RED Stripe is currently evaluating the possibility of establishing a cogeneration plant at its Spanish Town Road brewery, making the beer company the first in the Caribbean to have such a facility. Cogeneration plants became popular in the 1980s as the most efficient system of generating electricity and producing heat.
Unlike the cogeneration system, a typical central station utility plant sees 35 per cent of the energy generated by burning fuel to produce electric power, but 40 to 45 per cent is rejected as “waste” or by-product heat, which is normally dumped. Also, another 20 per cent tends to get lost up the smokestack of the boiler.
RED STRIPE BUILDING
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Ever since oil prices soared in the 1970s, it became imperative for businesses worldwide to find technological solutions to contain rising energy costs, especially in manufacturing industries where typically raw materials comprise of as much as 50 per cent of total costs.
Red Stripe, which was acquired by British drinks giant Diageo, has had to carefully manage its input costs in Jamaica against the background of a contracting ecconomy characterised by a drop in aggregate demand.
Supply Director for Red Stripe, Cedric Blair, said the company had long recognised the benefits to be derived from cogeneration, which is the simultaneous production of electricity and heat. With that system, the heat that may otherwise be wasted in the production of electricity is captured and utilised to produce steam, which may be used for both industrial and domestic purposes.
Utilisation of waste heat in this way also reduces the requirement for cooling water supplies for power generation and eliminates the need for structures such as the cooling towers that dominate the skyline in a conventional power plant.
With a firm focus on reducing energy costs, Red Stripe is contemplating installing a 3 – 5 MW plant at a cost of between US$5 to $7 million with a payback of just 2 to 3 years. Blair said the time frame for completion is 12 months from contract.
“We have to find ways in which we can lower our energy costs, which is close to 12 to 15 per cent of the cost of production,” declared Blair, pointing out that the costs of energy in Trinidad and Tobago is US 5 cents per kWh while it costs Jamaicans close to US40 cents per kwh. He recalled that “in 2005 we were paying 11 to 13 US cents per kWh now it’s 34 to 35 cents US per kWh.”
The high cost of energy, a major input for manufacturers, has not escaped the attention of several local trade bodies including the Jamaica Exporters Association. They continue to lament the wide disparity between energy costs in Jamaica as opposed to what prevails in its fellow Caricom member Trinidad and Tobago.
While cogeneration plants can be effectively used by hotels and industrial production facilities, Blair contends “it is perfect for breweries and can bring many benefits. For instance, it can produce electricity 70 to 80 per cent more efficiently and will cost 11 cents US per kWh… it will provide us with steam and water for cooling our offices.”
Several businesses and insitutions across the world have installed cogeneration plants and are reporting positive results. Assistant Vice- President for Sustainability and Technical Services at New York University, John Bradley, is reported to have said, “Cogeneration in and of itself is a much more efficient process; the cogen plant is really the hub of our sustainability and energy efficient delivery of utilities to the university for the next 40 years.”
So where is Red Stripe looking to source this most strategic asset. “We are looking at Europe, America… we are talking to a number of reputable companies. We have shortlisted three who are capable of designing and building the plant,” Blair said, adding, “we are finalising design and structure”.
In terms of the primary source of fuel for the plant, he said it could be natural gas, diesel or heavy fuel
(bunker seed).
Some cogeneration plants need as much as four
acres of land, and Blair said Red Stripe has ample land space to accommodate such a large plant.
As far as the environmental benefits are concerned, Blair believes that LNG is the best option. He cited a reduction in carbon dioxide emission into the atmosphere as a positive benefit from the cogeneration plant. He went on to say that when operational, it will undergo performance tests to determine the power output and plant heat rate.
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