Renewable energy pursued despite 25-year power deal Inos: Solar contract in the offing, new RFP for geothermal energy By Haidee V. Eugenio Reporter
Despite a 25-year deal to build a 50-megawatt diesel power plant, acting governor Eloy S. Inos said the administration is still pursuing renewable energy development and is in fact poised to award a solar energy contract to American Capital Energy Co. and re-issue a request for proposal for geothermal energy drilling after running into some problems with a proposal earlier received from Australian-based KUTh Energy Ltd.
Inos oversees the administration's renewable energy development efforts.
Sen. Juan Ayuyu (Ind-Rota), chair of the Senate Committee on Public Utilities, Transportation and Communications, said last night that the government has to speed up its alternative energy efforts.
“We have to pursue renewable energy. By law, we should have been relying on 40 percent renewable energy by now. The administration should fast track alternative energy development,” Ayuyu told Saipan Tribune.
He also said that the “questionable” 25-year agreement with Saipan Development LLC, which was granted the exclusive right to develop a diesel-generated electric power plant on Saipan, shouldn't be pursued until a full economic study is done.
Inos said he sees these renewable energy efforts “complementing” CUC's existing power, or the new 50MW power plant by Saipan Development LLC if it moves forward.
He said the government is about to award a 20-year solar energy contract to U.S.-based American Capital Energy Co. This firm's local business partner is Herman Sablan.
Inos said American Capital Energy, as of now, can only go with 10MW of solar power “because putting up the second 10MW could create a lot of problems with the grid.”
Moreover, such solar power operation is not 24 hours, so other types of alternative energy or diesel-generated power plant would still be needed to meet Saipan's power needs.
Inos said under the proposed agreement, American Capital Energy would be charging CUC 18 cents per kilowatt hour. CUC currently charges residential customers over 30 cents per kWh.
“The capital investment is so huge that it may need significant time to recover capital. that 18 cents, that's only when they produce (renewable energy),” Inos added.
The proposed contract also provides for an “escalation cost,” which means it increases by a certain percentage every year.
“The contract is still in the works. it's with the legal team,” he added.
The contract award for Japan-based Saipan Solar System, meanwhile, has been put on hold for technical concerns.
Geothermal energy
Inos said the geothermal energy development “kind of took a detour because we're not satisfied with the proposal to go drilling and on to production.”
“So we kind of scaled it back and we're going to do drilling and exploration. And once we get the data, then we examine the data and maybe at that time we will do an RFP for production. We're going to issue an RFP for the drilling (first),” Inos said in an interview with Saipan Tribune and KSPN 2.
The acting governor said KUTh “was the frontrunner in the original RFP.”
KUTh was to do geothermal drilling exploration, and on to production.
But Inos said they would like to separate the drilling exploration from production.
Inos said the government talked again to KUTh about the plan.
“They're not pleased with that, but it's a work in progress. Our team is supposed to put together something that will communicate this before we even do that. In the meantime, we're planning on putting out the RFP, which was the original RFP, just for drilling. In fact that's the only money we have available (which) is for drilling-$1.2 million from the Interior Department,” he said.
The Interior provided $1.2 million in funding assistance for geothermal exploration and development in the CNMI. CUC then selected KUTh to drill a 600-meter deep geothermal gradient well, which is also known as the Stage 1 geothermal gradient project.
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