OfReg to auction green energy projects

| 26/10/2021 | 27 Comments
Cayman News Service
Solar Farm in Bodden Town

(CNS): The utilities regulator has come up with a plan to enable potential energy producers to bid against each other to supply renewable energy through long-term contracts at the lowest possible price, officials have said. OfReg, which has been given responsibility for regulating the rollout of green energy, said it has been working on several initiatives to facilitate the addition of renewables into the local electricity market. Cayman’s national energy policy calls for 70% of local power to be generated from green sources in just 15 years but at present only around 2% comes from renewables, presenting a gargantuan challenge.

“Significant new investment in renewable technologies is still required in order to reach the 2037 target,” the regulator said in the documents outlining the auction idea. “The office has determined to implement a Renewable Energy Auction Scheme (REAS) as a means of promoting a viable long-term renewable energy market that is of a sufficient scale to interest market participants, and can be easily integrated into a competitive electricity generation market.”

OfReg said it has ruled out renewable technologies such as biogas, biomass and geothermal because there are not enough projects to hold successful competitive auctions and to achieve economies of scale in most areas in the Cayman Islands.

With just six responses from stakeholders, including CUC, to its first consultation and two cross-submissions during the public consultation, OfReg said that the auction concept is supported by those likely to bid.

The Renewable Energy Auction Scheme will be opened early in the first part of 2022 and managed by the regulator. It will take into account OfReg’s duty to promote appropriate, effective and fair competition, and to ensure that energy is provided at the least affordable cost to consumers, whilst simultaneously supporting environmental sustainability.

“The REAS sets out the mechanism for the procurement of utility-scale renewables through a transparent, competitive and robust process,” said OfReg CEO Malike Cummings. “The current Integrated Resource Plan projects 140 MW of utility-scale solar by the year 2030, and it is through the utilisation of tools such as the REAS we will be able to incentivise significant investments in renewable energy that will drive economic development and job creation in the Cayman Islands.”

The regulator said it is committed to a pipeline of auctions for solar and wind projects with defined capacity amounts. A minimum of 25MW of utility-scale solar renewable energy is available for allocation in 2021 with more megawatts going up for auction every couple of years in line with CUC’s advice regarding how much can be absorbed into the grid. The firm auction date together with the respective amounts to be auctioned will be announced at least sixty days before each auction.

See the full REAS here or in the CNS Library.


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Category: Business, utilities

Comments (27)

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  1. Guido Marsupio says:

    Thank you, CNS, for posting the link to the REAS document. I read it, and observe that it mentions energy STORAGE exactly once. Renewable energy is hopefully going to help the world move away from CO2 emitting power generation, but without energy storage we will still need diesel generators here for the night time hours. (Yes, there is some wind power in the REAS, and some wind blows at night, but it’s a small fraction of the total.)
    The bidders, and OfReg, should pay more attention to UTILITY SCALE STORAGE. Hint – Lithium batteries are not the solution, although the Tesla PowerWalls are not bad for residential use but they are NOT utility scale.
    See ​these web sites for more information: https://www.offshoreenergystorage.com/ and https://dspace.mit.edu/handle/1721.1/78934

  2. Anonymous says:

    OFReg can catch their big pay wages, laughing all the way to the bank .

  3. Anonymous says:

    OfReg is useless, always been and looks like it will always be useless for the people.

  4. Anonymous says:

    Hey, what could go wrong?

  5. Anonymous says:

    With OFREG at the helm this good ship Cayman is destined to sink. On another note CNS, what ever happened to the publication of the gas stations who are selling sub-standard fuel?

    CNS: It’s here. Although the Ombudsman ordered OfReg to publish the code of gas stations, they make it as difficult as possible. If they had the consumers in mind and not the gas stations, they would just put the names on the reports.

  6. Anonymous says:

    Just get a SLLIM for Grand Cayman and a VSLIMM or 2 for the Brac and Little Cayman.

    https://www.forbes.com/sites/jamesconca/2019/08/31/a-very-fast-very-safe-very-sllim-nuclear-reactor/?sh=d868c582c5cf

    • Anonymous says:

      they won’t do that. Because it only costs about 10 cents a kilowatt hour.

      government could simply tender a second energy company to install these and BAM competition.

      but those that make the rules, all have investments in CUC. Why would you want to hurt yourself

    • Anonymous says:

      Having worked in nuclear energy generation, I can tell you now that those will not make it to production in the next 20 years.

      Great idea, but the industry is extremely slow to progress, as it focuses now on safety and reliability.

      Governments and the public don’t really understand nuclear, and are scared of it, so getting anything new into the industry is almost impossible.

      • Anonymous says:

        Agreed but ITER is pushing Q=10 in their tomahawk reactor and whilst it will take some time the industry should be good again.
        There is no safer. Anything goes wrong the the reaction shuts itself down due to pure physics.

        We all put in and build one on Cuba and then cable it to the different countries.

  7. Arthur Rank says:

    You know, the extraordinary thing in all this is that CUC have been the problem in all this for decades when they should have been the solution!
    I suppose you can’t be surprised when you reward them on production capacity not performance!
    However, when renewables became feasible decades ago, and roof solar in a land of permanent sunshine was so obvious, they were and remain the obstacle when they should have been the instigator.
    So here we are, a land that will suffer from rising seas due to global warming, and still pussyfooting around the solutions. Imagine (and here I forlornly hope the government and CUC can imagine) a land swept almost constantly by wind, and half the time by sun, what might be possible. Then, add in a greatly reduced oil based generator for down time, and you have a perfect solution, but the keen eyed have spotted the problem, greatly reduced generation capacity means a reduced CUC, and when did Turkeys vote for Christmas?
    And, when did the MLA’s vote for a reduced CUC?

  8. Anonymous says:

    if they are serious about this, encourage home owners to install solar. I mean really encourage not half-assed program but really.

    I want it, but can’t seem to get a quote.

    • Anonymous says:

      Half-assed installers I’ve dealt with here cannot give me elementary info on efficiency of the panels and payback time etc. All they want to do is install and cash their cheque!

      • Anonymous says:

        Thats because CUC will not give them a straight answer on buy back costs, service costs, etc.
        If you want to go off grid, that’s simple for the installer to give you estimates.
        If you want to retain a grid tie, CUC deliberately make it difficult.

      • Anonymous says:

        Consult with GreenTech. I got a full proposal with different panel option, types, and quantity along with ROI. Their service is 10 stars.

        • Anonymous says:

          I’ve found the pricing from ProSolar and Affordable Solar was far more reasonable for the same system sizing. I would suggest to shop around.

          • Anonymous says:

            Greentech provides you with a proposal, in the form of a multi-year report. You are given multiple options, and can chose the standard panel or premium non-breakable panels. You get great service at no cost and the staff are well mannered, friendly, respectful, prompt and above all great at what they do. They are the best. You don’t get the same level of service elsewhere, sorry.

  9. Anonymous says:

    Until CUC is broken up, splitting Generation and Distribution into separate entities, Cayman will always be held to ransom.
    Take Transmission & Distribution into a public owned, or public service entity, with a legal requirement to get the best deal to consumers. Then open bidding to provide power to the new entity, with a preference to companies who can sell renewable power at good price to the grid.
    If the remaining CUC generation business cannot compete, it must change or die.

    • Anonymous says:

      For a population of 75,000 people say 40,000 homes!!!!!
      Completely nuts.

      • Anonymous says:

        I dont see what’s so hard.
        CUC Transmission & Distribution can function in isolation from Generation without much change.
        Simple shift to multiple supplier contracts for energy, at wholesale prices negotiated in advance. Then resold to the consumer at a price that covers grid management and improvement, but without the guaranteed 15% profit margin CUC currently enjoy.

        CUC Generation then no longer become an effective monopoly generator, allowing other generators into the market.

        We need to move away from the Pay for Capacity model, and pay per kWh supplied (with a base load minimum guarantee)

        This would actually free CUC to actually diversify their generation streams, as they are currently hamstrung, and cannot expand into renewable in any significant way.

      • Anonymous says:

        You do realise that this is essentially the model now occurring, right? Except that CUC own the distribution arm, and then bid to add additional generators whenever there is a need for more power. So …

        All the OP is (essentially) trying to do is reduce the guaranteed 15% CUC profit margin through targeted ‘nationalisation’ (utility distribution run under utility regulation) and increased generation competition.

        • Anonymous says:

          There is no guaranteed 15% profit margin. Details about the return mechanism and regulated targets are publicly available in the licensing documents, for anyone who cares to read them. The OP and this post are both incorrect on that count – though your post is accurate that generation is a competitive market.

    • Anonymous says:

      It must be done very carefully, otherwise we see the mess the telecom sector is in now after it was dismantled. Just drove across South Sound near Winter Haven and saw a telecom cabinet facility is shambles being held up by rope.

  10. Anonymous says:

    When are they going to close this farce down?

  11. Anonymous says:

    This looks like desperation and will never achieve set goals. Just like Vision 2008, the 2030 target will fade away, goal posts will be moved to paint OfReg in a good light.
    Prospective bidders will lose their shirts. All these projects will be pitted against the volatile price of fossil fuels. It’s plain to see CUC don’t want the competition. Since when has it not been and the duty of OfReg to promote fair and effective competition but we still have monopolies.

    So what has OfReg delivered in terms of long term savings and fairness to customers so far, insert the sound of crickets….? The cost to the public purse for four and a half years of pen twiddling, millions! This gouge of the public purse will never be recouped. We’re just paying to keep these has Civil Service has beens in cushy jobs while holding the gate protecting our do as they please utilities.

  12. Anonymous says:

    Behold, another rigged RFP by the conflicted SAGC agency that doesn’t view consumers as its clients. What could go wrong?

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