Why does GRENLEC see renewable energy as the way forward?
· Energy Security
Grenada is almost completely dependent on fossil fuel (diesel) imports for its energy needs (cooking, transportation, reliable electricity generation and manufacturing). Fossil fuel resources are finite and supplies are vulnerable to price volatility, all of which is driven by activities outside of Grenada. By virtue of their availability in Grenada and elsewhere in our region, natural renewable energy resources provide an opportunity for us to diversify our energy mix, reduce our fuel import bill and stabilise fuel prices, a major component of electricity cost.
· Protecting the Environment
While the debate rages about climate change, it is clear that we cannot sustain the impact of fossil fuel dependence on our environment. Fossil fuels give off greenhouse gases when we burn them, while renewable energy sources emit only small amounts of greenhouse gases or none at all. We can reduce these emissions, air pollution and our carbon footprint by increasing the share of renewable energy in our energy generation.
How is GRENLEC demonstrating its commitment to renewable energy?
· Strategic Focus
GRENLEC has set strategic objectives to utilise renewable energy to meet 10% of energy demand by 2013 and 30% by 2016.
· Exploring Resources in Grenada
GRENLEC is assessing a number of mature renewable technologies, such as wind and photovoltaics and emerging technologies like hydrokinetic and waste to energy possibilities.
GRENLEC is finalising plans for a wind farm at Top Hill in Carriacou to provide for approximately 40 percent of the energy demands there. The projected startup for this project is 2012. Through a collaborative effort of the public sector and GRENLEC, Grenada has attracted a European Union grant of €M2.5 for this initiative.
Simultaneously, GRENLEC is continuing to test the viability of two potential sites for wind farms in Grenada. These installations, along with reference test sites at River Antoine and Samaritain are critical to help us assess production estimates and the feasibility of potential wind sites.
o Geothermal Energy
Geothermal electricity has existed for decades and is said to supply electricity for about 30 million people worldwide. Geothermal energy is heat energy from the earth, which is harnessed to generate electricity. It would provide firm capacity and potentially allow Grenada to become more energy independent (reduce Grenada’s dependency on fossil fuel imports). There are indications that this resource may be present in Grenada. However, extensive exploration is needed to determine the adequacy and viability of accessing this resource for energy generation. Our Company is actively engaged with public and private sector stakeholders to develop the framework to facilitate exploration of geothermal energy.
· Customer Interconnections
To provide incentives for customers, in 2007, GRENLEC voluntarily formulated and implemented an interconnection programme, which facilitates connections to GRENLEC’s distribution grid, of customers who generate renewable energy. This is significant because it allows customers to enjoy reliable supply, where they are utilising sources such as solar and wind energy, which are not available all the time.
Between 2007 and 2011, 54 customers have taken advantage of the introductory offer. Having exhausted the 300 KWh offered under the pilot programme, GRENLEC is making a further offer of 500 KWh under a second phase.
What are some of the challenges associated with developing renewable energy initiatives?
Renewable Energy Resources Take Time To DevelopRenewable energy sources must be found and tested to ensure that they can be accessed, that they are available in sufficient quantity, concentration and frequency to meet the demand. When the location of the resource is identified, resource agreements must be worked out and environmental impact assessments must be conducted to guide development of the technology.
In the case of wind, testing has to be done over a period of years and with geothermal, drilling of several test wells may be necessary.
Some Customers May Find Renewable Energy Technology Costly
Although it has come down, the start-up cost of renewable energy technology may be costly for some customers. To create incentives, in some countries, governments provide subsidies and/or companies establish renewable energy programmes, the cost of which may be borne by other customers or the renewable energy customers.
In Grenada, where solar photovoltaic systems are being sold by a private company, the Government of Grenada provides some tax incentives for renewable energy imports.
In addition, GRENLEC continues to voluntarily give up revenue of half million dollars annually to facilitate connections to its grid of the 54 customers who signed up as part of the pilot phase of our renewable energy interconnection programme.
Renewable Energy Technologies Are Capital-Intensive
At present, renewable energy plants are costly to explore, build and operate; consequently, they do not automatically result in cheaper energy costs. To create incentives, in some countries, governments provide subsidies and companies employ renewable energy programmes, the cost of which is borne by other customers.
Some Renewable Resources Do Not Provide Firm CapacityWind, solar power and other intermittent sources, in contrast to geothermal sources, do not produce energy all the time. Customers utilising these systems rely heavily on a connection to the maintenance of GRENLEC’s diesel generating plant and transmission and distribution systems for consistent, reliable energy supply.
Renewable Resources Are Often Geographically Remote
The best renewable resources are often available in remote areas, so transporting the equipment and building transmission lines to deliver power may require extensive infrastructural development.
How does Phase 2 of the Interconnection Programme work?· Customer sells all power generated and buys all power needed· Customer earns money· Price offered to customer based on average of avoided fuel cost· Customer’s System is Incompleteo Needs storageo Needs other grid services · Cost of grid services recovered by GRENLEC How is the price determined?
The price offered to customers selling power to GRENLEC will be based upon an annual average of avoided fuel cost (fuel GRENLEC avoids burning), with a fixed ten-year option and a variable option.
o $0.45/KWh over 10 years
o Customer gets a guaranteed rate of return
o GRENLEC assumes fuel price risk
o Less risk for customer
o May be easier to secure financing
o Average of avoided fuel cost adjusted annually
o GRENLEC and customer share risk associated with changing fuel costs.
Why is the price offered to renewable energy customers different from the price charged for usage?
The price charged for electricity is a combination of fuel, grid service and other operational costs. The price offered to customers who generate electricity using renewable energy sources is based on fuel costs only.The price offered to customers who sign-up under the variable option is an average of fuel cost over the 12 months of the previous year.Secondly, the fuel charge that customers pay on a monthly basis is representative of a three-month rolling average.
How does GRENLEC’s programme compare to that of other regional utilities? (Data updated September 2011)
|Pilot Start Date||2008||September 2011||2009||2007|
|Metering Configuration||Net billing (2 versions)||Net billing||Net metering||Pilot - Net metering & net billing Phase 2 – Net billing|
Why has GRENLEC developed the second phase of this programme in this particular way?As the regional leader in customer interconnection, GRENLEC has experience of how the programme works. While the Company is prepared to facilitate interconnections, up to its technical limit, the programme must be sustainable for customers and GRENLEC.During the pilot phase, GRENLEC subsidised customers at an annual cost of half million dollars in forfeited revenue. The experience of the pilot phase demonstrated that other models are not sustainable indefinitely. In some regions of the world, other customers pay to subsidise renewable energy customers or they are subsidised through various public or special interest programmes. Some renewable energy customers may opt to pay more because of their environmental interests. In our context, increasing customer costs is not an option.An interconnection programme needs to be fair (considering impact to customers and GRENLEC), equitable (same for all customers) and sustainable (can be expanded up to its technical limit).
Is every renewable customer required to connect to GRENLEC’s grid?
Domestic customers can opt to utilise standalone systems. Many customers prefer to connect to the grid to ensure reliability when their system is not producing or in the event of a system failure.
What energy savings should I expect?
Savings from such systems will depend on a number of factors, including system size, usage patterns, availability of renewable energy resources and system availability and cost. Currently, photovoltaic systems (PV) are more costly than some other technologies. Significantly, there is a downward trend in cost as technologies improve.
Will my monthly bill show the total energy produced by my renewable energy system?
Each month, GRENLEC will read the meters and generate a bill for customers’ usage. Periodically, the Company will generate a statement and cheque for the power sold to GRENLEC. Customers will retain the ability to track both usage and generation on meters installed at their premises.
What are the incentives for customers to sign-on to this initiative?
One major reason is to ensure reliability for intermittent renewable energy systems and in the event of equipment failure.Customers also want to take advantage of the opportunity to earn revenue by sell power to GRENLEC and others want to decrease Grenada’s carbon footprint by contributing cleaner power to the distribution system.