As part of plans to increase the use of renewable energy in Cayman, the Utility Regulation and Competition Office (OfReg) has announced that it has made its final determination on a Renewable Energy Auction Scheme (REAS).
OfReg will oversee the competitive bidding process from potential providers of renewable energy planning to enter the market.
The REAS which will be implemented in Q1 of 2022, will rely on competitive forces.
According to OfReg, the new procurement process for renewable energy contracts “will play a significant role in accelerating green energy production, and allow the Cayman Islands to move closer to achieving the NEP renewable energy ambitions of 70% by 2037, whilst delivering technology diversity, at the lowest cost to electricity customers.
There’s a massive global push towards generating more renewable energy from solar, wind, geothermal, wave action, fracking and other methods to reduce dependency on fossil sources.
This is considered critical to minimising the impact of climate change for which small states such as Cayman are particularly vulnerable.
There are also considerable cost implications as renewable energy will ultimately be cheaper.
OfReg says the Renewable Energy Auction Scheme(REAS) that it will adopt comes out of reviewing submissions received from the general public, licensees, and other interested parties via two public consultations.
Under the REAS, which will be managed by OfReg, potential energy producers bid against each other to supply energy through long-term contracts at the lowest possible price.
The utilities regulatory agency programme said the new process was developed to enable the procurement of renewable energy at competitive prices while advancing the goals of the National Energy Policy (‘NEP’).
It further explains that “the final determination outlines the main policy objectives and external factors impacting the design of the new scheme, setting the context for the volume of renewable energy capacity to be procured under the REAS, and the general framework to be followed.”
OfReg says it supports greater renewable energy generation growth in the Cayman Islands and to that end, it has been putting in place several regulatory initiatives to facilitate the addition of renewables into the Cayman electricity market.
It also says the REAS takes 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.
OfReg CEO Malike Cummings said: “The REAS sets out the mechanism for the procurement of utility-scale renewables through a transparent, competitive and robust process.”
He also stated that: “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.”