OfReg rejects solar storage answer to firm power need
(CNS): In another blow for the future of green energy in Cayman, due to CUC’s licensing deal and its obligations to supply ‘firm’ rather than renewable energy, OfReg’s position on the power provider’s Certificate of Need will mean that it will be generating more, not less, electricity through fossil fuels over the coming years. With CUC and the regulator seemingly locked in disagreement over interpretation, Cayman’s incredibly slow efforts to switch to renewables do not appear to be speeding up any time soon.
In a press release, OfReg said that CUC’s submission for a Certificate of Need to generate more power to meet Grand Cayman’s growing consumption was very late and did not fully meet the technical requirements of such an application. Nevertheless, the regulator chose to accept the application made last June for 90MW of ‘firm’ power generation, and evaluated the suggestions CUC made about how this much-needed new power capacity for Grand Cayman will be generated.
Although the government’s National Energy Policy calls for the Cayman Islands to transition to 100% renewables by 2045, as CUC retires many of its old generators in the next few years and seeks to increase its generating capacity for the future, an opportunity to make a significant chunk of it come from green resources has been lost.
The regulator has said the terms of the CUC licence require this to be firm — in other words, from thermal generation, which effectively means fossil fuels. Acting OfReg CEO Sonji Myles said this wasn’t a rejection of renewables but a defence of process and fairness. “We are already advancing a 22.5 MW renewable dispatchable solar-plus-storage project through a competitive process, and more will follow later this year,” he said.
But because OfReg has rejected the idea that solar energy combined with CUC’s new battery storage could count as ‘firm’ generation, the chance of Cayman reaching even its interim target of 30% of power coming from renewables by 2030 is diminished even further. Ofreg has argued that CUC, in its submissions to the regulator for this CON, has made the distinction between firm and hybrid generation clear.
“If CUC believes it is time to redefine what qualifies as Firm capacity, that requires a formal, transparent process to amend the licence — not a request to reinterpret it midstream to fit a preferred outcome,” Myles stated, putting the technical elements of the licence ahead of the country’s sustainable energy future.
The preferred option highlighted in CUC’s Certificate of Need called for 100MW of utility-scale solar plus battery storage and 36MW of thermal generation.
“This option would ensure the delivery of reliable and safe service, position renewable energy as the primary source on the grid, and offer significant cost savings to customers,” CUC said. “OfReg has chosen to decline this proposal in favor of the business-as-usual scenario of 90MW of thermal generation. This was the only scenario that did not progress NEP objectives and represents new thermal generation equivalent to over half of CUC’s current North Sound plant generating capacity. As a result, this perpetuates reliance on fossil fuels as the primary generation source for Grand Cayman’s energy future.”
The company also noted that the option OfReg selected carries one of the highest energy costs for consumers.
Meanwhile, in a social media post, James Whittaker, the president of the renewable energy advocacy group CREA, said that this was “an unfortunate indictment on CUC and to some extent OfReg” to let it come to this point and at this late juncture.
“While it’s mostly a replacement of already existing generation… it shouldn’t have come to this, but for the action, and inaction of both entities to historically keep renewable generation down which would have helped kept load growth on the grid down, lowered costs, increased resilience,” he said as he accused OfReg of historic ineffective regulation of CUC.
Whittaker argued that if the regulator had properly regulated and held CUC to account to adhere to their licence and further liberalise renewables over the last decade, the problem of the tight timeline would not have arisen. However, despite his criticisms of the regulator, he believes the main issue, as noted by OfReg, is “the failure of CUC in previous years to submit a CON in accordance with its License”.
It’s not clear why CUC did not submit its CON sooner, and CNS has reached out to the power firm for an explanation over that allegation.
Regardless, the disagreement between CUC and the regulator lies with the interpretation of the conditions of the licence as well as the definition of ‘firm’ generating capacity and whether or not solar combined with storage can be interpreted as ‘firm’ or not.
See all of the relevant documents in the CNS Library.
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Category: Energy, Science & Nature
CUC pushes all the buttons for OffRegs because CUC owns the majority of the OffRegs voting board members. I feel sorry for James having to put up with these CUC owned board members.
It is disgusting that CUC can charge a Fuel Charge Tax on residential solar owners generating their own power from their own solar equipment.
If you read CUC’s press release I think you will discover that they are not happy with OfReg. They put up a case for grid scale renewables, which will lower the price of electricity by $25m per year. Instead OfReg have decided it all has to be thermal and no savings for us consumers.
As for your comment about James I am more than very surprised that he and CREA have not been lobbying for cheaper solar rather than more fossil burning generation. Certainly a lost opportunity and really does make me question CREA’s agenda.
Why is it that OfReg has sat on a novel proposal for ocean thermal energy since the PPA (power provider agreement) was signed over 7 years ago? And the extensive, comprehensive and very costly EIA was completed over 8 years ago.
What’s more baffling is that the proposal was especially noteworthy since it presented no cost or risk to CUC or CIG if it didn’t perform in the agreed proving period. Could it be that CUC is concerned that should such a renewable technology prove itself to provide “firm, reliable and scalable power for all three islands that it might make it’s diesel engines redundant?
OfReg appear blatantly bias in favour of CUC as to their position on and consideration of renewable energy technologies and less than transparent on why certain technology proposals have been gathering dust on their shelves for years. Seems that OfReg works hardest to protect CUC’s monopoly rather than working to diversify and reduce our exposure to exorbitant fossil fuels price spikes and reliance on them.
Who is OfReg accountable to for not fulfilling their mandate and failing to achieve or even facilitate achieving milestones on Cayman’s transition to renewable energy?
Couple of questions. If a PPA was signed, as you state, that would imply CUC agreed with some terms to buy power from OTEC. Why then state that CUC is opposed to it?
Second question. You say an EIA was done but there’s only a terms of reference on the NCC website from 11 years ago, before that section of the NCA was even in effect. Where is the actual EIA?
In the hands of DoE of course. You expect TOR to be publicised in light of OfReg’s throwing the rug over this project? With regards to this project and a few other renewables projects OfReg is acting a CUC’s proxy, they speak with one voice. OfReg’s rejection of CUC’s solar aspirations is a smoke screen to make it seem as though it has the actual the authority over CUC’s decisions.
The TOR for the EIA is what is published. Nothing else. But it really doesn’t matter because it’s not like a new one isn’t needed after 10 years anyway…
Tell me what might have changed other than the OfReg and CUC negative position on this.
The baseline study conditions, for one. Generally, the ecological habitat assessments are valid for 2-3 years, so while the whole of the EIA doesn’t necessarily need to be redone, specific studies and chapters would certainly need a refresh.
Potential commercial counterparties, such as CUC (or OfReg, as regulating the commercial interaction), aren’t really relevant to the EIA.
Conspiracies abound!
The system isn’t broken. It’s doing exactly what is was designed to do.
Your job is to determine who benefits from its continued operation and how much.
Nuclear is fast becoming a more viable option as opposed to solar with the advent of Gen IV Small Modular Reactors. SMRs can have between a 30 and 60 year lifespan whereas CUC’s diesels lose efficiency after 20 years. These emerging technologies need to be on our regulator’s radar as once adopted in Western countries CAPEX costs and will fall in the range where they directly compete with solar and wind plus Levelized Cost of Electricity, LCOE from these plants is less than 7 cents per KWh. And UK is set to adopt this technology and construct it’s first plant in late Spring this year.
Heads up.
Understand, solar plus batteries can deal with daily solar variability but cannot provide firm power across multi-day cloudy periods.
That is something that must be asked CUC and, may be they have an answer.
May be it is time to look at the definition of Firm Capacity.
“We are already advancing a 22.5 MW renewable dispatchable solar-plus-storage project through a competitive process, and more will follow later this year.”
OfReg started this in April 2022. They announced their Renewable Energy Auction Scheme in 2021. Do they really think they have any credibility left that these promises hold water?
They have done next to nothing and continue to say “soon come.” For all the incoming politicians, I think you need to look at OfReg’s Board and Leadership and tell them “soon done.”
Could someone who knows please tell me how much we could be saving if renewable solar is built rather than thermal generation. I am interested to know what I am going to be missing out on.
CUC said $20-25 million per year of savings from the solar plus storage system that was denied by OfReg.
Wow! That is not small change. How can OfReg be acting on behalf of consumers if they are turning down that saving per year.
Who is going to challenge them on their decision?
So every other country has put in solar and storage and yet OfReg have put the brakes on renewable energy here.
Why not just change the definition if that is holding things up and get on with lowering the cost of my power.
Is it just me or is it a little strange that the president of the renewable energy advocacy group CREA has not come out fighting to overturn this decision and lobbying for a change of the firm power definition to enable renewables to be built?
Not allowing cheaper grid scale solar/storage will result in high costs for consumers. However, if you do put it in cheap grid scale renewables then the price of electricity will drop and then solar on peoples houses becomes even less economic, which in turn will impact the presidents personal business. Too many conflicts of interest here on Cayman.
I just couldn,t read this article and not comment on it.
The National Energy Policy that the Goverment calls for the Cayman Islands to transition to 100% renewables by 2045, in my opinion is not feasible if we are looking at Solar Energy to power these Islands. The demands for stable and firm energy can and has been fossil fuels for almost 300 years. I understand that there are evironmentalist groups advocating for 100% Solar Power Energy to lower Green Gas Emision to protect the eviroment, but one must ask this question, at what cost? We all have to look at the big picture to realize that a lot of businesses and people in general rely on stable power to run their businesses or their homes. What about running Air-conditioners and lights 24/7, do we think Solar Energy can withstand that kind of demand for energy, or what about people at home on hot summer days and nights that need their air-conditioner to keep them cool? I don,t see Solar Energy capable of handling that kind of a demand, though I agree with this idea of reducing green gas emisions, I don’t agree on Solar as our Primary source of energy but rather a backup source of energy instead, because of the batteries and the Solar Panels reliant on the sun the charge the cells. Sun doesn’t shine everyday in these beautiful Islands and we are going to need constant sunlight to keep these Solar Panels charge to be able to keep up with the everday demand for stable firms distribution of energy. When looking to creating new technology and clean energy, it is always good to look at all aspects of life before making changes to the way people live their everday lives and the impact it can have on society on a whole.
Live Free…
If you look around the world most countries have put in solar and batteries, which has lowered the price of electricity. Putting some solar in here will reduce the reliance on diesel by millions of dollars. That would mean lower bills for consumers like you and me.
You raise a really good point about a stable electricity system. My business relies on it too. So having 100% solar is not good since the sun does not always shine. I think that is why the recommended proposal was for some solar and batteries and some new thermal. That would reduce the electricity bills, but not compromise the electricity supply.
Exactly!
CUC is not asking to go 100% solar, it sounds to me they want to slowly wean themselves off (expensive) diesel.
It’s like asking a turkey to vote for Christmas!
OfReg deciding to reject CUC’s proposal for a mostly renewable option and instead say it all has to be fossil fueled generation is a complete embarrassment. More emissions and more cost to consumers – thank you -NOT! Why not just change the wording of the power definition and get on with the better option. I already pay enough for my power.
Certificate of Need (CON), the irony is that we are being conned out of our sustainable energy goals. If anyone thinks OfReg, CUC and quite possibly Cayman’s existing and would be fossil fuel providers aren’t conspiring to perpetuate their existence and maintain their status quo, is grossly naive.
As a comparison, look at what Dart’s Island Energy (Formerly CBP&L) is doing on Little Cayman. OfReg recently approved a business case for them to fund a large solar farm with the funds that ARE SAVED by not burning diesel fuel – the payments for the capital to buy and install the solar are paid with the money they would have spent on diesel. And that cost will not rise with world events, whereas diesel will.
So basically what could have happened here, but Dart doing it directly?
Island Energy has been talking about solar on the Brac for ages, but I’ve not seen anything yet. You sure things have been approved? Perhaps someone from Island Energy can comment.
Wouldn’t it be a little strange that OfReg can approve solar on Little Cayman and the Brac and not on Grand Cayman. How does that work?
Economies of scale. Patience.
That doesn’t answer the question of why solar/storage has been approved on the Brac/Little Cayman and not approved for Grand Cayman. Appears to be different rules applied to different places. Can someone explain why?
It hasn’t, Ofreg have had the Island Energy solar proposal for 2 years and done nothing with it
Not true, I understand Dart submitted the request for solar 2 years ago, and Ofreg have done nothing with it
So it looks like the Darts/Island Energy solar proposal is also dead in the water. If OfReg rejected large scale solar for Grand Cayman then the sister islands will have the same treatment.
A sad day for the Cayman Islands with limited chance of moving to renewables and poking the consumers in the eye with higher electricity prices. Shame on you OfReg.
Hawaii makes rewnewabls work, on multiple islands. Cayman could, if it had the political will.
It is truly shameful that as a nation blessed with an abundance of renewable solar capability, we currently run at less than 3% renewable and have no plan to move away from oil or gas. We have a utility company that has manipulated the market for twenty plus years, we have a government that is at best silent and more likely complicit and a utility shareholder base that enjoy the proceeds of profit over environment. It’s a national disgrace.
# Smash the CUC Monopoly.
# Separate the ownership of generation from ownership of distribution.
# Scrap the CORE programme.
# NET METERING NOW.
# Cast aside the shackles of a monopoly.
We’ve had other utility companies in the past who thought they too were indispensable (remember when Skype used to be blocked on your computer?) – until they realized they weren’t – and competition dragged them, kicking and screaming, into the (then) 20th century…
If you read the information OfReg put out it says that anyone can bid on the generation projects. Not sure I follow the logic behind your statements.
you realise that politicians have shares in CUC? there’s your answer to the above requests.
clear as mud. thanks for nothing ofreg…again.
Solar/wind with battery storage is firm and bankable everywhere else on Earth at a third of CUC’s cost. Voters might ask who, if not them, does OfReg work for? There’s corrupt, and then there’s Cayman corrupt, underwritten by the Lodge’s millionaire CUC dividend collectors.
Deeply insightful comment.
Great comment. Someone needs to investigate how OfReg made such a stupid decision. It doesn’t represent any value to consumers and will keep my bills high!! Shame on you OfReg!
As usual there’s much more to this story than CUC would have you believe….
Yes, it is unfortunate that we are in a position where we are replacing fossil fuel generation with more fossil fuel generation in 2025, however the source of this problem originates with CUC and not the regulator.
It’s also largely replacement of existing generation and very little new generation and does not have to materially affect the rapid deployment of renewables in cayman, of which cuc has been the main barrier despite what they say on talk shows and is the primary reason the new national energy policy was passed in the manner it was in 2024.
For years CUC has attempted to diminish the growth of third party owned renewable energy systems, which would have helped to avoid the grid problems they’re experiencing now. The average (levelized) cost of those systems, if allowed to scale, would have been less than their diesel fuel but again CUC stood in the way of that happening.
It is only thanks to the new National Energy Policy passed in 2024 that we can remedy this dynamic going forward.
Reading their press release CUC seems to be trying to shift the blame to the regulator for not prudently resolving the problem with renewables, however the regulator has to follow the law and CUC has been trying to have the regulator approve a large utility scale solar farms WITHOUT any competitive bid process (which is in violation of the law, as per OfReg) for years now.
This is just a continuation of that years long effort considering their now solidified advantages over other bidders in any RFP (ie- they already bought hundreds of acres of land specifically for solar farms, they already have predeveloped plans, costings, contractors, etc) before anyone else has even seen an RFQ much less an RFP and they bought all that land to gain a clear and specific advantage WITHOUT any approval from OfReg who didn’t find out about it till after the fact.)
In simple terms CUC created the problem through their own actions and is in effect asking the regulator to approve a project that would circumvent the law in order to remedy to a problem they themselves created all while hiding behind renewables as a cover.
It’s been quite sad to see the pretzel you’ve had to twist yourself into in order to act like this isn’t a huge blow to advancement of renewable energy for Cayman.
As the head of the “Cayman Renewable Energy Association” is it actually your position that solar plus storage cannot in any way, shape or form provide firm capacity, when other places all over the world allow the very same to participate in firm capacity markets? Reading OfReg’s press release and decision document, that’s the fundamental reason for their decision.
Is it actually your informed position that this “is largely replacement of existing generation” when there is only 37MW coming out but 90MW coming in?
If those things still hold true after reflection, it’s a real shame.
Thanks for that little TidBit, Mr. “Anonymous”
Not quite the response I would expect from the head of the renewable energy association when a huge opportunity to make strides on renewable energy is turned down.
Not sure I follow you James. Anyone can bid on new generation projects so not sure how you feel CUC is manipulating things.
In fact reading some of the history it appears CUC proposed a solar farm back in 2021. The regulator agreed it was a good idea, but it would need to be tendered to make sure the process was competitive. That appears fair to me – especially since the lowest price can be selected. What I am not sure about is why it has taken four years for the regulator to run this competitive tender? Perhaps someone in the know can explain why there has been such a delay?
I am not sure your interpretation of the facts is correct. Lets look at them:
– 2021: CUC asked OfReg if they can build a solar farm to ensure there is sufficient generation to meet the growing demand.
– 2021: OfReg tell CUC that they cannot build the solar farm, but instead they will run a competitive tender to ensure fair competition.
– 2024: OfReg announce that they are about to issue the tender for the solar farm.
– 2024: CUC issue a press release stating that they are short of generation since the solar farm has not been built.
– 2024: CUC issue a report outlining the future generation need to meet the growing demand. The recommended option is for 100MW of solar and 36MW of thermal generation.
– 2025: OfReg announce that the original 2021 solar farm tender will be issued in February. It is now almost May and there is still no sign of the solar farm tender.
– 2025: OfReg announces that they will not approve the recommended 100MW of solar and 36MW thermal, but instead will issue a tender for 90MW of thermal. The decision appears to be based on the definition of firm generation (with CUC saying it is allowed within the definition and OfReg saying it is not) and the cost of the thermal option is much more than the renewable option.
So in response to your statements:
– OfReg turned down CUC’s offer to build grid scale solar in 2021 and instead said they would run a competitive tender. It has been 4 years since this was announced and the tender has not been released yet. Demand has grown and I imagine now there is limited generation to ensure the lights stay on.
– Anyone can bid on new generation. It is an open competitive process. I don’t believe CUC can just go out and build new generation. It all has to go through the OfReg competitive tender process, which is run by OfReg.
– If the definition of firm generation is unclear or open to interpretation why has OfReg not changed it to allow for renewables to be included in the generation mix. Perhaps someone who know about this can explain it. From the layman view it appears a small change would allow for cheaper renewables to be installed.
– I am not sure how you can blame CUC for holding up renewables or using any monopoly power. They appear to have presented at least two proposals for solar (which will be competitively run by OfReg), but the regulator appears to be slow in responding – or in the latest case has turned it down.
Before someone asks I work in the finance sector, but am interested in markets and regulation. I find it intriguing how our country cannot more forward and everyone spends more time arguing rather than getting on with things.
People need to realize how pathetic OfReg are and have been. Look at thier horrible mishandling of Telcoms for so long!
James, sad to see you take this view, your feelings for CUC are well known, but you put yourself out as head of CREA to be pro-renewables, and yet are happy to accept more diesel generation for the future. Shame buddy, not good for Cayman
More consumer disaster authored by the PPM.
aka…the major shareholders of cuc.
welcome to wonderland.