The Office of Utilities Regulation (OUR) has halted the scheduled implementation of electricity wheeling to allow the Jamaica Public Service Company Limited (JPS) to make an application to the Electricity Appeal Tribunal.

This means that the OUR will not begin to process applications for wheeling this month, as was scheduled.

A statement from the OUR today said the JPS requested that the regulator put a stop the process, pending the hearing of its appeal.

The grounds of appeal have not been revealed.

In return for the OUR

The Office of Utilities Regulation (OUR) has halted the scheduled implementation of electricity wheeling to allow the Jamaica Public Service Company Limited (JPS) to make an application to the Electricity Appeal Tribunal.

This means that the OUR will not begin to process applications for wheeling this month, as was scheduled.

A statement from the OUR today said the JPS requested that the regulator put a stop the process, pending the hearing of its appeal.

The grounds of appeal have not been revealed.

In return for the OUR

THE electicity grid is so vulnerable to system shutdowns that its deficiencies and weaknesses could be viewed, in some instances, as an ‘accident waiting to happen’.

The factors leading to the last islandwide blackout, not related to a natural disaster, was found to be “typical of those which precipitated the three earlier system shutdowns, including the first major incident in 2006”, by the Office of the Utilities Regulations (OUR) investigation committee into electricity grid shutdown last August.

“While the initiating circumstances are different in each case, the underlying sequence of system collapse from generators and transmission circuits tripping follow a familiar and parallel path,” said the Jamaica Public Service Company (JPS) Power System Integrity Investigation report, which was completed three weeks ago. “Human error and maintenance shortcomings have played a part, as well as manifested deficiencies in the islandwide grid and generation infrastructure.”

Last August, lightning strikes at a pole located on the Duhaney to Naggo Head 69kilovolt (kV) transmission line, as Tropical Storm Ernesto passed nearby the island, led to a shutdown.

But it was the lack of a protection relay, which apparently malfunctioned or was removed from the system the April before, which was “primarily blamed for precipitating the subsequent island-wide system collapse.

Similarly, in 2006, the failure of distance relays to operate at Duncans substation following a lightning strike to the Duncans to Bogue 138kV transmission line caused a system-wide shutdown.

In 2008, a fault on the Duhaney to Tredegar 38kV transmission line wasn’t cleared, after a pole fell to the ground.

The 2006 system shutdown was reviewed by Gowlings Consulting Incorporated and Rusnov Associates Limited, whose recommendations were complied with, in the main.

But the OUR technical staff believes that the most recent episode showed that where a “crucial protection relay was not repaired or replaced for some four months at Duhaney substation, that the intent of this system is not being achieved”.

Either way, the Duhaney substation is considered to be a “major weak link in the transmission grid integrity” because it serves as the only link between generators in the Corporate Area with the generating plants in Old Harbour and Bogue, St James.

“Any failure on either the 138kV, or in particular the 69kV, is likely to precipitate an islandwide System shutdown,” said the report.

The technical team found that the protective relaying system for the Duhaney substation was urgently in need of a complete review.

Also, “the 10 substations reported as not having SCADA visibility need to be put on the system as soon as possible”.

The SCADA (Supervisory Control And Data Acquisition) system allows control engineers to remotely monitor and control the power system, and JPS has 53 substations in all.

“The current philosophy for grid restoration, based on JPS documented policy and operating instructions currently in place, appears satisfactory to adequately address system restoration procedures following a partial or complete shutdown of the system,” wrote the review committee.

However, the system restoration policy appears not to include a provision for a full analysis of the shutdown to be undertaken by technically competent personnel prior to grid restoration activities, in specific instances when the reason for the System shutdown is in doubt. It is recommended that the policy be revised to include analysis by technical personnel.

The committee did find the general system protection philosophy, which governs the basis of JPS’s installation of protective relays at generating stations and also at substations for busbars, transformers and transmission line protection, to be “generally adequate and meets international standards for reliable utility operation”.

“Nevertheless, it is recognised that the human factor plays an important role in the effectiveness of maintenance, together with the dedication to detail and a process of rigid management follow-up on defects is an issue of considerable concern,” said the report. “Indeed, recent system shutdowns have highlighted this problem and JPS needs to urgently remedy the human factor in order to prevent a repeat occurrence.”

In light of the frequency of total system shutdown events in the Jamaican power system (four in since 2006), the committee also recommends that the OUR considers the establishment of an on-going Grid Reliability Committee (GRC) as an added means of addressing issues impacting the reliability and security of the power system.

The group would meet regularly to identify items which currently threaten or could threaten grid integrity and ensure expediting of agreed remedies.

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THE electicity grid is so vulnerable to system shutdowns that its deficiencies and weaknesses could be viewed, in some instances, as an ‘accident waiting to happen’.

The factors leading to the last islandwide blackout, not related to a natural disaster, was found to be “typical of those which precipitated the three earlier system shutdowns, including the first major incident in 2006”, by the Office of the Utilities Regulations (OUR) investigation committee into electricity grid shutdown last August.

“While the initiating circumstances are different in each case, the underlying sequence of system collapse from generators and transmission circuits tripping follow a familiar and parallel path,” said the Jamaica Public Service Company (JPS) Power System Integrity Investigation report, which was completed three weeks ago. “Human error and maintenance shortcomings have played a part, as well as manifested deficiencies in the islandwide grid and generation infrastructure.”

Last August, lightning strikes at a pole located on the Duhaney to Naggo Head 69kilovolt (kV) transmission line, as Tropical Storm Ernesto passed nearby the island, led to a shutdown.

But it was the lack of a protection relay, which apparently malfunctioned or was removed from the system the April before, which was “primarily blamed for precipitating the subsequent island-wide system collapse.

Similarly, in 2006, the failure of distance relays to operate at Duncans substation following a lightning strike to the Duncans to Bogue 138kV transmission line caused a system-wide shutdown.

In 2008, a fault on the Duhaney to Tredegar 38kV transmission line wasn’t cleared, after a pole fell to the ground.

The 2006 system shutdown was reviewed by Gowlings Consulting Incorporated and Rusnov Associates Limited, whose recommendations were complied with, in the main.

But the OUR technical staff believes that the most recent episode showed that where a “crucial protection relay was not repaired or replaced for some four months at Duhaney substation, that the intent of this system is not being achieved”.

Either way, the Duhaney substation is considered to be a “major weak link in the transmission grid integrity” because it serves as the only link between generators in the Corporate Area with the generating plants in Old Harbour and Bogue, St James.

“Any failure on either the 138kV, or in particular the 69kV, is likely to precipitate an islandwide System shutdown,” said the report.

The technical team found that the protective relaying system for the Duhaney substation was urgently in need of a complete review.

Also, “the 10 substations reported as not having SCADA visibility need to be put on the system as soon as possible”.

The SCADA (Supervisory Control And Data Acquisition) system allows control engineers to remotely monitor and control the power system, and JPS has 53 substations in all.

“The current philosophy for grid restoration, based on JPS documented policy and operating instructions currently in place, appears satisfactory to adequately address system restoration procedures following a partial or complete shutdown of the system,” wrote the review committee.

However, the system restoration policy appears not to include a provision for a full analysis of the shutdown to be undertaken by technically competent personnel prior to grid restoration activities, in specific instances when the reason for the System shutdown is in doubt. It is recommended that the policy be revised to include analysis by technical personnel.

The committee did find the general system protection philosophy, which governs the basis of JPS’s installation of protective relays at generating stations and also at substations for busbars, transformers and transmission line protection, to be “generally adequate and meets international standards for reliable utility operation”.

“Nevertheless, it is recognised that the human factor plays an important role in the effectiveness of maintenance, together with the dedication to detail and a process of rigid management follow-up on defects is an issue of considerable concern,” said the report. “Indeed, recent system shutdowns have highlighted this problem and JPS needs to urgently remedy the human factor in order to prevent a repeat occurrence.”

In light of the frequency of total system shutdown events in the Jamaican power system (four in since 2006), the committee also recommends that the OUR considers the establishment of an on-going Grid Reliability Committee (GRC) as an added means of addressing issues impacting the reliability and security of the power system.

The group would meet regularly to identify items which currently threaten or could threaten grid integrity and ensure expediting of agreed remedies.

Read more:

Jamaica Energy Partners (JEP) has added its new 66 megawatt (MW) power plant at West Kingston to the national grid. Conduit Capital Partners, the US-based parent of JEP and a private equity investment firm focused on energy in the region, said it began “commercial operations of (its) West Kingston Power Project in Jamaica”, yesterday.

The new plant is expected to reduce the overall amount of energy lost to heat by the numerous generators that supply the power grid by a little more than 0.5 per cent.

The new Jamaica Energy Partners plant will produce 66 megawatts of power for the capital.

But Kingston will still have to import some 60 MW from other regions as the number of plants operating in the capital city fall short of the 340 MW peak demand.

JEP’s third plant to come into operations brings the independent power provider’s capacity up to 190 MW, and Kingston’s installed generation to 286 MW.

Plans on JPS’s drawing table include the construction of a US$475-million, 100-megawatt petcoke fuel plant at Hunts Bay, Kingston. But that is part of the second phase of a liquefied natural gas (LNG) project, which will first see JPS build a US$600-million, 360-MW plant in Old Harbour, St Catherine, running to 2014.

JEP broke ground on the US$126-million West Kingston power plant in December 2010. The new system is powered by engines that can run on natural gas, but will start operations using heavy fuel oil.

Jamaica is still a way off from using natural gas, having just last week announced the preferred bidder — Samsung C&T — to build a Floating LNG regasification and storage facility.

The West Kingston plant will sell energy under a 20-year power purchase agreement with Jamaica Public Service Company, the national utility. It is expected to create 60 permanent jobs, and was financed by the World Bank’s International Finance Corporation.

Conduit reacquired Jamaica Energy Partners and the right to develop the West Kingston Power Project through the firm’s Latin Power III Fund in mid-2009

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ENERGY and Mining Minister Phillip Paulwell will be travelling to Japan and South Korea this year to discuss liberalisation of the national power grid with the major overseas shareholders in the Jamaica Public Service (JPS).

Speaking in the sectoral debate in the House of Representatives on Tuesday, Paulwell said that he will be travelling to South Korea this week to meet with executives of East West Power, and in the latter part of the year he will visit Japan to meet with the other major shareholder, Marubeni to assess options for liberalising the grid.

He said that he expects “constructive dialogue, cooperation and understanding” from his trips, based on the knowledge that the Japanese Government is exploring similar transmission and distribution of electricity options, while South Korea has some experience in this area.

“Let us face the fact that to fundamentally restructure our energy market we must, as a matter of urgency, take steps to liberalise the transmission and distribution of electricity, to bring down costs to the consumer,” the minister said.

He pointed out that Jamaica has been operating a vertically integrated system, in which the bulk of the generation, systems control, transmission and distribution are controlled by the same entity, the JPS.

He noted that while the JPS has a monopoly on transmission and distribution, the market for generating electricity is liberalised under a single-buyer model: The JPS purchases some 200 megawatts from independent power producers (IPPs) under long-term power purchase agreements (PPAs).

“… As a consequence, while liberalisation in generation has allowed some level of participation and competition in the sector, IPPs are required to negotiate a PPA with the utility which, in Jamaica’s case, happens to be the very company they compete with,” Paulwell told the House.

He said that an example of the “market contortion” was that in the recent procurement process for a new 360 megawatt power plant, JPS established a wholly owned subsidiary which was the sole bidder and winner of the bid.

“This new JPS subsidiary will then proceed to negotiate a power purchase agreement with itself. This underscores the urgency with which we must proceed to restructure the energy market and introduce greater transparency and competition,” Paulwell said.

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Minister of Science, Technology, Energy and Mining Phillip Paulwell has vowed to abolish the ‘avoided costs’ system used to compute and compensate independent power providers (IPP) supplying electricity to the national grid as an incentive for renewable-energy producers.

The alternative will be a feed-in-tariff mechanism, designed to accelerate investment in renewable-energy technologies and, unlike the avoided costs system, offer cost-based compensation, price certainty and long-term contracts that can help to finance investments.

Paulwell said that for years, when IPPs entered into purchasing agreements with the Jamaica Public Service Company (JPS), they are told that the price JPS will pay them must be related to the avoided costs, “which is a theoretical concept based on what is assumed to be the least cost of an additional unit of electricity to the grid.”

“That to me does not provide the incentive and the framework to encourage people to get into the business,” said Paulwell, at the launch of an energy cost containment initiative rolled out by Jamaica Broilers Group at one of its contractors’ poultry rearing facilities at Atkins Farm, Four Paths, Clarendon, last Wednesday.

To treat with the issue, “we recently conducted a consultancy through the World Bank and we are about to promulgate a feed-in-tariff mechanism that will reward people based on the actual costs of the technology that is being deployed. And we are going to abolish this issue of avoided costs so that we can properly incentivise those of you who wish to get involved,” the minister added.

According to a declaration by the Office of Utilities Regulation (OUR) dated December 2010, “avoided costs for the JPS electric grid can be defined as the costs to the electric utility of energy or capacity or both, but for the purchase from the qualifying facility(s), the utility would generate itself or purchase from other sources.”

Avoided costs in electricity generation and distribution refer to the cost the JPS escapes by purchasing electricity for resale from other parties instead of building a new plant. It consists of generation fixed costs or capacity costs, and generation variable costs or energy costs.

The OUR said the avoided costs considered in making the declaration are generation fixed costs, which include capital costs for new generation capacity to be installed over the planning period, depreciation of the investment and the fixed operation and maintenance costs for those facilities. Variable costs include fuel costs and variable operation and maintenance costs.

Paulwell told poultry farmers and business people that another issue “we are going to insist on for this year is the ability of businesses to establish generation in one location and to be able to wheel that to another location utilising the grid.”

Emphasising the need for Jamaica to diversify its energy sources, the minister said he intends, very shortly, to present to the country a schema in relation to how the Government will get the price of energy significantly reduced, as well as outcomes in relation to the liquefied natural gas project.

Paulwell said he will again be speaking to the use of coal as an alternative source of fuel, but wanted to “ensure and assure our environmentalists that we are not going to do anything that is going to, in any way, be reckless and careless in how we implement that project.”

The minister, who has installed solar panels – obtained from Cuba – at his home in St Andrew, said the Jamaican Government was also trying to secure a technical agreement with Cuba to train Jamaicans into assembling the panels here.

“I don’t believe it has to be a government project. I want to challenge the private sector to step forward and see how we can manufacture panels in Jamaica” with a view to exporting to other areas in the region “if we can manufacture enough,” he said.

mcpherse.thompson@gleanerjm.com

http://jamaica-gleaner.com/gleaner/20120715/business/business8.html