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LNG out
Net metering still up in air
Wednesday, July 02, 2008
Energy Minister Clive Mullings has all but dropped liquified natural gas (LNG) off the list of fuel alternatives to oil in Jamaica's energy diversification plan going forward.
Yesterday, in his sectoral debate presentation to parliament, he outlined the major factors which weighed in against the use of LNG in Jamaica, not least of all was the affordability of infrastructure.
"LNG is a possible fuel type but international experience, has shown that for it to be viable there needs to be a demand in excess of 600 megawatts (MW)," asserted the energy minister. "The high cost of infrastructure would require that nearly all the generation capacity of the country be converted at the same time to use LNG. We cannot afford to rely on any one fuel type Mr Speaker. The risk would be too great."
Currently, Jamaica Public Service Company (JPS) and independent power producers have installed capacity of 880MW generated from relatively small scale units, which primarily utilise heavy fuel oil and diesel.
Jamaica's peak demand is 630 MW.
"Fuel diversification is not only to deal with the challenge of high prices but also to guarantee security of supply. In this regard, there is growing concern around the world about the availability of LNG, the high demand and the continuing impact this will have on prices," he continued.
Mullings highlighted the 100 MW petcoke generating plant currently being pursued at Hunt's Bay as a major part of the government's energy diversification strategy.
The state-owned refinery will upgrade its facility to supply the fuel to the plant and the government will own 40 per cent of the new generating plant through a joint venture agreement with JPS.
The signing on the new agreement will take place in a few days.
Mullings outlined coal as another viable option.
"Coal can viably be introduced with small scale units delivering 100 -150 MW of electricity," he said. "This is suitable to the requirements of our power system and the retirement schedule for old inefficient plants."
Bauxite/alumina companies located in Jamaica and power sector players have already indicated their willingness to install coal plants.
The energy minister plans to encourage them to "share in the cost of developing a single coal-receiving facility, which would have the effect of lowering the price at which electricity can be supplied to the grid and for use in their own operations."
"The debate over fuel types has occupied us for upwards of three years, and while we talk the price is skyrocketing. Mr Speaker, we dare not dither any longer. It is time to take action."
The issue of net metering, where JPS customers who generate their own electricity can sell excess power to the grid at equal prices, was left in the air.
Mullings said that the matter needed further examination.
"The customers are saying it is unfair for JPS to pay a rate which is lower than the rate it charges them," Mullings added. "On the other hand Mr Speaker, JPS contends that there has to be a charge for the use and maintenance of its infrastructure. We will have to find a solution that is reasonable to all parties."
The minister plans to propose to the Office of Utilities Regulations (OUR) "that they examine whether the problem may be solved by charging these customers an annual fee as a contribution to the cost of the infrastructure".
LNG out
Net metering still up in air
Wednesday, July 02, 2008
Energy Minister Clive Mullings has all but dropped liquified natural gas (LNG) off the list of fuel alternatives to oil in Jamaica's energy diversification plan going forward.
Yesterday, in his sectoral debate presentation to parliament, he outlined the major factors which weighed in against the use of LNG in Jamaica, not least of all was the affordability of infrastructure.
"LNG is a possible fuel type but international experience, has shown that for it to be viable there needs to be a demand in excess of 600 megawatts (MW)," asserted the energy minister. "The high cost of infrastructure would require that nearly all the generation capacity of the country be converted at the same time to use LNG. We cannot afford to rely on any one fuel type Mr Speaker. The risk would be too great."
Currently, Jamaica Public Service Company (JPS) and independent power producers have installed capacity of 880MW generated from relatively small scale units, which primarily utilise heavy fuel oil and diesel.
Jamaica's peak demand is 630 MW.
"Fuel diversification is not only to deal with the challenge of high prices but also to guarantee security of supply. In this regard, there is growing concern around the world about the availability of LNG, the high demand and the continuing impact this will have on prices," he continued.
Mullings highlighted the 100 MW petcoke generating plant currently being pursued at Hunt's Bay as a major part of the government's energy diversification strategy.
The state-owned refinery will upgrade its facility to supply the fuel to the plant and the government will own 40 per cent of the new generating plant through a joint venture agreement with JPS.
The signing on the new agreement will take place in a few days.
Mullings outlined coal as another viable option.
"Coal can viably be introduced with small scale units delivering 100 -150 MW of electricity," he said. "This is suitable to the requirements of our power system and the retirement schedule for old inefficient plants."
Bauxite/alumina companies located in Jamaica and power sector players have already indicated their willingness to install coal plants.
The energy minister plans to encourage them to "share in the cost of developing a single coal-receiving facility, which would have the effect of lowering the price at which electricity can be supplied to the grid and for use in their own operations."
"The debate over fuel types has occupied us for upwards of three years, and while we talk the price is skyrocketing. Mr Speaker, we dare not dither any longer. It is time to take action."
The issue of net metering, where JPS customers who generate their own electricity can sell excess power to the grid at equal prices, was left in the air.
Mullings said that the matter needed further examination.
"The customers are saying it is unfair for JPS to pay a rate which is lower than the rate it charges them," Mullings added. "On the other hand Mr Speaker, JPS contends that there has to be a charge for the use and maintenance of its infrastructure. We will have to find a solution that is reasonable to all parties."
The minister plans to propose to the Office of Utilities Regulations (OUR) "that they examine whether the problem may be solved by charging these customers an annual fee as a contribution to the cost of the infrastructure".
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