Today's Date: 27 November 2015
Last Updated: 27 November 2015 10:31:00 EST
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Policy proposes tariff for renewable energy

Ms O'Connor-Connolly For the first time in its 46-year history in Grand Cayman, Caribbean Utilities Company will face competition in the electricity generation business. – Photo: File

A national energy policy that proposes a new tariff to help support public utilities’ efforts to bring renewable energy to the Cayman Islands is just one of a number of major proposals considered in the long-awaited document released Friday by Premier Juliana O’Connor-Connolly.  

The overview not only includes consideration of both streamlining traditional energy sources and changing laws and dutiable amounts to promote wind and solar energy, but it also looks at other areas like water, wastewater and land use, as well as transportation options and public education.  

The policy sets out long-term goals for energy use by the year 2030. Those include:  

A 21 per cent overall savings in energy use from all sectors, encompassing a 27 per cent savings in electricity use, a 20 per cent reduction in water use and a 16.5 per cent reduction in transportation fuel use.  

A goal that 13.5 per cent of all electricity sold to consumers be generated from renewable energy sources.  

A goal of a 19 per cent reduction in carbon dioxide emissions.  

The policy, which has been under review for two successive government administrations, promotes public utility usage of renewable energy sources, but suggests that electric utilities “securely recover through tariffs the cost of investing in firm, as well as non-firm, renewable energy”.  

“The tariff component could be described as a ‘sustainable energy factor’, and would allow utilities to recover their direct investment in all sustainable energy products ... plus an allowable return on that investment,” the national energy policy states.  

Other energy initiatives suggest the revision of airport and Doppler radar exclusion zone requirements to allow for “utility scale” wind energy in Grand Cayman; the reduction or complete removal of duties charged on the importation of renewable energy systems for consumers and related equipment; a change in rates charged by utilities that reflect that actual cost of providing the service [the cost of servicing larger customers is usually lower than servicing smaller 
customers]; changing the islands’ building codes to mandate energy efficiency for lighting, doors, roofs, insulation and the like – even including landscaping.  

Renewable energy funding to create “green financial incentives” could include favourable loan terms for items like solar panels or windmills, as well as government-guaranteed loans, grants or rebates for such items.  

The government policy suggests that an “energy audit system” could be used to check efficiency of energy on for sale and leased properties.  

It also suggests that utility companies be “encouraged to assess whether the benefits of undergrounding lines would exceed costs” and seeks to allow utilities some mechanism with which to recover those costs.  

With regard to water usage, the government policy encourages “rainwater harvesting” to supplement piped water, even to propose that underground rainwater tanks be included in new developments.  

The government also seeks to encourage fresh groundwater use from wells, but also seeking to limit extraction rates for sustainability purposes.  



A major section within the national energy policy deals with transportation costs.  

The policy generally seeks to encourage bike riding, walking and public transportation as a way to decrease traffic congestion and lower fossil fuel usage. It also suggests that companies implement more flexible or staggered working hours to clear some of the rush hour traffic from the roads.  

Other measures proposed in the policy seek to “increase road supply”, according to the report.  

“[These include] new roads and additional lanes and one-way traffic on selected routes and at selected times,” the policy states. “Adopt measures to decrease road demand, including congestion pricing, restrictions to circulation and staggering selected public services [such as trash collection] to off-peak times.”  

Congestion pricing is usually defined as higher peak-time prices for public transport services like buses, metrorail, or traffic tolls. In urban centres, this usually means cordoning off a city centre and charging motorists for passing the cordon, toll roads, tolled traffic areas or charges for access to a specific lane of a road.  

The energy policy also proposes that certain areas be made “pedestrian only” and that “Park-n-Ride” or other shuttle services outside those areas be used at satellite parking lots to get people to and 
from their destinations.  

No nukes 

According to the plan released Friday, it will be the government’s policy to “indefinitely postpone” any assessment of the viability of nuclear energy for power generation.  

The economies of small modular nuclear reactors are considered to be “unfavourable”, according to the policy, and problems of regulatory competence, accident liability and handling of spent fuel would all be problematic.  

“Clause 23(4) ... of the Electricity Regulatory Authority Law, which states that the primary source of energy shall in no circumstance include the use of nuclear fission for the generation of electricity, shall remain unchanged,” the 
policy states.  

However, the plan does seek to assess whether the use of what’s known as heavy fuel oil, in place of diesel for power generation, should be considered.  

Heavy fuel oil is a residual oil derived from distillation or the cracking system of natural gas processing. It is generally used for marine diesel engines aboard 
large vessels. 

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