Solar farm cuts emissions but investors lost cash

| 22/10/2018 | 46 Comments
Cayman News Service

Solar Farm in Bodden Town

(CNS): The solar array in Bodden Town, which began generating electricity from solar panels last summer, is functioning as expected and fit for purpose, with the necessary controls and systems in place, but the investors failed to make a profit on building the plant. Some 800 homes have been fuelled by the solar energy from the solar panels, reducing greenhouse gas emissions, and it has demonstrated the viability of solar technology here. However, the project has not been without its problems, according to a report by the Utility Regulation and Competition Office (OfReg).

In a “Post Implementation Review” about the Entropy 5MW Solar Photovoltaic power plant in Bodden Town, which was the first of its kind in the Cayman Islands, the utilities regulator said lessons had been learned during the project and the experience gained can inform decision-making on future local utility-scale renewable energy projects. The process has also helped to develop local expertise.

The report revealed that the final cost to Entropy was US$11.7m, which included a budget overrun of $2 million. The project was delivered six months behind schedule and energy production has been less than estimated due to unfavourable weather conditions, inverter faults and software fine-tuning during the first few months of operation.

Entropy has forecast annual operating costs of US$470,000 per annum for the first year, but both CUC and the investor said they were satisfied that the costs compare favourably with the expected benefits, given that this was the first project of its kind in Cayman.

But with unavoidable upfront legal and regulatory costs, Entropy said it was “not a successful investment”.

Cayman News Service

Solar Farm in Bodden Town

The project has delivered 9.4 GW-hours of clean electricity annually, avoided over 4.2 tons of greenhouse gas emissions annually and employed over 40 people during construction and operations. The developers spent over CI$3 million on local goods and services during construction and it has created another four full-time local jobs at the array.

The teething problems throughout the project appear to be due to a lack of experience and previous knowledge in the field. With no established procedures in place at the time CUC went looking for a solar partner, the process was developed as things went along. Gregg Anderson, Acting CEO and Executive Director for Energy at OfReg and the author of the report, said there were valuable lessons for the future.

“As technology in renewable energy develops and as it is increasingly adopted in the Cayman Islands, the lessons we learned early on will be instrumental in ensuring that consumers are getting the very best quality product and services for the very best price in the future,” he stated in a release.

In the report Andersen wrote that CUC had advised OfReg that not having a pre-defined process and historical experience with utility-scale renewable energy solar plant projects nor the required review and due diligence procedures contributed to the implementation risk.

“Delays were also incurred in the procurement of major materials, especially solar panels which had limited availability at the time, and this drove the construction timeline. There were also unknowns with the foreign bidders since many had not conducted business in the Cayman Islands,” the report stated.

The project got off to a slow start as the first two bidders selected by CUC failed to deliver in one way or another, as detailed in the report. Although the bidders had relevant experience, it was in developed markets. During the pre-construction phase there were added inefficiencies because of the requirement for documentation, processes and procedures. As a result, the OfReg report suggests amending the regulatory framework to allow multinational IPPs to build, own and operate renewable energy projects.

The report lists a number of problems with the procedures and failures in monitoring by the Electricity Regulatory Authority (ERA), the regulator at the time. But the report makes a list of ten recommendations to improve the process for future alternative and sustainable energy projects, which it said should be encouraged.

“This project will naturally lead to future renewable energy projects, which will build on the success and benefits already achieved, so it is crucial that OfReg has established tools and procedures for renewable energy solicitations that will streamline the process,” Anderson wrote in the conclusion of the report. He added that the project had proven that a utility-scale solar PV system can be successfully integrated with a licensee’s utilities transmission and distribution system.

“The industry as a whole can now use this solution knowing that it is a feasible renewable energy source,” he said. “Increasingly, this technology is competing head-to-head with conventional power sources. OfReg will therefore encourage more renewable energy plants to supply power to the grid.”

The regulator has concluded that the environmental, social, health and safety performance of the project was good and complies with the actual power quality and performance standards required by the contract with CUC. But the renewable energy production and associated benefits are less than estimated levels, though they are above minimum levels.

Overall, the project was rated as successful, financially sound, environmentally sustainable, and has met the objective to start cutting Cayman’s dependence on fossil fuels and is a very small step towards the government’s goals. According to the Cayman Islands National Energy Policy, government aims to have 70% of total electricity power generated from renewable energy in less than 20 years.

Although CNS has had access to an un-redacted copy of the report, we are unable to publish that version and have posted the redacted version sent to us by OfReg in the CNS Library.

Related article: OfReg to investigate CUC’s solar deal

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Category: Business, Energy, Science & Nature, utilities

Comments (46)

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  1. Erin Brokovich says:

    @11.01
    *You should be feeling sorry for yourself, living in the very toxic environment and pretending it is pristine.
    *Jack Kruse is a canary in a coal mine. Everything he says is backed by hard core science from all over the world, not corporate “science” you trust. You discredit yourself by making blunt statement without having idea what you are talking about. He who laughs last, laughs best, they say.
    You can keep shaving your heads, grow mustache, run for a cure or have gala events. Money can’t cure cancer. You should be running from the causes, not for a cure. Yet, almost zero response to the exposed facts (by CNS and Compass) that existing incinerators do not have filters. This is an epithome if stupidity.
    *Congratulations on recognising Erin Brokovich’ name. However you should at least google to get an idea who she is.
    *Dirty electricity! Do you even know what that is? Or if you don’t see, smell, touch or taste it, it doesn’t exist?

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    • Jotnar says:

      The National Research Council (NRC) spent more than three years reviewing more than 500 scientific studies that had been conducted over a 20-year period and found “no conclusive and consistent evidence” that electromagnetic fields harm humans. The chairman of the NRC panel, neurobiologist Dr. Charles F. Stevens, said that “Research has not shown in any convincing way that electromagnetic fields common in homes can cause health problems, and extensive laboratory tests have not shown that EMFs can damage the cell in a way that is harmful to human health.”*

  2. Erin Brokovich says:

    @fakenews

    Solar panels and EMF. (lastupdated September 5, 2016.)

    “Thebiggest EMF issue with solar panels, however, is dirty electricity, also known as DE, This form of EMF is comprised of higher frequency harmonics above 60 cycles per second (Hz), the frequency of electricity on typical house wiring.”
    “Dirty electricity in the case of solar panels is created in the process of converting low voltage DC electricity from the photovoltaic panels up to 120 Volt AC electricity.”
    http://www.createhealthyhomes.com/solar_panels.php

    Mitigation of Dirty Electricity from Solar Inverters.
    By building biologist, Michael Schwaebe
    “Abstract: This paper shows that solar inverters create dirty electricity and shows that Stetzer filters
    do not mitigate this and can make matters worse. This is illustrated by oscilloscope measurements of
    electrical system properties and ambient EMR from dirty electricity with the solar system running and
    off along with different filter configurations.”

    Don’t throw a baby with bathwater.

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    • Anonymous says:

      Many diseases of civilization, especially cancer, are related to an artifact of electricity: electromagnetic interference (EMI) or “dirty electricity.” Historical data also suggests electrification has lowered life expectancy
      EMI is biologically active and affects mitochondrial function, which we’ve now come to appreciate is at the heart of virtually all chronic disease
      Cancers appear to be frequency-specific, meaning certain frequencies cause specific cancers. Male breast cancer is a sentinel for EMI exposure.
      Dr. Sam Milham, author of “Dirty Electricity: Electrification and the Diseases of Civilization,”

  3. Anonymous says:

    @fakenews

    If Solar Panels Are So Clean, Why Do They Produce So Much Toxic Waste?
    Forbes. May 23, 2018,12:28 pm

    “The problem of solar panel disposal will explode with full force in two or three decades and wreck the environment” because it “is a huge amount of waste and they are not easy to recycle.”

    https://www.google.com/amp/s/www.forbes.com/sites/michaelshellenberger/2018/05/23/if-solar-panels-are-so-clean-why-do-they-produce-so-much-toxic-waste/amp/

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  4. Anonymous says:

    We’ve been advised that even going solar doesn’t help save money because of the CUC scam.

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  5. Anonymous says:

    Clifton Hunter.

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  6. Anonymous says:

    So how much juice did they sell? It looks like $1,598,000 in sales (at $0.17/kW per the Compass). Subtracting $478,000 in costs leaves $1,120,000 profit for a return on investment of 9.6%. not too shabby. I’m wondering why they gave out some figures but made us do the math.

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    • Jotnar says:

      Or how they can say it was not a successful investment

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      • Anonymous says:

        Maybe they expected their money back in 1/2 the time. In that case, maybe they have started an insurance company instead!

    • Anonymous says:

      I came to the same conclusion. I wish I could invest in ‘not successful investments’ that have an after tax annual return of 9.6%. Even with it being over budget. What are we missing? $11.7 million investment with $1.6 million annual revenue – $470k annual operating costs = $1.1 million annual profit on $11.7 million. Perhaps they left out the $800k annual ‘consulting fees’ paid to CUC and CIG members.

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    • Anonymous says:

      I should have said $1,120,000 cash flow. Spot them $400,000 in depreciation for $720,000 profit. Still a decent ROI in the utility world. All they have to do is get their operations up to the design capacity.

    • Mark Hennings says:

      Smoke and mirrors my friend, keep the locals in the dark

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  7. Anonymous says:

    but if CUC had not been the middle man. I am more than sure the company would have made money. Can’t leave CUC out of the energy business. Too many people with shares in CUC would lose money!

    and don’t you just love the “insert green energy phrases here” in the write up. Until CUC has honest competition, and the government allows honest competition. The ONLY person benefiting from renewable energy. Is CUC.

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    • Anonymous says:

      So how would the power produced from the “farm” get to your house without the CUC poles & wires & meters? Pray tell. Would you go by each week end to pick up your power quoto for the next week and put it in the trunk of your car?

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      • Anonymous says:

        Yes but at the cost they are charging?! No way Jose. We need another power co to balance out this monopoly.

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      • Anonymous says:

        simply put. Any government can declare those poles and wires of national interest and take them over.

        Then allow honest competition.

        And there is nothing CUC could do about this.

        How about that pray tell.

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  8. Ron Ebanks says:

    Did Solindra move to Cayman and found a different kind of hot sun for the Solar panels , or was it the same ?

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  9. Anonymous says:

    Free energy seems a bit expensive

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  10. Ron Ebanks says:

    What I am reading here that it sounds like we have learned a lot from this solar project but , will not have any other kind of electricity except for CUC and OFReg power .

    Overall the project was rated as successful financially sound , environmentally sustainable and has met Cayman objective to start cutting Cayman dependence on fossil fuels .
    Because of all the red tape and regulations and legal fees , I don’t know if anything would-be acceptable except CUC and OFReg .

    How can the government expect to reach that 70% in less than 20 years, if they don’t let the renewable electricity to start flowing , and undue some of those slipknots that is choking the start-up projects .

    I think that this is the kind of things that Mr Chudhury spoke about that is keeping the Islands from moving forward.

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  11. Anonymous says:

    Dismantle OfReg. No value for the money spent.

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  12. Erin Brokovich says:

    Solar panels on your roof?
    You might want to read this, and as always the comments are invaluable.

    “California recently passed laws about solar power conversion….. massive amounts of dirty electricity from the power grid enter your home…”

    https://m.facebook.com/drjackkruse/posts/2282622631802078

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  13. Erin Brokovich says:

    Solar panels create 300 times more toxic waste per unit of energy than do nuclear power plants.
    https://m.facebook.com/drjackkruse/posts/1820059428058403

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    • Anonymous says:

      Do us a favor and don’t post junk reports here. Jack Kruse was outed as complete fake years ago.

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      • Anonymous says:

        I gave up reading when I saw facebook. I feel sorry for the lady who signed her name to those silly comments.

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        • Anonymous says:

          1:00 Erin Brokovich is a media front person for the US ‘environmentalist’ legal fraternity. She’s an ambulance chaser.

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          • Anonymous says:

            She’s also a damn smart women who helped a county in crisis and many more since then. Please do us all a favour and import all your water from the tap in Flint, MI.

            This poster is not even remotely close to the brilliant EB.

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  14. CB4 says:

    Only in Cayman does every project run over cost and this is was always going to be the inevitable eason they could justify charging people more for something that was supposed to bring costs down.

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  15. Anonymous says:

    Reading between the lines it looks like OfReg are blaming CUC, who have never been keen on solar power, for the problems.

    Meanwhile in the UK, which is hardly the sunniest place on this planet, – http://www.eadt.co.uk/news/lakenheath-solar-farm-owned-by-forest-heath-district-council-makes-308k-for-local-services-in-year-one-1-5176237

    Another report from this area of England that was published in 2016 stated that Norfolk had over one million solar panels producing one-fifth of the county’s energy requirements.

    Why is that everything gets screwed up here.

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  16. Anonymous says:

    2 things:
    ofreg…you are a waste of space.
    entropy ..you just got a taste of a cayman scam.

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  17. Anonymous says:

    Project costs overrun by 2 million in the private sector. No way!!

    You should have given the job to the civil service and its major project office.

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