AZUREST Partners and Cambridge Project Development are saying that natural gas electricity generation can happen in Jamaica in little over a year.
The two firms’ joint submission to the Office of Utilities Regulations (OUR) proposes to use natural gas-fired power barges, which can be built within 12 to 15 months after getting the go-ahead from the Government.
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An LNG offshore terminal designed for unloading, storage and regasifying liquefied natural gas. Azurest and Cambridge propose to build power barges that would be fed by small LNG ships.
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What’s more, they believe that they can access liquefied natural gas (LNG) economically, “because we will have our own LNG source in the US Gulf Coast, the cheapest gas source in the world”.
The idea is to directly feed the power barges located in Jamaica from its fleet of smaller LNG supply vessels.
“Our smaller ships, of a scale appropriate to Jamaica, make our LNG transport process economical,” said Kenneth Allen, managing director of Azurest.
Allen said that his proposal allows for a modular approach to building out the generating capacity — each barge can provide 100 megawatts (MW) of capacity — but if allowed to build all of the 400 MW, its LNG-fired plants could save the country US$415 million annually.
“If we are allowed to put in all of our 400 MW of clean LNG high-efficiency generation capacity, then we should be able to reduce the price paid by the Jamaican public by at least 10 US cents (from 40 US cents to about 28 US cents), or about 25 per cent across the whole country,” he said.
Five entities have presented proposals to the OUR in response to its announcement in February that it would review proposals to supply generation capacity.
The OUR aims to advise the Government of the final results of its analysis on Monday.
Jamaica Public Service Company (JPS) also submitted three proposals for consideration by the OUR, according to the power company’s CEO, Kelly Tomblin.
The proposals are for the construction of 360 MW of new generation capacity, using combined cycle technology and a combination of fuel sources: natural gas as primary fuel, with Automotive Diesel Oil (ADO) as backup fuel; natural gas as primary fuel with inlet air cooling power enhancement, and ADO as backup fuel; and Liquefied Petroleum Gas (LPG) as the primary fuel.
However, Wartsila Caribbean, which is the proposed technology provider for three of the bids, including the Cambridge/Azurest joint venture, has said that its reciprocating engines are a good deal more efficient than the combined cycle gas turbines (CCGT) being proposed for use by JPS.
The reciprocating engines could save over US$100 million a year more than the proposed CCGT, according to Wartsila Caribbean Vice-president Rodney George — and that’s even without LNG.
“Bogue is a living example where the CCGT plant has a combined cycle efficiency of only 40 per cent,” said George. “In comparison, the JEP (Jamaica Energy Partners) West Kingston plant with Wartsila reciprocating engines, have a simple cycle efficiency of close to 45 per cent… regardless of what fuel is utilised, be it LNG, LPG, or ADO, the efficiency quotient remains the same.”
Despite suggestions to the contrary, JPS is confident that combined cycle technology is of far greater benefit to the country than other options being considered, such as diesel engine technology, according to the JPS boss.
“While we haven’t seen the other proposals, our information shows that CCGT not only offers lower overall costs through greater efficiency and lower operating and maintenance costs. It is also more environmentally friendly,” Tomblin said. “Although JPS and the GOJ continue to evaluate all potential gas supply options, if the immediate supply options for LNG do not result in the desired reduction in electricity charges, LPG (Liquefied Petroleum Gas) is a great option.
“LPG is more accessible right now and can be easily incorporated in our long-term plans for fuel diversification and price reduction,” she added. “The current prices show LPG providing attractive cost reductions for our customers.”
In the meantime, George proposes that the use of backup liquid fuel such as heavy fuel oil (HFO) is “not far-fetched given the uncertainty of securing LNG or LPG supplies”.
Allen said that if the other bidders aren’t using LNG, “they are probably not the lowest cost solution for the Jamaican electricity consumer”.
Cambridge is a developer of energy and environmental infrastructure projects focused on the Caribbean and has in-house experience successfully developing over US$2 billion in projects in the Caribbean Basin, as well as the long-term management of over 12 independent power plants.
Azurest Partners is a financial advisory and capital-raising firm, where team members have collectively raised over US$900 million in equity and US$2 billion in debt financing for clients in the US, UK and Africa.
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