Cogeneration Archives - SolarBuzz Jamaica

LNG can be sourced from anywhere – ESET

July 7, 2016 Webmaster

BY AVIA COLLINDER Business reporter collindera@jamaicaobserver.com

LNG is coming to Jamaica

New Fortress Energy, the company which has won the contract to supply the island’s sole power distributor the Jamaica Public Service Company (JPS) with LNG for substations in Bogue, Montego Bay and another to be developed in Old Harbour, St Catherine, said it buys supplies from sources worldwide.

The company has declined to comment whether its suppliers include Trafigura Beheer, from which the Jamaica Observer understands it has sought to make buys.

Meanwhile, the Electricity Sector Enterprise Team (ESET) has indicated to theBusiness Observer that it does not matter where in the world the gas comes from.

Trafigura is the world’s third-largest private oil and metals trader. That company is also seeking to grow its market for LNG supply globally.

However, in 2011 the Dutch company was involved in controversy for a $31-million political donation to the the People’s National Party administration, which was then the governing party.

The company continues to sell supplies through third-party deals to the local market, including spot purchases made by Petrojam.

Describing the surge in LNG demand as an “LNG revolution”, Trafigura says on its wesbite that it plans to double supplies sold year over year from base year 2013 when the company transported one metric tonne (mt) of LNG globally.

The company has three full-time traders based in Geneva supported by its US Natural Gas team in Houston, Texas, and a European Natural Gas team, working with 27 LNG regional offices in key export and import countries across the globe.

However, as to sales programmed for Jamaica, the company said it has no comment.

“We don’t comment on our day-to-day commercial arrangements,” Victoria Dix, media liaison for Trafigura said when asked to channel questions about the Caribbean market, including Jamaica.

Bloomberg describes Trafigura Beheer as the world’s current largest LNG trader, reporting at year end December 2015 that the commodity trader “boosted the amount of LNG handled to 4.2 million metric tonnes in the financial year ended September 30, from 1.7 million a year earlier following a doubling in volumes… that made it the world’s biggest independent LNG trader.”

A source close to New Fortress Energy told the Business Observer that it is normal for ships to swap cargo and there may have been spot purchases, but that there is, however, no long-term relationship with Trafigura.

More directly, the company, through a spokesperson, said it sources LNG from all over the world.

“In addition to supplying our own gas from the United States, New Fortress Energy sources gas from all over the world. As a matter of policy, we cannot comment further,” New Fortress said.

He stated that in relation to Bogue, “we’re making significant progress and are excited to provide natural gas to help further Jamaica’s clean energy transition. We’re in close coordination with JPS on the process and timeline”.

Chairman of ESET Dr Vincent Lawrence told the Business Observer on Monday that the source of LNG was immaterial.

“ESET is not aware of any trades, swaps or short-term source arrangements that New Fortress Energy may make in satisfying its contractual arrangements with JPS.

“NFE under its Gas Supply Agreement arrangements can supply gas from any origin. However, in ESET granting approval of the Gas Supply Agreement between JPS and NFE, in order to ensure security of supply, NFE had to demonstrate as to its long-term ownership of and access to gas from the United States including the ability to obtain any required export permits.”

Lawrence added, “The contractual arrangements are private and between two private companies,” further adding that “the GOJ is not a party to the contractual nor day to day delivery arrangements”.

The island is moving towards the majority use of LNG as fuel for energy, with the aim of reducing dependence on oil which is subject to price volatility.

To that end, JPS has retrofitted its 115MW gas turbine plant in Montego Bay from automotive diesel oil to dual fuel use. The conversion, it was projected, will result in an approximate 40 per cent fuel price reduction.

New Fortress has also secured the supply contract for the JPS’s planned 195MW plant in Old Harbour which is being razed and will be rebuilt and expanded.

Start-up of LNG use at the JPS Bogue plant is due to begin in August, when construction of fuel lines and storage facilities are expected to be completed.

New Fortress is also slated to construct an expandable 100MW, natural, gas-fired, cogeneration plant for alumina producer, Jamalco, replacing a previous plan for a coal-fired alternative

The Observer

News

Red Stripe eyeing cogeneration as energy-saving measure

May 9, 2012 jrobinson

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

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.