Another piece of the plan to see the US Virgin Islands (USVI) unhitched from costly and volatile fossil energy was slotted into place this week. It was announced that Toshiba was breaking ground on a 4MW capacity solar PV plant on St. Crois, the largest island in the US dependency. That is the (nominal) equivalent to 8% of the USVI peak electricity demand.
It follows the signing of a Power Purchase Agreement with the local utility, Virgin Islands Water and Power Authority (WAPA). That will see Toshiba provide electricity to WAPA on a fixed-escalator price,over a 20 year contract, with rates starting at $US 0.155/kWh. With retail rates currently around $US 0.34/kWh (and at one time reaching $US 0.50/kWh in 2008), there's presumably much scope for lower retail rates for USVI residents.
And the utility has indicated as much, promising a 'reduction in the fuel surcharge paid by all WAPA customers'. That's combined, of course, with a useful reduction in greenhouse gas emissions. As much as a 60% reduction in fossil fuel use, by 2025, is the ultimate aim. So winners all round? Not necessarily.
First, under the current Net Metering arrangement, any excess energy generated by the DG customer is zeroed out at the end of each electricity billing year. And second, the caps placed on Net Metering customers - less than a quarter of the capacity of the 4MW plant Toshiba is available - will likely be hit within 2 years. That doesn't leave much room for DG in the mix.
So, for the moment, while the fossil fuels may be on the way out, many islanders are wondering if the dinosaur will be left in charge?