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CUC reviewing alternative power bids

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Caribbean Utilities Company has short-listed candidates from more than 50 proposals it received to supply renewable energy to the power grid in Grand Cayman. – Photo: Jeff Brammer

Caribbean Utilities Company has short-listed candidates from more than 50 proposals it received to supply renewable energy to the power grid in Grand Cayman.

According to the Electricity Regulatory Authority, CUC is preparing a report on which proposals it is recommending.

The power company received the proposals four months ago, by the submission deadline of 31 October, 2011.

Some 30 companies submitted 52 proposals in response to a CUC request for expressions of interest and preliminary proposals for the financing, construction, ownership and operation of up to 13 megawatt renewable energy generation facilities.

Currently, CUC’s 17 generating units – 15 diesel and two gasoline turbines – have a combined capacity of slightly more than 151 megawatts. The record peak load the company has experienced is 102 megawatts, in June 2010.

The renewable energy proposals submitted to CUC included wind, power and ocean technologies.

CUC’s request for expressions of interest, issued last August, stated that the power company planned to accept up to 13 megawatts of renewable energy.

“The ERA is awaiting CUC’s report on which proposal(s) they recommend to move forward with,” according to a statement released this week by the regulatory body on its website. “Investors interested in the development of large scale alternative or renewable energy development in the Cayman Islands should contact the respective licensee and the ERA.”

According to CUC’s request, the selected investor would become an independent power producer, which would enter into a power purchase agreement with CUC for the supply of electricity from the alternative energy generators.

The Electricity Regulatory Authority will review and approve that power purchase agreement, after which the selected renewable energy provider would need to secure a generating license from the regulator.

Louis Boucher, acting managing director of the Electricity Regulatory Authority, said no deadline had been set for when CUC would supply its recommendations to the regulatory body.

Less than 1 per cent of CUC’s electricity is powered by renewable energy, Mr. Boucher said.

The only renewable energy on CUC’s grid is power sold to the company by consumers who generate the electricity via solar or wind power means.

Under a Consumer Owned Renewable Energy programme, known as CORE, which was revised last year, consumers sell energy generated from their solar panels or wind turbines to CUC at 37 cents a kilowatt hour and buy back power from CUC at the current retail rate.

Mr. Boucher said nine consumers had signed up for the CORE programme’s revised feed-in tariff structure, including eight residential homes and one small commercial operator.

A one-year pilot run of the CORE programme’s feed-in tariff structure, or FITS, was completed at the end of January. Mr.

Boucher said it was being reviewed and the regulatory authority was “in discussions with CUC on how to better incentivise it”.

That revised CORE programme had a quota of 1 megawatt of energy, but only 8 per cent of that quota was taken up by the consumers who signed up for the scheme.

“If the 13 megawatts CUC is going after is to be added to the 1 megawatt under FITS and if FITS was doubled, 15 per cent of the Island’s peak load would be coming from renewables,” Mr. Boucher said.

However, in coming years, even more power is likely to be required in Cayman.

Late last year, CUC filed a certificate of need, which outlined that Grand Cayman would need additional generation of 18 megawatts of power in 2014, with a second increment of 18 megawatts capacity needed in either 2015 or 2016.

Those projections depend on the growth of the economy and development in Grand Cayman and the related demand for electricity.
In January and February this year, the ERA conducted an international marketing campaign to attract potential bidders to supply the two increments of “firm” generating capacity totalling 36 megawatts.

The ERA is establishing a qualified bidders list and plans to issue a request for proposals to qualified bidders by next month.

According to CUC, the proposals for renewable energy it received by 31 October totalled more than 380 megawatts of renewable capacity, but it will only be accepting 13 megawatts “as the intermittent natures of renewable such as wind and solar could cause grid instability and power quality concerns”.

CUC’s Vice President of Transmission and Distribution Andrew Small said: “With the high cost of fuel, CUC has been exploring large-scale alternative energy options in an effort to reduce and stabilise costs to its consumers and to lower emissions from fossil fuels. We have had an overwhelming response to the August 2011 solicitation and after extensive evaluation we will shortly begin detailed discussions with selected bidders.”

The company said it was evaluating the proposals on their technical and financial  merits and the projects’ likelihood of receiving required government permits.

One or more proposals could be selected, according to a statement from CUC to the Caymanian Compass on Tuesday afternoon.

The power company expects to begin negotiations with selected bidders by the end of March.

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