12th World Wind Energy Conference & Renewable Energy Exhibition WWEC2013 will be held from 3rd
Shakuntala Makhijani , Guest Columnist
By Shakuntala Makhijani , Guest Columnist
Last month, electricity regulator, the Office of Utilities Regulation (OUR), released recommendations for Jamaica‘s anticipated electricity wheeling programme.
Electricity wheeling has been proposed in Jamaica as a way to promote distributed power generation, especially from renewable-energy sources.
Under the proposed wheeling programme, a company or individual could generate electricity in one part of the country and pay the grid operator – the Jamaica Public Service Company (JPS) – a fee to transport that power to another location where it will be used.
Because JPS currently has a monopoly on electricity distribution, a company would only be able to send electricity over the grid to be consumed at a location that it also owns. For example, a sugar company that generates electricity at a sugar refinery using bagasse can send excess power to its offices in Kingston to avoid paying high electricity bills there, but cannot sell electricity to another entity.
Several of Jamaica’s large energy consumers are considering participating in the forthcoming wheeling programme to support investments in renewable energy.
Hotel chain Sandals, the Caribbean’s largest poultry producer Jamaica Broilers, and the National Water Commission, the largest single electricity consumer in the country, all have plans to wheel power.
A National Irrigation Commission project using wind energy to power irrigation pumps also wants to participate in the programme.
Only for firm generation capacity
At a recent public consultation, however, OUR officials confirmed that the electricity wheeling programme will be intended only for firm generation capacity – meaning it will exclude variable renewable-energy sources such as solar and wind.
Electricity wheeling provides an opportunity to promote distributed renewable generation, especially at the large commercial or industrial scale (more than 100 kilowatts to several megawatts).
For this reason, Worldwatch has submitted a public comment to OUR recommending, based on our research in renewable energy transition in Jamaica, that the regulator reconsider its exclusion of variable capacity and open the electricity wheeling programme to all renewable-energy sources.
Prime Minister Portia Simpson Miller‘s administration has publicly committed to the ambitious goal of 30 per cent renewable energy by 2030. In our view, the Jamaican government has every reason to ensure that Jamaica can meet these targets by allowing all renewable-energy sources to participate in programmes, such as electricity wheeling.
For its own economic development, Jamaica’s Government would be well advised to mandate that the utilities regulation office and the national utility continue and expand ongoing efforts to strengthen Jamaica’s national electricity grid in order to accommodate new, variable renewable generation in accordance with national targets.
In the meantime, however, Jamaica’s electricity generation mix is dominated by diesel and fuel oil – and planned liquefied natural gas capacity – which can be rapidly fired up or down in response to variable renewable generation and changes in electricity demand.
So long as JPS and OUR undertake precautions to address grid congestion, voltage regulation, and other issues associated with distributed generation, Jamaica’s grid should be capable of integrating variable renewable capacity through the wheeling programme.
Commercial and industrial-scale renewable electricity generation is a cost-effective way to meet the Jamaican Government’s renewable energy targets.
Fees should be an incentive
Electricity wheeling should, therefore, include variable-generation capacity in order to promote development of solar and wind-energy technologies at this scale.
For this to be successful, it is critical that regulators assure that fees are reasonable enough to insure that distributed generators will have an incentive to participate in the programme.
Guidance from the regulatory office is also needed to clarify eligibility criteria for a single entity under the wheeling programme. For example, if the Sandals resort chain participates in a wheeling programme, why should it not be allowed to send electricity generated at one resort to another? However, each resort in the Sandals chain is registered as a separate entity, creating uncertainty as to whether such use of the wheeling system would be permitted.
Resolving this issue before electricity wheeling guidelines are finalised will help avoid potential delays and allow ready projects to be implemented on schedule.
As Jamaica’s electricity regulator, it is the responsibility of the utility regulatory office to ensure that the national electricity grid is prepared to accommodate the new renewable electricity capacity – both firm and variable – needed to meet the Government’s 30 per cent target.
Given the high cost of the current petroleum-based electricity system and the country’s strong renewable-energy resources, Jamaica can transition to a secure and reliable renewable-energy system while still reducing electricity costs for consumers.
The Worldwatch Institute is currently finalising a Sustainable Electricity Roadmap for Jamaica that details Jamaica’s abundant renewable energy potential and recommends grid integration and policy solutions for reliably harnessing these resources to help achieve the country’s long-term sustainable energy goals.
Shakuntala Makhijani is a representative of Worldwatch Institute, which is currently working on sustainable energy roadmaps for the Dominican Republic, Haiti, and Jamaica. mkonold@worldwatch.org business@gleanerjm.com
Prospective investors flooded the 115MW project meeting hosted by the Office of Utilities Regulation, on Thursday, January 17, 2013, at The Jamaica Pegasus hotel in New Kingston.-CONTRIBUTED
Steven Jackson, Business Reporter
This article was originally published online on Friday, January 18, 2013.
Prospective investors complained about parking millions of US dollars as a security deposit via the government regulator Office of Utilities Regulation (OUR) for bidding on 115 megawatts (MW) of clean energy projects.
They also want safeguards against monopoly distributor Jamaica Public Service Company effectively underbidding them in applying for these projects – as it already controls the grid.
JPS is one of 85 entities which submitted expressions of interest for the 115-megawatt renewable projects. Proposals must be submitted by April.
The OUR noted the financial concerns while indicating that investors can use it as a JPS intermediary.
Over 200 prospective investors – one-quarter foreigners – attended an OUR meeting at The Knutsford Court Hotel in Kingston Thursday. The turnout “pleasantly surprised” OUR representatives.
It indicated the financial interest in renewable energy that forms part of the Government’s 2030 vision to reduce the island’s costly dependence on fossil fuels.
But one participant, general manager Wigton Wind Farm, Earl Barrett, complained of an additional financial burden requiring developers to put up at least 20 per cent of the financing of the project, which obviates full financing by banks.
Responding to the concerns, Peter Johnson, OUR manager of utility monitoring and generating procurement, said: “We want some commitment from the developers themselves. We do not want them to be just a conduit. That is the idea. We want some commitment from the developer.”
“It is not unreasonable,” added Courtney Francis, senior regulator of engineering at the OUR.
Leo Williams, seeking to represent bidders, said inter-connection with JPS would pose another hurdle in seeking financing for projects.
JPS can charge a higher fee to rivals to connect to the grid and a lower charge to itself, said Williams and other participants.
“The question of JPS and the level playing is one of which I hope you have heard. The concern expressed relates to the inter-connection costs to the (bidders) which are totally uncapped from the JPS side. So JPS could indicate all types of requirements which could drive the inter-connection costs up for the (bidder),” said Williams, who then asked in vain for the regulator to provide some indicative empirical costings.
“That would be rather difficult. We cannot give a per-unit cost because it depends on the technology, configuration, depends on where you are accessing the system from, the size, and a whole raft of things. It’s hard to quantify such costs,” Francis responded.
Industry players negotiate interconnection based on a minimum rate set by the OUR.
Renowned lawyer Frank Phipps queried the fairness of the inter-connection arrangement and whether in previous bids, rivals won over JPS bids.
“There have been previous applications where the JPS won and others in which others have won,” stated Johnson, who later added: “Please be reminded that there are already other independent power providers on the system and interconnection was a part of those arrangements. We have not seen or heard of concerns by those persons. So we are not aware of a foundation for these concerns at this time,” said Johnson.
Finally, Johnson sought to allay fears: “If you have difficulty dealing with the operator (JPS), we recommend that you submit queries to us.”
Two Petroleum Corporation of Jamaica representatives asked why not allocate a maximum slot for JPS to bid and offer the remainder to other players.
“We do not want suboptimal solutions. So we do not want to set aside anything without knowing it will generate least cost,” said Francis. “JPS has equal opportunity to bid and to participate as any other bidder.”
Bidders must submit a refundable security deposit equivalent to one per cent of the total proposed cost. They must also submit a non-refundable fee of US$8,000.
The security deposit can be sent to the OUR in the form of a cheque or a letter of credit. It can be held for up to a year, reasoned participants. Additionally, the OUR told the
Prospective investors flooded the 115MW project meeting hosted by the Office of Utilities Regulation, on Thursday, January 17, 2013, at The Jamaica Pegasus hotel in New Kingston.-CONTRIBUTED
Steven Jackson, Business Reporter
This article was originally published online on Friday, January 18, 2013.
Prospective investors complained about parking millions of US dollars as a security deposit via the government regulator Office of Utilities Regulation (OUR) for bidding on 115 megawatts (MW) of clean energy projects.
They also want safeguards against monopoly distributor Jamaica Public Service Company effectively underbidding them in applying for these projects – as it already controls the grid.
JPS is one of 85 entities which submitted expressions of interest for the 115-megawatt renewable projects. Proposals must be submitted by April.
The OUR noted the financial concerns while indicating that investors can use it as a JPS intermediary.
Over 200 prospective investors – one-quarter foreigners – attended an OUR meeting at The Knutsford Court Hotel in Kingston Thursday. The turnout “pleasantly surprised” OUR representatives.
It indicated the financial interest in renewable energy that forms part of the Government’s 2030 vision to reduce the island’s costly dependence on fossil fuels.
But one participant, general manager Wigton Wind Farm, Earl Barrett, complained of an additional financial burden requiring developers to put up at least 20 per cent of the financing of the project, which obviates full financing by banks.
Responding to the concerns, Peter Johnson, OUR manager of utility monitoring and generating procurement, said: “We want some commitment from the developers themselves. We do not want them to be just a conduit. That is the idea. We want some commitment from the developer.”
“It is not unreasonable,” added Courtney Francis, senior regulator of engineering at the OUR.
Leo Williams, seeking to represent bidders, said inter-connection with JPS would pose another hurdle in seeking financing for projects.
JPS can charge a higher fee to rivals to connect to the grid and a lower charge to itself, said Williams and other participants.
“The question of JPS and the level playing is one of which I hope you have heard. The concern expressed relates to the inter-connection costs to the (bidders) which are totally uncapped from the JPS side. So JPS could indicate all types of requirements which could drive the inter-connection costs up for the (bidder),” said Williams, who then asked in vain for the regulator to provide some indicative empirical costings.
“That would be rather difficult. We cannot give a per-unit cost because it depends on the technology, configuration, depends on where you are accessing the system from, the size, and a whole raft of things. It’s hard to quantify such costs,” Francis responded.
Industry players negotiate interconnection based on a minimum rate set by the OUR.
Renowned lawyer Frank Phipps queried the fairness of the inter-connection arrangement and whether in previous bids, rivals won over JPS bids.
“There have been previous applications where the JPS won and others in which others have won,” stated Johnson, who later added: “Please be reminded that there are already other independent power providers on the system and interconnection was a part of those arrangements. We have not seen or heard of concerns by those persons. So we are not aware of a foundation for these concerns at this time,” said Johnson.
Finally, Johnson sought to allay fears: “If you have difficulty dealing with the operator (JPS), we recommend that you submit queries to us.”
Two Petroleum Corporation of Jamaica representatives asked why not allocate a maximum slot for JPS to bid and offer the remainder to other players.
“We do not want suboptimal solutions. So we do not want to set aside anything without knowing it will generate least cost,” said Francis. “JPS has equal opportunity to bid and to participate as any other bidder.”
Bidders must submit a refundable security deposit equivalent to one per cent of the total proposed cost. They must also submit a non-refundable fee of US$8,000.
The security deposit can be sent to the OUR in the form of a cheque or a letter of credit. It can be held for up to a year, reasoned participants. Additionally, the OUR told the
Steven Jackson, Business Reporter
Economic windfalls are expected as wind operators seek to increase their supply of energy to the electricity grid to seven per cent from the current 2.5 per cent in the near term, saving more than J$1 billion annually in oil imports.
That is according to Dr Mario Anderson, group managing director, Petroleum Corporation of Jamaica (PCJ).
The PCJ-operated Wigton Windfarm in Manchester produced enough energy to save the country more than US$5.3 million (J$493 million) on oil imports during fiscal year 2011/12 or 47 per cent more year on year, due to its own expansion.
Dr Anderson said there are plans to generate a further 24 megawatts of wind power.
Another alternative energy supplier, Clean Alternative Energy Limited (CAEL), also plans to construct a 24 megawatt facility. That facility, to be based in Manchester, would raise the nation’s wind energy output by some 60 per cent.
CAEL directors include Wesley McLeod, businessman; Christopher Townsend, attorney; and Roger Williams, quantity surveyor.
“CAEL is estimated to save Jamaica US$4 million per year in fuel import costs annually, as approximately 40,183 barrels of oil equivalent will be saved per year in imports at an average price of US$100,” said the company in an environmental impact assessment report to the National Environment and Planning Agency.
The combined saving from Wigton and CAEL, however, would save only a fraction of Jamaicas annual oil bill, which hit US$2.4 billion in 2011. But the economic savings are augmented by the environmental benefits.
Wigton accumulated nearly 76,000 units of tradable carbon credits or certified emission reductions (CERs) in fiscal year ending 2012, equivalent to some US$375,000 based on estimates of existing rates.
Wigton earned some 52,000 CER units a year earlier. Carbon credits are worth about US$5 per tonne or unit.
CAEL said that its facility slated for Great Valley, Manchester would draw visitors to the area.
“The installation of the wind farm at Great Valley may lead to an increase in visitors to the area. There will likely be school trips as well as visits by persons who are interested in viewing the installation. The company said.
This may lead to increased commercial activity in the nearby towns. The Wigton farm located less than five kilometres from the proposed Great Valley wind-farm is said to receive thousands of visitors annually, it added.
CAEL plans to employ 100 persons during the nine to 12-month construction period but the cost of developing the wind-farm has not been disclosed.
Up to last year, the PCJ held the exclusive right to exploit and develop renewable resources in Jamaica.
In October 2012, the Government of Jamaica rescinded the PCJ’s exclusivity, which in effect liberalised the renewable energy sector.
steven.jackson@gleanerjm.com
Read more:
Paul Mullings’ picture that ‘speaks volumes’ about an islandwide blackout. – Contributed
Gary Spaulding, Senior Gleaner WriterEnergy Minister Phillip Paulwell has admitted that the country could return to a period of frequent power outages if steps to replace the ageing and inefficient Jamaica Public Service Company (JPS) generators are not done by 2015.
“In about three years you are going to see degradation in the generating capacity and units are going to start to fail
Paul Mullings’ picture that ‘speaks volumes’ about an islandwide blackout. – Contributed
Gary Spaulding, Senior Gleaner WriterEnergy Minister Phillip Paulwell has admitted that the country could return to a period of frequent power outages if steps to replace the ageing and inefficient Jamaica Public Service Company (JPS) generators are not done by 2015.
“In about three years you are going to see degradation in the generating capacity and units are going to start to fail
Phillip Paulwell, Minister of Mining, Energy and ICT
Arthur Hall, Senior News Editor
After a decade of expensive flirting and the expenditure of some US$4 million, the Government has finally ended its attempt at introducing liquefied natural gas (LNG) as the solution to the country’s high electricity prices.
Energy Minister Phillip Paulwell last week blamed the unavailability of the supply of LNG at reasonable prices as the reason for the reversal of a decision which had found favour with successive administrations over the past decade.
“Last year, in the middle of all that we were doing, I went to Angola to try to find gas. I recently went to Nigeria. I have been trying to find gas that makes sense,” Paulwell told a Gleaner Editors’ Forum as he noted that the original source for the gas, Trinidad and Tobago, has now officially been abandoned.
“2010 with Exmar would have been the best time to pursue an LNG deal. At that time, the market situation was right, Exmar had a number of projects going so they could benefit from the volume.
“Since then, the price of LNG has gone up, largely due to the demand out of Asia,” said Paulwell as he noted that the price of LNG has more than doubled since the Exmar agreement was abandoned.
According to Paulwell, he always favoured coal over LNG and had made a recommendation to that effect to the Cabinet shortly before the People’s National Party was voted out of power in 2006.
Mullings favoured coal
Clive Mullings, who replaced Paulwell as energy minister in the Jamaica Labour Party administration, also favoured coal and is believed to have lost his place in the Bruce Golding-led Cabinet because he bucked his colleagues who agreed that LNG was the way forward.
With Paulwell now done with LNG, coal will be in the fuel mix but gas remains highly favoured as the main alternative source of energy for the Jamaica Public Service Company (JPS).
“I am not going CLG (compressed liquid gas) and I’m not going LNG,” Paulwell told the Gleaner editors even as he refused to say exactly what would be the option.
Instead, the energy minister said major discussions are slated for tomorrow which could determine how quickly Jamaican consumers will get cheaper electricity.
He said officials of the JPS, the major players in the bauxite industry, the Government and an international investor are to meet in Kingston in an attempt to iron out an agreement.
“If that agreement is reached, the natural gas project is on,” said Paulwell as he refused to provide any further details on what he described as sensitive negotiations which have been taking place over the last two months.
Close to recommendation
Paulwell declared that after all the discussions and negotiations which took place last year, he is close to being in a position to recommend a firm position to the Cabinet.
He said if there is no agreement out of tomorrow’s meeting, his backup plan will include the introduction of interim solutions of small generation facilities, including renewables while moving towards the introduction of coal.
“Coal won’t come for about four years, even though the Chinese have said they could bring it in two years,” said Paulwell who is adamant that the price of electricity to the Jamaican consumer must move to between 15 and 18 US cents per kilowatt-hour (c/kWh) instead of the present 40-41 US c/kWh
Paulwell had previously announced that the JPS would be introducing LNG at its soon-to-be constructed 360-megawatt plant in Old Harbour, St Catherine.
“The Government of Jamaica decided it was no longer going to be the procurer for gas and it put the ball back in the court of the company that received the licence but it did not mean we would be sitting ideally by, so we have been very engaged in the process,” said Paulwell.
While admitting that it will not be his call if the JPS accepts the gas project now on the table, Paulwell said he would be urging the parties to find common ground when they meet tomorrow as this could lead to lower electricity prices at the earliest time.
- Paulwell’s 3-step plan for cheaper electricity
Energy Minister Phillip Paulwell is staking his political career on cutting the cost of electricity to Jamaicans by more than 50 per cent.
Last week, during a Gleaner forum, Paulwell listed the steps he plans to take to ensure that electricity from the Jamaica Public Service Company (JPS) becomes much cheaper over the next three to four years.
1. Fuel diversification
Plan:
Phillip Paulwell, Minister of Mining, Energy and ICT
Arthur Hall, Senior News Editor
After a decade of expensive flirting and the expenditure of some US$4 million, the Government has finally ended its attempt at introducing liquefied natural gas (LNG) as the solution to the country’s high electricity prices.
Energy Minister Phillip Paulwell last week blamed the unavailability of the supply of LNG at reasonable prices as the reason for the reversal of a decision which had found favour with successive administrations over the past decade.
“Last year, in the middle of all that we were doing, I went to Angola to try to find gas. I recently went to Nigeria. I have been trying to find gas that makes sense,” Paulwell told a Gleaner Editors’ Forum as he noted that the original source for the gas, Trinidad and Tobago, has now officially been abandoned.
“2010 with Exmar would have been the best time to pursue an LNG deal. At that time, the market situation was right, Exmar had a number of projects going so they could benefit from the volume.
“Since then, the price of LNG has gone up, largely due to the demand out of Asia,” said Paulwell as he noted that the price of LNG has more than doubled since the Exmar agreement was abandoned.
According to Paulwell, he always favoured coal over LNG and had made a recommendation to that effect to the Cabinet shortly before the People’s National Party was voted out of power in 2006.
Mullings favoured coal
Clive Mullings, who replaced Paulwell as energy minister in the Jamaica Labour Party administration, also favoured coal and is believed to have lost his place in the Bruce Golding-led Cabinet because he bucked his colleagues who agreed that LNG was the way forward.
With Paulwell now done with LNG, coal will be in the fuel mix but gas remains highly favoured as the main alternative source of energy for the Jamaica Public Service Company (JPS).
“I am not going CLG (compressed liquid gas) and I’m not going LNG,” Paulwell told the Gleaner editors even as he refused to say exactly what would be the option.
Instead, the energy minister said major discussions are slated for tomorrow which could determine how quickly Jamaican consumers will get cheaper electricity.
He said officials of the JPS, the major players in the bauxite industry, the Government and an international investor are to meet in Kingston in an attempt to iron out an agreement.
“If that agreement is reached, the natural gas project is on,” said Paulwell as he refused to provide any further details on what he described as sensitive negotiations which have been taking place over the last two months.
Close to recommendation
Paulwell declared that after all the discussions and negotiations which took place last year, he is close to being in a position to recommend a firm position to the Cabinet.
He said if there is no agreement out of tomorrow’s meeting, his backup plan will include the introduction of interim solutions of small generation facilities, including renewables while moving towards the introduction of coal.
“Coal won’t come for about four years, even though the Chinese have said they could bring it in two years,” said Paulwell who is adamant that the price of electricity to the Jamaican consumer must move to between 15 and 18 US cents per kilowatt-hour (c/kWh) instead of the present 40-41 US c/kWh
Paulwell had previously announced that the JPS would be introducing LNG at its soon-to-be constructed 360-megawatt plant in Old Harbour, St Catherine.
“The Government of Jamaica decided it was no longer going to be the procurer for gas and it put the ball back in the court of the company that received the licence but it did not mean we would be sitting ideally by, so we have been very engaged in the process,” said Paulwell.
While admitting that it will not be his call if the JPS accepts the gas project now on the table, Paulwell said he would be urging the parties to find common ground when they meet tomorrow as this could lead to lower electricity prices at the earliest time.
- Paulwell’s 3-step plan for cheaper electricity
Energy Minister Phillip Paulwell is staking his political career on cutting the cost of electricity to Jamaicans by more than 50 per cent.
Last week, during a Gleaner forum, Paulwell listed the steps he plans to take to ensure that electricity from the Jamaica Public Service Company (JPS) becomes much cheaper over the next three to four years.
1. Fuel diversification
Plan:
THE Government is implementing a street light energy saving initiative, with the commencement of a pilot project, to be undertaken in three parishes over the next six months.
The initiative, being jointly implemented by the Ministry of Local Government and Community Development, and the United States-based technology and engineering solutions firm, Green Energy RG LLC, is aimed at significantly reducing the cost to the budget to maintain the country’s approximately 93,000 street lights, which totals upwards of $2 billion per annum.