulties.
Mr. Hew said minor maintenance shutdowns take about two weeks, while major maintenance work could keep a generator out of commission for as much as six weeks.
Once the new and repaired generators come on line in April, CUC will be able to catch up on its maintenance schedule by the expected time of peak electricity demand.
Mr. Hew said he felt the underlying growth in the Cayman Islands was as strong as it was before Ivan and that peak demand this summer will probably set a record.
Still, Mr. Hew said CUC will be ready to meet that demand this year.
‘We are comfortable with the [reserve] margin this year,’ he said.
However, if CUC were to have its three largest generating units – which are 12.25 MW each – go down at one time during the summer peak, Mr. Hew admitted meeting demand could be tight.
While CUC will be prepared for the 2006 summer peak, to meet the demand in 2007 and beyond could require more generation capacity to avoid shortages.
Continuing Hurricane Ivan recovery of places like the Hyatt Regency Hotel and Ocean Club Condominiums, and the new development including phase one of the Camana Bay project and the Mandarin Oriental Hotel, will increase the demand for electricity by 2007.
‘Currently, we are looking at five to six per cent growth per year,’ Mr. Hew said. ‘And that projection is based on average demand, not peak demand.’
Looking at the summer, Mr. Hew said peak demand could increase as much as seven to eight per cent per year.
‘You can never predict it right on,’ he said. ‘If you have a couple of weeks with hotter than average temperatures, the air-conditioning load could cause a significant increase in demand.’
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