“In about three years you are going to see degradation in the generating capacity and units are going to start to fail
“In about three years you are going to see degradation in the generating capacity and units are going to start to fail
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.
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:
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.
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 MECHANISM used by the state-owned oil refinery Petrojam to set weekly gas prices has sparked a verbal exchange between Energy Minister Phillip Paulwell and his opposition counterpart Gregory Mair.
This after Mair, in a statement released on Wednesday, criticised Paulwell for, among other things, failing to address what the opposition spokesman asserted was a lack of transparency in Petrojam’s pricing mechanism.
But at a Gleaner Editors’ Forum on Wednesday, the minister revealed that Mair has missed two opportunities to have the process explained to him by Petrojam.
He said, when Mair first raised the concern, he brought it to the attention of the National Energy Council, of which the opposition spokesman is a member, and an emergency meeting was arranged to “fit Mr Mair’s schedule”.
“The first time we put on the table, he said he could not make it. So we shifted everybody and we arranged a special meeting of the energy council where Petrojam gave a detailed presentation on its energy pricing,” he explained.
“Mr Mair did not attend the meeting … I am disappointed with Gregory, because he is now an established member of the Energy Council,” he added.
However, in a swift response, a strident Mair acknowledged missing the meetings, but insisted “I am not the person they should explain it (the pricing mechanism) to, it’s the people of Jamaica.”
“What we want to know is the actual numbers used to arrive at the prices. If there is nothing to hide, why can’t the public know the formula,” he insisted.
Mair criticised the energy minister for failing to act on several issues that could reduce energy costs to Jamaicans.
One of those issues, he noted, was that “to date, there is no transparency in the fuel pricing mechanism used by Petrojam.”
“Any unfair pricing is inevitably a cost to the Jamaican people and not the Government, as it is the consumer that pays for the fuel,” Mair said.
“This is made worse given the fact that the Office of Utility Regulation stated publicly that Petrojam had been overcharging for fuel for electricity generation over an extended period,” he added.
livern.barrett@gleanerjm.com
Energy Minister Phillip Paulwell.
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THE Jamaica Manufacturers’ Association (JMA) said it is “perturbed” that Jamaica could possibly abandon its pursuit of a Liquefied Natural Gas (LNG) deal with Trinidad & Tobago.
In 2004, Trinidad and Jamaica agreed on an arrangement that would have seen the Caribbean neighbour supplying some 1.1 million tonnes of LNG per year into Jamaica, beginning in 2009. However, the deal fell through after Trinidad pulled out, citing the unavailability of the product as a result of existing contractual arrangements and problems over the development of a new gas field they share with Venezuela.
Following reports that Trinidad made a major natural gas discovery off the island’s south-east coast, Energy Minister Phillip Paulwell was questioned in Parliament this week whether Government would step up the pressure on the twin-island republic to honour the LNG agreement. However, Paulwell indicated that discussions with Trinidad had not been very positive and reportedly said that Jamaica could be abandoning the deal as a result.
However, this has peeved the JMA, which noted that it has been advocating for years for the supply of LNG from Trinidad at preferential prices to create a level playing field for Jamaica’s manufacturing sector.
“The supply of LNG from Trinidad was a key strategy in the provision of a cheaper source of energy from the Jamaica Public Service. In light of talks that Jamaica may no longer be pursuing LNG from Trinidad, the JMA is demanding answers from the Government. Is it a done deal?” asked the JMA, noting that the group has been in discussions with three different industry ministers
Petrojam says it is too early to say when the Jamaica Defence Force (JDF) will become involved in its security operations.
The Minister of Energy yesterday told the parliament he is concerned about security at the state-run oil refinery and has spoken to Petrojam
Power provider Jamaica Public Service Company (JPS) currently passes on to its consumers 17 per cent of the costs of its inefficiencies – including illegal extraction of power – valued at billions of dollars, says Energy Minister Phillip Paulwell.
But the Government is determined to have those inefficiencies, including heat losses, decreased even before the liquefied natural gas plant to be constructed by the JPS at Old Harbour, St Catherine becomes operational in two years or so.
“Currently, the JPS passes on 17 per cent of its inefficiency to all of us,” said Paulwell, the minister of science, technology, energy and mining.
“Some of that inefficiency is as a result of theft and we have to solve that problem. There are some discussions now taking place to deal with that,” said the minister addressing an executive breakfast meeting organised by First Global Bank at the GraceKennedy headquarters in Kingston on Friday.
“We believe that there is more that can be done about theft, and when we looked at the data it is not only downtown or my constituency (of East Kingston and Port Royal). We see some substantial numbers uptown and it is not fair. It is immoral for us to be paying for that.”
mcpherse.thompson@gleanerjm.com
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Daraine Luton,
