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CUC: Alternative Energy Program Nearing Capacity

In the initial stages of the CORE program, consumers were paid 38 cents per kilowatt hour for electricity generated from solar. In April, that payment was reduced to 30 cents for new subscribers. – PHOTO: FILE Getty Images/Hemera [1]

In the initial stages of the CORE program, consumers were paid 38 cents per kilowatt hour for electricity generated from solar. In April, that payment was reduced to 30 cents for new subscribers

The Caribbean Utilities Company has confirmed that its CORE alternative energy generation program, which allows residents and businesses to sell solar power back to the grid, is nearing capacity.

The power company acknowledged Tuesday that it may have to stop accepting new entrants into the CORE, or Consumer Owned Renewable Energy program in January.

Regulators will make a decision by Feb. 1 on whether to extend the program beyond its current 4 megawatt limit.

Charles Farrington, managing director of the Electricity Regulatory Authority, said he expected the program would be extended. But he said the price paid to customers for the power generated by their solar panels would likely come down for the second time in 12 months.

Solar energy advocates say they fear this could mean the “winding down” of the CORE program.

James Whittaker, chairman of the Cayman Renewable Energy Association, said the association was calling for the program to be expanded to a capacity of 10 MW and for no reduction in price.

He said any further weakening of the program would likely put jobs in the renewable energy sector at risk.

“We believe the expiration of the program with no continuation plan in place is yet again indicative of the complete lack of importance the Electricity Regulatory Authority and government place on renewable energy and the local industry and jobs that have been created,” said Mr. Whittaker, who is also president of renewable energy installation company GreenTech Solar.

He added, “The fact that many Caymanians that are employed in this growing industry and consumers who want to use solar energy have to put up with the constant uncertainty caused by the government and ERA is unfortunate.

“It speaks to the broader mind set and their lack of understanding as to the importance of renewable energy.”

In the initial stages of the CORE program, consumers were paid 38 cents per kilowatt hour for electricity generated from solar. That was reduced to 30 cents for new subscribers in April this year.

Mr. Farrington said this compared unfavorably, for example, with a 16 cent per KWh price agreed for a new 5 megawatt solar farm. He said those costs were passed on to consumers and the ERA had a responsibility to keep them in check. He said Cayman’s national grid currently can assimilate up to around 15 megawatts of energy from renewable sources without significant restructuring at substantial costs, although the Electricity Regulatory Authority and CUC are looking at doing what needs to be done to expand this.

The issue for the regulator is what percentage of that 15 MW should come from residential solar, when cheaper renewable sources are available.

“We are paying a big premium for CORE. That was justified at the outset but prices have come down and the options have increased,” Mr. Farrington said.

CUC said in a statement that the solar farm was evidence it was committed to promoting and developing renewable energy. But it said renewable had to be integrated carefully.

“The company will ensure that the implementation of these technologies on a large scale does not significantly increase electricity rates, cause grid instability or reduced reliability,” the CUC statement continued. The company confirmed that applicants to the CORE program in January could be put on a waiting list until the terms of any expansion to the program were agreed.

Mr. Whittaker said he was unimpressed.

“Saying they will accept applications on a future CORE allocation that ‘may or may not be approved’ at [a] rate that ‘may or may not be the same’ is not CREA’s idea of prudent regulation by the ERA or government,” he added.

He said focusing on the price difference between residential and utility solar failed to consider the wider impact on the economy.

“Cayman receives a significant net economic benefit from the local industry resulting from CORE. The millions in local economic activity and jobs created for Caymanians are not resulting from the 5 MW solar farm, which has been awarded to a foreign company.”

Mr. Farrington acknowledged that there are advantages to consumer-based solar programs and said he has invited CREA to submit its economic research to the authority as it considers the way forward for the CORE program. He said the decision would ultimately be taken by the ERA board.

Source: http://www.compasscayman.com/caycompass/2015/12/30/CUC–Alternative-energy-program-nearing-capacity/ [2]