On Jan. 15, the Caribbean Utilities Company announced that government accepted its integrated resource plan, a road map for how the territory will produce its energy over the next 30 years.
The plan calls for Cayman to shift from mostly diesel power to renewable energy and natural gas over the next three decades. That timeline may seem far off, but CUC has much more immediate goals of procuring 25 percent of its power from renewable resources by 2025, and 60 percent by 2037.
Cayman’s power provider has a lot of work to do to meet those targets. Currently, CUC produces a little more than 2.5 percent of its power, or about 10 megawatts (MW), from renewable sources. About 5 MW of that comes from the solar plant in Bodden Town and the other half comes from customers selling their renewable power back into the grid.
Therefore, to reach the 25 percent threshold by 2025, CUC will have to increase its renewable-energy capacity by about 90 MW over the next six years. That would entail building 18 new solar plants if they are the same size as the one in Bodden Town, but CUC executive Sacha Tibbetts said the power company would more likely build four or five 20 MW plants, which would be a $25- to $50-million investment.
Building that many plants over the next six years is an ambitious undertaking, considering that it took some four years to commission a 5 MW plant once an initial company was chosen in 2013. Nevertheless, Tibbetts is optimistic it can be done.
“It’s doable,” said Tibbetts, the vice president of customer service and technology at CUC.
In the first solar project, there were delays caused by a prolonged bidding process, permitting processes, and pricing negotiations between CUC and then-plant owner Entropy Cayman Solar Ltd. Those issues have largely been hashed out, said Tibbetts, which means the planning process for future solar plants should be more streamlined.
There are also financial difficulties building solar plants. Last October, a report was released on the plant’s first year of operations, and in it Entropy declared that the project was not a successful investment.
OfReg stated in its report that the project – which includes 21,690 solar panels on a 22-acre Bodden Town site – was built at a cost of US$9.7 million, with a budget overrun of US$2 million.
Entropy forecast annual operating costs of US$470,000 per year for the first 12 months of the plant, the report states.
Overall, “from a financial viewpoint, Entropy has advised that it was not a successful investment”, the report states.
The report also stated that the project was fully commissioned about six months behind schedule.
“The time objectives were not met due to defaults by both parties – [Caribbean Utilities Company] underestimated the construction and logistics costs of the interconnection facility which resulted in budget overruns and Entropy did not meet the commercial delivery date due to financing and equipment delivery delays,” the report states. “The parties have subsequently agreed on a solution for liquidated damages and costs offsets.”
Entropy has subsequently sold the solar plant to BMR Energy, a company owned by Sir Richard Branson’s Virgin Group.
Tibbetts said the difficulties the first solar plant experienced were specific to that project, and are not indicative of how a larger solar-power market will perform in Cayman.
“We’re seeing costs for current projects that are substantially less of what was at the Entropy plant,” he said, adding that CUC is looking at building its own solar plants rather than conducting such projects through third parties.
Tibbetts said the territory’s utilities regulator, the Utility Regulation and Competition Office (OfReg), is working on drafting a regulatory process for solar companies that want to launch in Cayman. That regulatory process should hopefully be released later this year, said Tibbetts, and soon thereafter CUC and the regulator can enter serious discussions with renewable resource companies.
But CUC will not be relying exclusively on solar to meet its targets for renewable energy production. The power provider’s integrated resource plan calls for the company to produce its power from a diverse basket of sources that includes solar, wind, batteries, and waste-to-energy – as well as natural gas, which is not renewable but will still reduce the territory’s carbon emissions.
Depending on the project’s timeline, the new waste management facilities may help CUC achieve its renewable energy targets, said Tibbetts. The new facilities are expected to reduce the approximately 90,000 tonnes of waste currently going into landfill every year by as much as 95 percent. Instead, much of the trash will be fed into a 7 MW waste-to-energy plant and sold as electricity to CUC.
Dart Enterprises was chosen as government’s preferred bidder in October 2017 to carry out this project, but details are still being negotiated.
Another potential source of renewable energy for Cayman is wind turbines. CUC wants to produce some 40 MW of its renewable energy from wind turbines 30 years from now, but the plans to fulfil this goal are still in their infancy.
Tibbetts said there are two main roadblocks to building wind turbines on Cayman: The first is the 250-feet height restriction on anything built within 10 miles of the airport, and the second is a restriction on building anything high enough that would interfere with Cayman’s Doppler radar station.
The turbines would be some 300 feet high, but government is exploring technical ways to make sure they do not interfere with Doppler radar, said Tibbetts.
If these initial roadblocks are cleared, Tibbetts said the next challenge will be building the turbines in an area that will not draw public ire.
“There’s the issue of ‘Not in my backyard,’” he said, though “some people actually like how they look.”
One potential source of renewable energy for Cayman is the planned ocean thermal energy conversion plant that would be located off the shore of North Side.
The renewable energy company Cayman OTI has planned this floating power plant, but CUC’s integrated resource plan did not recommend it because it is not yet commercially proven.
The report echoed statements recently made by Utility Regulation and Competition Office (OfReg) Acting CEO Gregg Anderson, who said in Finance Committee in November that a proposed floating power plant in North Side would not produce energy at a reasonable price.
He said at the time that this type of power production, ocean thermal energy conversion, has not been successfully deployed on a commercial scale.
However, the company that is planning the floating power plant, Cayman OTI, has disputed the characterisation that its plans are not financially feasible.
“Cayman OTI has offered to provide further reductions through substantially lower capacity charges as diesel generating units are retired,” the company said in December.
Tibbetts said he agrees with the report that ocean-thermal energy is not currently financially feasible, but that CUC has not ruled out this energy source altogether.
“It’s very interesting on paper and we’re keen to see someone get it across the line at a commercial scale,” he said, adding, “It really is a fantastic opportunity if someone can do it at a reasonable price.”