Puerto Rico surges ahead with sustainable energy

Forward thinking neighbours in the northern Caribbean are forging ahead with innovative plans to cut both the cost of their energy and their reliance on oil as the main provider of that energy. The Journal looks at how they are implementing their plans for the good of their populations and why Cayman’s plans in this regard have taken so long to move forward.

“The Electricity Regulatory Authority is committed to protecting the rights of electricity consumers in the Cayman Islands, to ensure that they receive dependable power supply at the lowest possible cost.

The ERA is committed to the development of electricity from renewable resources to reduce the Cayman Islands dependence on diesel fuel.”

Part of the Electricity Regulatory Authority’s mission statement

Kenneth McClintock, secretary of state of Puerto Rico spoke in Cayman recently at the Northern Caribbean Conference on Economic Cooperation and laid out the importance of Caribbean nations focusing closely on the issue of energy, as it was “fundamental in achieving sustainable economic growth,” he said.

Most Caribbean countries relied upon imported diesel and heavy fuel oil, he furthered, which resulted in a significant drain on foreign reserves that affected economic and social development.

McClintock stated that electricity demands were set to double in the next 20 years, posing an even greater challenge for Caribbean countries, thus it was crucial for Caribbean countries to begin looking at ways to cut costs immediately.

He noted that Cayman lagged far behind in the quest to provide sustainable energy for its population.

“Ironically as I’ve driven round the Island and spoken to its people I realise that as in Puerto Rico you’re blessed by a high dosage of sunlight and quite a bit of wind, yet we have almost nothing in place to harness all that solar and wind power that we are letting go to waste,” he said.

Puerto Rico leaps ahead

Puerto Rico recently set about putting plans in place that will eventually radically change the way energy is produced and delivered. McClintock detailed the proposal by the island’s Governor Fortuño, at the 2009 Miami Clean Energy Conference, for the interconnection of power grids in the Caribbean Basin.

An impressive plan, McClintock said that it was not without its problems, in particular with regard to energy isolation, that most Caribbean countries have small electrical power systems and markets with insufficient reserves, as well as infrastructure having no links to other grids. Never-the-less McClintock said Puerto Rico is forging ahead with its plans because Caribbean countries have the highest electricity rates in the world because of their dependence on imported fuel.

Some countries, he said, have sought to diversify and seek energy from renewable resources but this is difficult because of economies of scale, which can’t be achieved in the Caribbean without market integration. This is made difficult by geography.

However, technology does exist to connect grids via submarine cables but, he warned, the cost needs to be matched by the size of the market.

“Enter Puerto Rico – the largest consumer of electricity in the region. Things are moving forward. Governor Fortuño and President Fernández agreed to form a joint working group with the Dominican Republic discussing interconnectivity at the highest levels,” he confirmed. “The first step is a feasibility study for the World Bank.”

In addition, Puerto Rico and the US Virgin Islands are close to signing a letter of intent supported by the United States to make interconnectivity possible. McClintock advised that SIEMENS has been invited to conduct a viability study. If interconnectivity happens between Puerto Rico and the USVI, it is also anticipated that Puerto Rico will produce enough electricity to sell off some to the British Virgin Islands and also pass on free electricity to Haiti. In the future, McClintock says the pipeline would extend even further.

Through multilateral cooperation, the Puerto Ricans hope to achieve a common Caribbean energy market, eventually connecting the northern rim of the Caribbean basin encompassing Florida, Cuba, Jamaica, Haiti, the USVI and Nevis as well.

Sustainable energy

With regard to encouraging sustainable energy usage in Puerto Rico, McClintock said he was the author of the net metering law in Puerto Rico.

Implementing net metering – whereby the cost of selling energy generated by solar power back to the electricity provider is the same as/very near to the cost to the consumer if they need to buy it back – is, according to McClintock a straight forward process.

“The power companies don’t like it because they don’t want to move away from fossil fuels,” he stated. “There will be no way to convince them – you just have to impose it on them by legislation.

“You need to find a way to get government to give subsidies to support sustainable energy – even something as simple as encouraging people to install a solar water heater. In Puerto Rico we get payback in about three years from installing solar water heaters. I believe that your electricity costs are even higher so your payback time would be even quicker. Anyone should be able to get one and apply for a loan if need be to finance the purchase. In Puerto Rico we give tax deductions on the purchase of equipment for those who implement solar or wind power. We encourage people to get off the grid. We make it easy to do so,” he confirmed.

Frustrations in Cayman

Graham Morse is a homeowner in Cayman. He sets out his displeasure with the slow progress Cayman has made so far.

“My wife and I are very frustrated. We are building a new home in Cayman and would like to incorporate the generation of PV solar energy into the design of the house. It is impossible to do so until we know whether CUC will provide a cost effective incentive to do this. A PV solar system can lower energy bills and be a sound long-term investment for any home, provided that the right incentive is in place.”

Morse says there is strong support for environmental issues among sections of the Cayman community and it is frustrating that the ERA and CUC are prevaricating in providing incentives for domestic PV solar generation.

Morse believes that the trial consumer-owned renewable energy programme introduced by CUC has been a total failure, a fact which has been acknowledged by CUC.

He confirms: “On August 17, 2009, Andrew Small, CUC, wrote a press release to the editor of the Cayman Compass, saying that “… in keeping with the intent of the license, CUC has made more than one proposal to the ERA, which provides greater incentive to the CORE customers than the present CORE rate and would likely attract more CORE participants if implemented. These proposals could achieve results similar to net metering. It is our understanding that the ERA is awaiting a policy direction from the government before it can approve any such rates or incentives and we trust that this will occur in the not too distant future.”

Morse says that he was told many times last year that an incentive plan would be introduced but nothing has happened so far.

“There have been various grapevine stories that there’s something just around the corner, but no official information has been forthcoming…Isn’t it time they stopped talking the talk and walked the walk?” he says.

Louis Boucher, deputy managing director of the ERA confirms that discussions took place last month between the government, the ERA and CUC and that a plan for an incentive programme that would benefit all parties concerned has been reached. He says that the proposal has been passed to Cabinet for its approval.

“It is a similar incentive programme to that implemented in the UK, the US and Canada,” he confirms.

Home owner Jim Knapp is waiting for the new incentive plan with anticipation. He says: “Our only concern is that they will come out this month with another confusing, impossible to understand, programme which will not address our concerns. This island needs net metering and nothing short will be sufficient.”

Boucher responds: “Our incentive plan will be better than net metering.”