CUC s Response to Alternative Energy

Transcription

1 CUC s Response to Alternative Energy 13 th Annual Caribbean Energy Conference January 24-25, 2013 I Paradise Island, The Bahamas Richard Hew, President & Chief Executive Officer CUC s Caribbean Response Utilities to Company, Alternative Ltd. Energy I 2013 Annual Caribbean Energy Conference Grand Cayman, Cayman Islands

2 The Cayman Islands The Cayman Islands is made up of three islands Grand Cayman, Cayman Brac and Little Cayman United Kingdom Overseas Territory Population is approximately 55,000 Pillars of the economy are Financial Services and Tourism

3 The Company CUC began operations in May 1966 Went public on Toronto Stock Exchange (TSX) in 1990 Major shareholder is Fortis Inc. from Newfoundland, Canada 27,000 customers / 102 MW peak demand (June 2010) 20-year exclusive Transmission and Distribution Licence signed in 2008 Price cap with performance measures/fuel cost flow through 21.5 year non-exclusive Generation Licence Competitive bid for firm capacity

4 Regulatory Framework CUC regulated by the Electricity Regulatory Authority (ERA) CUC responsible for load forecasting and generation planning (T&D Licence) CUC or Electricity Regulatory Authority (ERA) may conduct competitive tender for large scale non-firm renewables National Energy Policy in development CUC aim for 15 MW renewable 2 MW small distributed, 13 MW utility scale

5 Renewable Energy Initiatives Solicitation for 10 MW wind late 2008 halted by Government The Company went out to the public in August 2011 for 13 MW of alternative energy Overwhelming response CUC has chosen two Renewable Energy developers Term sheet leading to PPA being negotiated Solar photovoltaic and small wind turbines are being considered

6 Feed-In Tariff Feed-in-Tariff in place since Feb 2011 for small scale (100 kw commercial, 20 kw residential) Tariff - Residential US$0.46 per kwh; Commercial US$0.45 per kwh, 20-year term Residential cap on individual renewable energy systems = CUC s estimate of the customer s peak load or 20 kw, whichever is less Commercial cap on individual renewable energy systems = CUC s estimate of the customer s peak load or 100 kw, whichever is less Total renewable energy cap = 2 MW Take-up slow but improving (11 residential, 3 commercial- 121 kw)

7 Fuel Costs

8 Competitive Solicitation 53 Proposals from 31 companies totaling 380 MW of renewable energy options Shortlisted to 20 projects from 9 companies totaling 158 MW: MW of Wind Power from 6 projects; price US$ US$0.28 per kwh MW of Solar photovoltaic from 14 projects; price US$ US$0.29 per kwh

9 Challenges with Structuring Utility needs to have opportunity for financial gain from the project Site selection - best if utility can provide preferred interconnection points Long negotiations may result in changes in corporate strategy for either the IPP or Utility Have draft PPA form part of the solicitation

10 Typical PPA Negotiation Hot Points Limits of liability Performance bonding Liquidated damages for delay or falling below minimum guaranteed energy levels Utility curtailment for grid stability Definition of minimum guaranteed energy Take or pay calculations/definitions

11 Questions and Discussion