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Cayman Islands power provider considers

switching from diesel to gas

POLICY CARIBBEAN Utilities Co. (CUC), the national whether a change of fuels might reduce carbon
power provider of the Cayman Islands, is report- dioxide emissions while also lowering consum-
edly considering switching from diesel to natural ers’ electricity bills.
gas – more specifically, regasified LNG – as its CUC has acknowledged that gas markets
main fuel for electricity generation. pose their own risks, noting that gas prices were
According to a recent article from Cayman fairly turbulent in 2021 and made a sudden LNG prices have
Compass, CUC is taking this step because it has upward leap last October, Cayman Compass
seen the fuel cost element of the rate it charges said. The utility has also pointed out, though, generally tended
customers more than double since the beginning that LNG prices have generally tended to be less
of last year. The figure has risen from $0.076 per volatile than prices for crude oil and petroleum to be less volatile
kWh of electricity in January 2021 to $0.13 per derivatives. If this historical trend reasserts itself,
kWh in December 2021 and had reached $0.154 the utility believes, then a switch to gas has the than prices
per kWh as of mid-February, the news service potential to bring down the fuel cost element of for crude oil
reported. electricity rates and reduce consumers’ power
The increase is not surprising, as it reflects the bills. and petroleum
upward swing in world crude oil prices. Between Thus far, CUC has not talked about how it
the start of 2021 and the beginning of this week, might take delivery of the gas. Presumably it derivatives.
West Texas Intermediate (WTI) prices have is considering a small-scale import solution
soared from about $47 per barrel to more than along the lines of other projects planned in the
$93 per barrel. region.
Nevertheless, the higher prices have come One such facility is slated for construction by
at a time when concerns about the environ- WEB Aruba, the national water and power pro-
mental impact of petroleum products have led vider of Aruba, and US-based Eagle LNG Part-
many other utilities to consider switching to gas. ners at the site of an existing oil refinery in San
As such, representatives of CUC have been in Nicolas. WEB Aruba has indicated that it will use
discussions with officials from the Utility Reg- regasified LNG as fuel for the Balashi thermal
ulation and Competition Office (OfReg) of the power plant (TPP). The cost of building the gas
Cayman Islands for the purpose of exploring import facility is expected to reach $100mn.™

P12 www. NEWSBASE .com Week 08 25•February•2022