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Cayman can become ‘global leader’ says CUC boss Richard Hew

Local News 03 Aug, 2022 Follow News

The Chamber of Commerce’ Annual Parliamentary Luncheon at the Ritz-Carlton Hotel

By Christopher Tobutt 

“Empowering Grand Cayman to be a global leader,” was the vision for Cayman’s future shared by CUC President and CEO Richard Hew during the recent Chamber of Commerce Parliamentary Luncheon at the Ritz-Carlton Hotel.  “We need to move forward and we want to participate in this great energy transformation of Grand Cayman. We must move now to green our grid, and reduce costs to consumers and to demonstrate to the world our commitment to the environment,” he said.

Mr. Hew said that CUC aimed to, “Meet the national and global energy emissions reductions, and actually reduce and stabilize energy costs by 2030,” but CUC’s vison could not proceed without full participation from all stakeholder, he added.    

The CUC-owned electricity distribution grid represented a public good whilst being a natural monopoly. Unlike other monopolies, however, CUC’s prices and returns were carefully controlled: “Our service level, our investment plans and our returns are regulated. The regulator and regulations being a proxy to competition. Over the past five years we have averaged a seven percent return on rate base, which is certainly not unreasonable when compared to the North American and regional utility industry,” he said.

While the grid itself was a natural monopoly, CUC had been open to competition from other electricity generators since 2008. “We only ask that all stakeholders be held to the same standard as CUC,” he said. “The premise on which we stand is that the grid allows all consumers to benefit from lower cost, and higher availability due to larger scale. If we abandon this premise, the public good is eroded.”   

The first half of Mr. Hew’s presentation showed CUC’s significant investment in plant and infrastructure over its 56 years of operation as well as the various ways the company had sought to accommodate renewable energy, including wind and solar, into its power mix. Solar suffered from major fluctuations in output, with the maximum being produced during the day, but fading away to zero in the evenings, just when electricity is most needed. Wind turbine energy was steadier, but a project for a windfarm had been derailed because it was found to interfere with the operations of air traffic radar installations.

“We will continue to build a robust reliable and resilient grid with key sections to be placed underground to withstand hurricanes as our indoor substations currently do. We will have a number of utility-scale solar plants connected to the grid, to reduce the cost of energy we would also have large solar batteries connected to the grid to store excess energy during the day to be released in the evening peak demand period.  We will convert our diesel engines to natural gas so we continue to serve have the capacity to run through the night or for prolonged cloudy periods or following hurricanes when many solar panels may be destroyed. We will support the completion of the waste to energy project and we will also purchase energy from that plant.”

Turning his attention to recent price rises, Mr Hew said: Volatile energy prices are not good for consumers or CUC, although fuel and power costs are passed through to consumers without markup – higher costs hurt the consumers and the economy we aim to support. The solution to this problem is to replace diesel as our main source of energy and to move to renewables with a lower and more stable cost.” In 2016 CUC had developed an integrated Resource Plan: “The study called for 140 mw of utility-scale solar, batteries for storage and conversion of CUC’s generators to cleaner and more stable-price natural gas. These would lead to 68 percent reduction in greenhouse gas emissions with 60 percent of the energy coming from renewables by 2030,” Mr. Hew said.

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