CUC accused of drip-feeding Cayman’s renewable energy capacity

(CMR) The Cayman Renewable Energy Association (CREA) has accused the Caribbean Utilities Company (CUC) of drip-feeding the Cayman Islands' renewable capacity rather than allowing individuals to take renewable installations on their properties into their own hands.

Through its Customer Owned Renewable Energy (CORE) program, the CUC has limits for solar distribution to address grid stability concerns. However, with CUC being the exclusive energy provider on the island, CREA said, “this just adds further control to their monopoly.”

“CREA does not support CUC’s decision to explore options for assisting customers in obtaining access to solar and storage through CUC-developed programs and financing, and neither should the public,” CREA said in a release following an interview by Sandra Hill with Sacha Tibbetts on The Cold Hard Truth.

Mr. Tibbetts had spoken to the success of CUC's solar program, which saw a quick uptake of  CUC’s 3 MW increase to their capacity, with solar panels sold out within 5 hours of being made available to the public.

However, CREA said this rapid uptake was a result of CUC control of the market, determining when and the amount of solar energy which can be implemented.

“While it is heartening to see the residents of the Cayman Islands so eager to adopt solar energy, it must be noted that the quick uptake of this capacity is primarily due to renewable scarcity and artificial demand created intentionally by CUC and sadly allowed by OfReg,” the release stated.

CREA said the organization wrote to OfReg and explained in detail that if CUC were again allowed to release capacity in this manner, it would be gone immediately.

“OfReg once again chose to do nothing, and exactly as CREA predicted, the capacity was immediately gone. The speed at which this increase in capacity was bought up shows that there is the demand for solar on the islands,” the release continued.

To meet the Cayman Government’s National Energy Policy goal of supplying 70% of the island’s electricity needs with renewable energy by 2037, the island should aim to install as much distributed solar capacity now and in the immediate future as possible, CREA said.

 The organization said the island needs to install tens of MW’s worth every year to reach this 70% target, not having CUC release small amounts of capacity every few months or years. CREA said installing solar panels on rooftops was an effective way to go.

CREA said this stop-start increase of capacity is not sustainable for local renewable energy installers
and continues to frustrate consumers. It also prevents competition in the energy sector, not leaving customers with any option but the CUC. CREA said this sporadic and limited capacity release has already put local companies out of business.

In response to CREA, the CUC said it communicated distributed solar limits to the Utility Regulation & Competition Office (OfReg),  CREA, and the public in its 2017 Infusion Study. CUC reiterated that the size of the market is constrained by grid stability and cost parameters.

The Company said despite CREA questioning the limits, there have been no challenges to the validity of the 2017 Infusion  Study and the limits imposed therein in the six years since its publication.  

“As the owner and operator of the grid under Licence, CUC has an obligation to ensure safe,  reliable, and affordable energy for all consumers. If these tenets are not upheld, then the public good of having a grid is eroded,” CUC said in a statement in response to CREA.

CUC further stated that it is not against rooftop consumer solar but is a facilitator of the CORE program by giving access to the grid to the participants, buying their solar energy, and passing those costs on to all customers without markup. In fact, every rooftop program which is in existence on  Grand Cayman was proposed by CUC and approved by OfReg, the electricity company said.

Competitors are being affected.

CUC has also been accused of operating to capitalize off the failure of its competitors. According to CREA,  CUC is the primary beneficiary of intentional actions to limit the adoption of consumer renewables in the Cayman Islands, which risks putting their competitors in the renewable energy sector out of business by shutting down their ability to operate for months at a time.

CREA wants CUC to declare the maximum capacity to which solar energy could be raised at this current moment and provide evidence of this to the public.

Tariff rates

CREA said the rapid uptake of solar energy does not indicate that the rates do not need to be higher as the current rates being paid are not commensurate with the value consumers should be getting for their solar.

“The main reason for the speed of uptake is due to the bottlenecking of renewable capacity carried out by CUC. CUC thus creates artificial demand by closing the programs for months and only releasing limited capacity (scarcity),” CREA stated.

However,  CUC said it does not support paying inflated prices for energy from rooftop solar producers and passing these higher costs onto other consumers. Therefore, the  Company does not support CREA’s position that CUC must pay CORE participants higher per kilowatt hour (“kWh”) rates than that which provides them with a reasonable return on investment for their renewable energy systems. 

CREA further stated that “if CUC truly has the country’s best interest at heart over a desire to further their interests, they should explore every option to encourage the competitive private sector-led installation and financing of renewable energy systems on residential and commercial properties. This includes supporting private sector-led financing and attractive rates of purchase to encourage solar installations in line with the Value of Solar study, the introduction of off-peak energy charges, and the removal of barriers to full capacity of consumer solar PV and other renewables.”

“These capacity restrictions and rate arguments are the actions of an entity desiring to move from a fossil fuel monopoly to a renewable energy monopoly,” the organization continued.

The rise in global fuel prices over the past few years has highlighted the need to move away from an energy system driven by fossil fuel usage, and solar is just one technology that the Cayman Islands need in order to do their part in mitigating climate crisis, CREA stated.

“Meeting the renewable energy targets in the National Energy Policy but enabling a renewable energy monopoly in the process will hurt the people of the Cayman Islands while only benefitting CUC and its shareholders,” the organization stated.

Meantime, CUC said the Company believes that energy supplied from rooftop solar can be provided at affordable costs. CUC said for this reason, it will always make the case for solar rates that are beneficial to benefit installers, the purchaser of a rooftop solar system, electricity bill payers, and the general public.  CUC added that it supports and facilitates renewable energy on the grid and is not a competitor to CREA or its solar installation contractor members.