With a long-awaited renewable energy integration study “near complete,” Gov. Eloy S. Inos said yesterday that the government is close to awarding a 10-megawatt solar photovoltaic power plant contract with California-based American Capital Energy Co. The study paves the way for investors to work on multimillion renewable energy productions in the CNMI to help lower power costs.
The Commonwealth Utilities Corp. separately told Saipan Tribune yesterday that the findings of the study—which has yet to be finalized—are “very favorable for integrating distributed renewable energy generation.”
Inos said the ACE contract will be awarded “pretty soon.”
ACE will sell power to CUC at 18 cents per kilowatt-hour, which the governor said is much lower than the current cost of over 30 cents to almost 40 cents per KwH.
Inos said ACE won the bid for a 10MW solar power project but “there was a question whether or not the grid will be able to handle it.”
Now that the results of the study show that the current grid can handle certain amounts of alternative energy, the award of contract to ACE can now proceed, he added.
“We need to know the capacity of our grid system—that part is done,” he said.
Alan W. Fletcher, CUC executive director, confirmed yesterday that the KEMA renewable energy integration study is “near complete” but the technical work for it “has been completed.”
“As for the technical aspects, it is very favorable for integrating distributed renewable energy generation. There are provisos attached to those recommendations by size and location,” he said.
But he said the end report still needs to be finalized.
Fletcher said CUC will be meeting with KEMA soon to finalize the report, at which time CUC will be able to discuss its findings.
He also said that CUC “is talking again with American Capital Energy [ACE] on a solar project.”
“ACE is the successful proposer on a past RFP; however, discussions were put on hold until the study is completed. While the technical data in the study has yet to be fully processed by ACE, this information will assist in negotiations and will help determine if a deal can be done, at what price and what terms,” he said.
Inos, meanwhile, said that investors continue to come into the CNMI, wanting to go into the utility business or as independent power producers.
“We’ve been meeting with CUC to speed up the process,” the governor said, so that utility consumers will start seeing a decrease in rates.
The governor added that CUC will be issuing an RFP soon for geothermal energy exploration.
Cost of power
While he remains optimistic, Fletcher said it is important to point out that adding a solar project may not significantly impact rates.
He said intermittent renewable energy projects are not necessarily less expensive than the current supply due to capital costs, financing risk, and base-load requirements.
“That noted, removing an increment of power from the volatility of oil markets should pay out in the long run,” he said.
Fletcher said CUC is constantly looking at efficiencies to help consumers.
He cited as an example a 25-percent increase in engine efficiency in the last few years—“saving over $11 million annually in fuel costs.”
“Also, in order to develop the best energy solutions for the CNMI, CUC will be commissioning an Integrated Resource Plan,” he said.
The IRP is a series of plans and proposals designed to determine what base-load generation and renewable energy opportunities are commercially available and cost-effective.
The focus, according to Fletcher, will be to provide the most cost-efficient new power source for consumers.
CUC is working with the National Renewable Energy Laboratory on the IRP’s design and ultimate procurement.
“Governor Inos has been very supportive in these endeavors and looks forward to results. Of course, the ultimate goal of all this work is to reduce the cost of energy in the power, water, and wastewater utilities for the people of CNMI,” Fletcher added.
CUC is required by law to derive at least 40 percent of its energy from renewable or alternative sources by 2012 but this was not met and even CUC says this is “unrealistic.”
Besides renewable energy investments, the government—through the Department of Public Lands—is also close to selecting a firm that will be allowed to lease public lands in San Antonio and Marpi for the development of new hotels with at least 200 rooms.
“I’m really optimistic. I think tourism is really picking up,” Inos said, referring to record tourist arrivals and hotel occupancy.
The Marianas Visitors Authority reported yesterday that September 2013 visitor arrivals to the CNMI jumped 9 percent compared to September 2012 or from 30,472 to 33,329 visitors.
Fiscal year 2013 visitor arrivals totaled 433,735, an 11-percent increase compared to fiscal year 2012 and returning the NMI to visitor arrival levels last seen a decade ago, MVA said.
The governor said there have also been increased spending and increased economic activities.
Inos also said the government continues to receive inquiries from investors wanting to get involved in video lottery operations as well as electronic gaming and casino gambling on Saipan.
Video lottery operation is now law, the regulations are being finalized, and an RFP will soon be issued for those interested in operating video lottery.
As for the electronic gaming and Saipan casino gaming, Inos said they are not law yet, referring to bills still pending at the Legislature.