OfReg to auction green energy projects
Cayman Island
(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.
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