Electricity

3.3.1 Ensure that the legal and regulatory framework promotes renewable energy development in pursuit of the NEP’s renewable energy target and supports the longer term goal to reach 100% renewable energy. In Progress

The CORE programme which was revised and approved by the regulator in 2012 has gained popularity with both residential and commercial customers. The programme has allowed customers to connect small scale solar systems or wind turbines to CUC’s distribution system and to reduce their monthly energy bills by generating their own electricity while remaining connected to the CUC grid. It should be noted that the programme is subsidised by the non-CORE customers, as the rate paid to CORE customers for their electricity production, is higher than the cost CUC would normally incur and charge to customers for the same energy. In January 2020, the grid reached its projected variable renewable energy capacity. This meant no additional applications for CORE could be considered due to their potential to negatively impact the grid and by extension, consumers. In May 2020, the Cayman Islands Government issued a policy directive for the re-allocation of 700 kilowatts (“kW”) of the 1-megawatt (“MW”) Consumer Owned Renewable Energy (“CORE”) capacity, which had previously been allocated to the Cayman Islands Government. Ministry provided the allocation in early May and within a week, residential applications received exceeded the 500kW allocation. In February 2021, OfReg issued a draft determination to reallocate 500kW from the DER programme to the CORE programme. In August 2021, OfReg issued its final determination to allocation 3MW of distributed generation to the CORE and DER programmes. Once the utility scale battery is installed, new programmes may be established for the provision of distributed generation.

3.3.1.1 Ensure that promotion of the social, environmental and economic benefits of renewable energy takes into account the cost of energy to the jurisdiction, while achieving established standards in safety, reliability, power quality and a prudent diversification of the generation portfolio. In Progress

An Integrated Resource Plan (IRP) was prepared in 2017 to cover the period from 2017 – 2045. The purpose of the IRP is to provide a roadmap for future resource decisions for CUC, covering issues around transitioning the generation portfolio from a largely fossil based to a renewable dominated portfolio, need for natural gas, and value of storage, and baseload renewable generation technologies. There are a few differences between the goals in the IRP and the NEP. This should be taken into consideration with the 5-year review of the NEP. The IRP is due to be reviewed soon.

3.3.1.2 Ensure that the Cayman Islands’ natural environment is safeguarded while renewable energy resources are developed. In Progress

An assessment of land on Grand Cayman, (raw land, man modified land and quarries) was conducted with the Department of Environment, Department of Planning, the Energy Policy Coordinator and OfReg. Crown land and private parcels have been identified as suitable for utility scale solar. The Ministry responsible for Lands was consulted and approximately 190 acres of Crown land may be available to reserve. Final assessments are currently being done.

3.3.1.3 Ensure fair competition for procuring utility-scale sustainable generation utilizing a competitive or market based methodology established by the regulatory framework. In Progress

On January 27 2021, OfReg issued a draft determination to approve the renewable energy auction scheme as the best way to encourage and procure investment regarding renewable energy in the jurisdiction. It is anticipated that an annual capacity of 25MWs generated from utility-scale solar be added to the grid from 2021-2023; 20MWs in 2024, 20MW in 2029 and 2030; a capacity of 20MWs generated from energy storage be added to the grid in 2022, and another 40MWs in 2030. OfReg approved a 20MW utility scale battery installation for CUC. This will enable CUC to store renewable energy for backup power. The battery will reduce the need to bring generators online and therefore reduce the amount of fuel required. It should reduce diesel consumption by 6% and also CO2 emissions by 8% and cut bills for CUC customers. The available capacity for Distributed Generation programmes will be increased by an additional 12MW. The battery is due to be installed by the end of 2022.

3.3.1.4 Permit any licensed utility to participate in the solicitation of utility scale sustainable/renewable energy projects run by the regulator for firm or non-firm power, subject to the terms of the utility’s license. Pending

This is covered in the licenses. Solicitations for firm or non-firm power will be conducted by OfReg in an open and transparent manner that will allow interested parties to bid on projects.

3.3.1.5 To ensure that consumers’ interests are protected, the regulatory regime will determine all rates, tariffs and commercial interests for utilities via their relevant licenses regardless of whether the energy source is firm or non-firm, renewable or otherwise. Pending

A Value-for-Solar study has been initiated and should be completed in 2022.

3.3.1.6 Government will keep under review fee/tax structures encouraging the adoption of sustainable energy projects in furtherance of the Policy, having due regard to the requirement to create a net benefit to the islands and its inhabitants. Pending

3.3.1.7 Increase the penetration of distributed renewable energy generation on the grid utilizing existing developed spaces to the extent feasible. In Progress

OfReg approved a 20MW utility scale Battery Energy Storage System (BESS) for CUC which will enable CUC to store renewable energy for backup power. The battery will reduce the need to bring generators online and therefore reduce the amount of fuel required. It should reduce diesel consumption by 6% and also CO2 emissions by 8% and cut bills for CUC customers. The available capacity for the Distributed Energy Resources programme will be increased by an additional 12MW. CUC is near conclusion of negotiations with the preferred BESS bidder to finalise the contract. It is anticipated that due to supply chain disruption the 20MW battery will not be commissioned until the end of 2022. Once the battery is installed, new distributed RE programme will be established.

3.3.1.8 The regulatory framework will provide for a licensed utility to be required to purchase utility scale sustainable/renewable energy such as renewable or cogenerated power from a third party when the cost of the available sustainable/renewable energy is below the licensed utility’s avoided cost. Similarly, the regulatory framework will allow for a utility to pay a margin, approved by the regulator, above the utility’s avoided cost for sustainable energy to meet targets established under or to generally further the goals of the Policy, provided that the margin will not have a significant impact on the overall consumer prices in the Cayman Islands In Progress

• This is being done in conjunction with a framework for soliciting RE.

• The price paid for utility scale renewable energy will be from a competitive process.

• Other rates for roof top programmes such as DER are to be based on the utility’s avoided cost of energy.

3.3.1.9 Facilitate sub-metering in multi-occupancy buildings consistent with electricity laws and/or utility licenses. Completed

Sub-metering is now permitted in multi-occupancy buildings. See section 10.3 on page 17 of the CUC Customer Service Code

https://www.cuc-cayman.com/upimages/otherpdf/1528145866cuc_customer_service_code_010618.pdf

3.3.1.10 The regulatory framework will require utilities to plan their electric systems using a holistic approach including both traditional resources and the deployment of utility and distributed scale sustainable/renewable generation to optimally meet system requirements. Completed

An Integrated Resource Plan (IRP) report was completed for CUC in 2017. This report covers a 29 year planning period from 2017- 2045. The purpose of this document is to provide a roadmap for future resource decisions for CUC, covering issues around transitioning the generation portfolio from a largely fossil based to a renewable dominated portfolio, need for natural gas, and value of storage, and baseload renewable generation technologies. The report can be found on the CUC website and in the “Publications” section of this website.

3.3.1.11 Promote grid-connected consumer owned renewable energy programmes in Grand Cayman, Cayman Brac and Little Cayman in a framework which provides: In Progress

See 3.3.1.8 - OfReg granted approval for CUC to install a 20MW battery. New distributed RE programme to be considered after installation. The base rates for the provision of solar on Cayman Brac and Little Cayman, are still being determined by OfReg. OfReg further states that energy efficiency measures, solar water heaters and natural gas would be a better fit for the sister islands and discussion is needed for the transition period.

3.3.1.12 Develop and keep under review an appropriate import duty regime for all renewable energy systems and equipment, directly related to and designed for the operation of these systems, including energy storage. The differentiation between commercial and residential systems/importers will be eliminated and maintained at zero percent (0%) for the first five years (2017 – 2021) of the Policy. In Progress

The tariff rate has been reduced for several items related to the installation of renewable energy and for electric vehicles and bicycles.

3.3.1.13 Facilitate the development of financing products or mechanisms to establish “green” financial incentives for consumer-owned renewable energy systems and equipment directly related to and designed for the operation of these systems which could include dedicated consumer finance facilities, favourable loan terms, grants and rebates. In Progress

The provision of funding and loans for renewable energy has been listed a priority in the Strategic Policy Statement for 2022-2024.

3.3.1.14 The Government commits to continually improving the planning and permitting processes on all islands for renewable energy development to decrease costs, provide transparency, and transform electricity generation to primarily renewable energy sources. In Progress

• Legislation needs to be amended to transfer some of the Electricity Law and Regulations responsibilities from OfReg to the Department of Planning.

• The Department of Planning was asked to review the suitability of a permit notification vs an application process for small residential solar.

The Department of Planning raised the following concerns: What makes the solar installation sector different from any other trade in the building industry that would allow a for notification process vs an application process? Why not do that for all trades, allow them to just start work whenever they are ready and just notify the depart ment. What has been identified as the current issue with the application process, once identified we can consider ways to address the issue. I understand that from a business point of view that a notification process vs an application process is beneficial but is that a consideration in the best interest of the life and safety of the public. If this was done for the PV sector how long will it take for the Contractors Association and other sectors in the industry to request the same?

The Department has made adjustments and will continue to ad just the application review process to facilitate a quicker turnaround time.

• In July 2020, the Department of Planning posted a set of requirements for the submission of permit applications on their website.

3.3.1.15 Review the airport exclusion zone requirements and restrictions, to consider whether and how to revise them to accommodate renewable energy, including wind energy facilities on Grand Cayman. In Progress

This is currently under review

3.3.1.16 Review the exclusion zone requirements and restrictions for a doppler radar station, recognizing the benefits of such station coexisting with renewable generation, to consider whether and how to revise exclusion zones to accommodate utility scale wind energy facilities on Grand Cayman. In Progress

A request for quotes (RFQ) was issued for an organisation to carry out a research project that would assess the impact of the Doppler radar on wind farms. Two quotes were received. However this has been suspended pending the CIAA investigation into a new radar system for air traffic control.

3.3.2 Ensure that regulatory frameworks balance the interests of consumers in price, affordability and quality of service while facilitating investments, through competition, that optimize efficiency, reliability, safety, environmental performance and the security of the public electricity supply. In Progress

3.3.2.1 Ensure that investments in electricity infrastructure are supported by rigorous analysis on a basis of sound planning procedures such that electricity generation solutions are timely, economic and reliable, and that transmission, distribution and supply infrastructure are maintained to reliably meet electricity demand. Require competition in the procurement of generating capacity. Completed

This is covered in CUC’s Transmission & Distribution Licence and Cayman Brac Power and Lights Transmission & Distribution Licence and in the OfReg (ERA) Capital Investment Plan Rules, 2012. Solicitations for firm or non firm power will be conducted by OfReg in an open and transparent manner that will allow interested parties to bid on generating capacity projects.

3.3.2.2 Lead a tariff setting process In Progress

This process is well on the way as demonstrated by the following:

① Demand rates implemented for Large Commercial

② Demand rates imposed for all DER customers

③ Time of Use rates implemented for EV charging

④ Other rates and programmes still under review

⑤ RFP issued for Value for Solar study (VOSS). The study is expected to be completed in Q1 2022 and the results will be used as a regulatory policy tool for future distributed generation tariff setting.

3.3.2.3 Implement advanced metering and smart grid technologies to optimize sustainable/renewable electricity generation and consumption by customers (supply and demand) to the extent that these technologies will improve service delivery, reduce overall cost of service and increase the security of energy supply. Completed

CUC has installed smart meters on all properties that opted for these meters and customers can track their energy usage via the CUC website.

3.3.3 Promote the utilization of brownfield sites such as marl-pits in the build-out of renewable energy facilities. In Progress

Approximately 190 acres of man-modified Crown land have been identified as potentially suitable for utility scale solar, without the need for an Environmental Impact Assessment (EIA). Usage of these sites can potentially accelerate the deployment of solar PV farms and thus assist in achieving the NEP goals in the desired timeframe. This strategy duplicates 3.3.1.2.