Net-Metering  comes to Costa Rica Welcome all to a brand new era of renewable energy in the country.

This new era is the result of significant changes in energy policy by the Chinchilla government, which has set its targets high and committed itself to achieving the combined benefits of economic security, energy security, carbon neutrality, protection of biodiversity, and increased job creation and economic recovery.

 

Not surprisingly, all these objectives are served by promoting renewable energy generation and thus reducing our dependence upon imported oil to generate electricity!	por Jim Ryan ASI Power jim@asipower.com www.ASIPower.com

 Most dramatically, ICE (The National Electricity Institute) has introduced its long awaited “Pilot Program for Net-metering”. This is very good news for consumers who wish to invest in generating their own electrical power.

This voluntary program is a huge step forward in the government’s implementation of policies promoting renewable energy, specifically  ‘small-scale’ generation for residential, commercial, industrial and agricultural customers. Let’s review the past, present and future of these policies, and most importantly, what they mean to you. 

Past:  We all know about ICE´s reputation  as the glacially paced monopoly provider of mediocre service (electricity, phone, Internet) and staunch defender of status quo (i.e. no competition, no innovation, seemingly little planning effort for the future requirements of consumer’s or  society’s critical needs for robust energy and communications infrastructure).

That description is increasingly inaccurate, and must become part of the past!

Present: A handful of forward thinking managers in the lumbering monopoly have found new spirit with the change of government and a president committed to action, not just words, regarding the protection of our environment and our nation’s economic security; an economy which has become increasingly petroleum dependent at a time when the entire world recognizes the perils of oil dependency.

Doña Laura made the environment a cornerstone of her election campaign, and once in office she created a ‘dream team’ of public officials to shake off the institutional cobwebs and actually bring CHANGE.

The daunting challenge of introducing policy change is now the responsibility of the team comprised of Dr. Alfio Piva (1st VP and former Executive Director of the INBio),  Ing. Teófilo de la Torre (Minister of MINAET and former CEO of ICE during three president’s administrations, including the last time that  ICE was 100% renewable energy powered!), as well as newly appointed CEO’s at RECOPE,  ICE and ARESEP.

Change, however, does not come easy to Costa Rican institutions, and merely appointing new CEO’s does not ensure a policy shift.

There are, however, some very positive developments to point out, including:

- The new legislation exonerating renewable energy equipment(solar, wind, hydro, etc) from ALL import duties and taxes, even from the sacrosanct 13% sales tax! 

- The introduction of ICE’s Pilot Program for Net-metering.

- The public acknowledgment that the 200 MW Garabito oil plant was a planning blunder.

- The introduction of a revised version of the new General Electricity Law, and true engagement with the Assemblea in enacting new energy legislation. (This Law includes the right for all Costa Rican consumers to connect their private generation to the grid, i.e. not just ICE consumers).

But the principle accomplishment we wish to describe today is ICE’s “Net-metering Pilot Program”, which can impact hundreds of homes and businesses and the environment in a positive way.  ICE, with support from MINAET, launched this significant new Program to stimulate consumer’s investment in small-scale renewable energy generation.  

This Project is extremely important because for the first time ICE is inviting customers who invest in small-scale, distributed generation to connect their generation directly to the ICE distribution network.

This is a tremendous step forward for consumers hoping to reduce their carbon footprint while taking more control of their own energy generation and security. (To appreciate the magnitude of this change, consider that up till now ICE has penalized consumers who install solar or wind generation while connected to the grid).

All ICE-served residential, commercial, industrial or agricultural sector consumers can participate. Participants must install clean power generation at their property  (solar, wind, biomass, biogas, etc.) after which ICE will replace the consumer’s regular meter with a ‘bi-directional’ meter. This new meter will record both the imported (purchased) power as well as the exported (banked kWh credits) and it will ‘net’ the two against each other for the monthly billing period. For example, if a household consumes500 kWh in a month, but their solar panels generate 350 kWh in the same period, then the consumer’s electricity bill will be for the ‘net’ amount of 150 kWh. Because of the progressive pricing structure of electricity tariffs, ie the more you consume the higher the price tier, by generating 350 kWh’s the consumer has managed to reduce their consumption so that all their purchased power (150 kWh) is in the lowest price tier.

 

Similarly, if the family were to generate more energy than they consume, for instance their wind turbine in January produced 600 kWh’s, but they consumed only 350 kWh, they would then carry the extra energy (250 kWh)forward to the next month’s billing period as a kWh credit. The consumer is essentially using the utility network as a ‘virtual battery’, where they can store and draw energy as they generate or consume it.

The entire program is limited in size to 5 MW (ie the equivalent of 5 million Watts of capacity), and one MW (roughly enough for 100 to 150 large homes) is reserved exclusively for residential consumers.

ICE has indicated that once the program approaches its 5 MW capacity, that they expect to raise the capacity ceiling rather than deny further participants entry.

However, this is not certain, and meanwhile it is a ‘first come-first served’ program.

 

The main terms of the Net-metering Pilot Project are as follows:   -  Open to all consumers on the ICE network (other distributors still resist this ‘democratization’ of electricity generation).   -  Applications are accepted on a ‘first come, first served’ basis.   -  Consumers can install systems up to the minimum of their annual electric consumption, or to their grid inter-connection’s capacity.   -  Two year Program (before it´s expiration we expect ICE and the government to announce even better programs to reward consumers to invest in renewable energy).   -  Fifteen year contracts – assuring participants time to recuperate their investments.   -  All ‘grid-connected’ technologies must meet ICE and ARESEP guidelines and satisfy UL and IEEE safety standards.   -  Two separate application and approval processes are established. One is a ‘stream-lined’ process for quickly processing residential and small business applications for systems at 10 kW or less in size. A more complex application and inspection process exists for larger scale projects.   -  Most importantly, consumers who ‘auto-generate’ can both import (purchase) and export (store) power on the utility’s network for later use. This is the fundamental concept of net-metering.

The Future:As more and more Costa Ricans purchase renewable generation systems the costs will gradually decline. Meanwhile, electricity prices increase, including ICE’s recent request for a 5.39% rate hike in February, and there are signs that the steady upward tariff price trend continues.

 

Eventually we will see the following developments occurring:

-  ARESEP introducing regulations making grid-connection and net-metering benefits available for all consumers regardless of which utility company serves them

-  MINAET, ARESEP & ICE introducing ‘Feed-In’ tariffs, i.e. offering incentive payments to consumers who invest in renewable generation which is purposely oversized in order to export power to the grid. This is also known as ‘Distributed Generation’.

-  ARESEP forcing distributors (besides CNFL) to introduce ToU (Time of Use) electricity tariffs that offer consumers incentives to conserve power and to shift their peak demands to off-peak periods.

- Manufacturing of solar panels here in Costa Rica to satisfy the local market and for export to Central and South America. (Presently there are a very small number of manufacturers in South America).

-  The introduction of ‘Smart Grid’ technologies to gain efficiencies from the national transmission and distribution grids, as well as to make them more robust and better able to accept renewable energy sources. (Smart Grid is something Costa Rica is uniquely positioned to implement, as our monopoly ICE controls both the power grid and the communications grid, and Smart Grid technologies are essentially the process of marrying those two (normally disparate)systems together.  

-  The introduction of ‘Smart Grid’ technologies to gain efficiencies from the national transmission and distribution grids, as well as to make them more robust and better able to accept renewable energy sources. Smart Grid is something Costa Rica is uniquely positioned to implement, as our monopoly ICE controls both the power grid and the communications grid, and Smart Grid technologies are essentially the process of marrying those two (normally disparate)systems together.

-  The Smart Grid will introduce monitoring equipment to homes, which allow consumers to see their usage and expenditures in real-time, and allow them to better manage their energy usage, i.e. to conserve.

What can you do now? 

As a consumer of electricity, start by investigating the options the government is making available. If ICE does not serve you, contact your local distribution company and demand that they introduce the same net-metering program in your area.

ICE has invited all distributors and cooperatives to join the Pilot Program, but these companies are reluctant to do so. They see allowing their consumers to net-metering as sacrificing electricity sales and revenue.

These companies need to be reminded by their consumers of their fundamental duty to provide the public a less costly, environmentally efficient and reliable service. Hopefully they will decide to join the ‘future’ before required to by new legislation.  

It is high time for these policy changes supporting small-scale renewable energy! The president supports it, the Minister of MINAET supports it, the general population supports it, and ICE very clearly supports it!  Now we need our regulators at ARESEP, our Diputados in the Asamblea and we urgently need our distribution companies/cooperatives to join the party!

 

The future of energy generation must consist of large, medium and many small generators using our abundant natural resources to produce our energy efficiently, and when possible, locally (i.e. at our homes, businesses, factories and farms).

This is the future!

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