Dr Horace Chang says if given the green light from the utilities regulators, the National Water Commission (NWC) could generate even more power than the Jamaica Public Service (JPS).

Chang, who has responsibility for water in the Ministry of Economic Growth and Job Creation, said that currently the NWC’s biggest expense is its electricity bill, which averages around $450 million monthly.

“Of course, if the water supply company is allowed to generate its own power without any kind of guidance or regulation, we could end up producing more power than JPS. If we have hydropower, we can produce so much; we have lands we can produce solar power and not only remove ourselves from the grid in terms of supply sources,” Dr Chang argued.

He was addressing the final day of the three-day 14th Annual Conference of the Organisation of Utility Regulators last Friday, held at Secrets Resort and Spa in Montego Bay, St James.

He called on the utility regulators to examine the relationship between utilities.

“Can exception be made [in] how you do it and in what way it is done that it doesn’t end up superseding the other? That’s maybe the biggest question,” Dr Chang said. “Regulators have to create the framework in which the company itself can move forward; the broader policy of ownership is decided by the Government.”

The water minister explained that under the current arrangement, if the NWC or the National Irrigation Commission were to “produce power for itself and reuse it”, they would have to first be awarded a licence by the Office of Utilities Regulations.

“Under the current regulator, if you produce power, move it from one venue to the next, you need a licence. And if you are doing a licence, it has to be competitively awarded and that creates challenges,” he argued.

“Certainly, I think we can produce power on site, which we intend to do in a couple of our local outlets, but that raises some challenges.”

Another challenge he highlighted was wheeling, which refers to the scheduling of the energy transfer from one balancing authority to another. Since the wheeling of electric energy requires use of a transmission system, there is often an associated fee which goes to the transmission owners.

“The challenge here is not only wheeling for commercial purposes [and] home users, but since a water company can produce water in large amounts, the question of wheeling within the head of the utility becomes relevant. It is something that needs to be addressed,” Dr Chang said.

“The real impact of water is, it also has a social impact, but it has to be produced at an economical rate. And power becomes one of the big cost factors. For irrigation, in fact, we might not be able to provide our southern plain — which is our major provider of food supply — with irrigated water if we don’t have the right to produce some of the power for ourselves, because farmers cannot afford to pay the JPS bills.”

Jamaica Observer

Consulting engineer Howard Chin is making the case for the Alpart plant, which was recently acquired by Chinese firm Jiuquan Iron and Steel Company Ltd (JISCO), to be operated entirely using renewable energy.

JISCO has announced plans to invest US$2 billion to expand the plant which will see the addition of an aluminium smelter powered by a coal-fired plant.

Chin has, however, argued that the heat that would be generated from the coal-fired plant could be detrimental to aquatic, plant and animal life in and around the Black River area, and as such, renewable-energy sources should be considered.

“Cooling the power plant and running the bauxite refinery requires a lot of water. How hot would the Black River become downstream of Alpart? Hot enough to kill animal life? Certainly, NEPA (National Environment and Planning Agency) is not answering these questions which have to be answered. Nor do they have the technical capability to do so,” Chin said in an emailed response to The Gleaner.

STORAGE POWER PLANT

In recognition of the problem of storage capacity associated with renewables, Chin explained that a large pumped hydroelectric storage power plant could be used to power the alumina plant in the first instance.

“It could be done using a large renewable energy system backed up by a pumped storage system,” he said.

Pumped hydroelectric storage facilities store energy in the form of water in an upper reservoir, pumped from another reservoir at a lower elevation. During periods of high electricity demand, power is generated by releasing the stored water through turbines in the same manner as a conventional hydropower station. During periods of low demand, the upper reservoir is recharged by using lower-cost electricity from the grid to pump the water back to the upper reservoir.

Turning his attention to the Bayer Process, which would be used to produce aluminium should the Chinese go ahead with plans to build a smelter at Alpart, Chin observed that the heat given off could be transferred to the alumina refinery, which requires it in large quantities. According to the former Jamaica Institution of Engineers president, the smelter could also be powered by renewable energy.

“The alumina refinery needs a lot of heat. The aluminium smelter needs electricity and ends up giving off a lot of heat. Frankly, it might be possible to run the combined alumina and aluminium refining plant on a mostly very large renewable-energy system and a very large pumped storage system, and moving the heat from where it is produced to where it is needed,” he said.

Gleaner

Jamaica Private Power Company (JPPC) saw its loss position double in 2015.

Its parent, Kenon Holdings, reported US$2 million ($234 million) net loss for last year compared with US$1 million the year before.

The private power producer, which sells electricity to all-island distributor, Jamaica Public Service Company (JPS), managed to increase its revenue by four per cent from year-earlier levels to US$45 million in 2015.

This was mainly due to the company increasing its electricity generation from 425 gigawatt hours, or 10 per cent of total national grid’s needs, to 445 GWh, of which well over 90 per cent was sold, likely because it has one of the most efficient fossil fuel, or thermal plants in Jamaica.

JPS’ system uses a dispatch application that determines the best combination of operating levels for each plant supplying the grid to ensure that energy is provided at the lowest total cost to the consumer.

Last year, JPPC improved the efficiency at its 60 megawatt plant, lowering the heat rate from 8,306 Btu/kWh in 2014 to 7,989 Btu/kWh in 2015.

In other words, it increased the amount of the energy stored in the heavy fuel oil (HFO) that was converted into electricity from 41 per cent to 43 per cent. That is, it used two percentage points more of the HFO’s energy to make electricity.

This helped the Rockfort, Kingston-based power producer lower its average fuel cost from US$137 per MWh to US$69 per MWh, albeit a dramatic fall in oil prices contributed more to this improvement. Average sales price, therefore, fell from US$182 per MWh (or J$20 a kWh) in 2014 to US$101 per MWh (or J$12 a kWh).

Indeed, the company’s earnings before interest, tax, depreciation and amortisation (EBITDA) improved from US$1 million to US$2 million, but this would not have been enough to cover staff cost, debt servicing and depreciation.

JPPC is the smallest of the power producers that use fossil fuel-based plants. Jamaica Energy Partners and its sister company West Kingston Power Plant, combined, generates about 30 per cent of Jamaica’s electricity requirements. JPS produces over 50 per cent.

Some six per cent of the country’s electrical energy is derived from hydro and wind, with another three to four percentage points expected to come from 78MW of wind and solar scheduled for commissioning by next year.

The Jamaica Public Service Company, JPS, says preparatory work has started on the construction of the second Maggotty Hydroelectric Power Plant.

The plant is expected to add six megawatts to the national grid upon completion in November next year.

A statement from the power company says 30 jobs have so far been created with this number expected to increase as the project continues.

JPS has committed US$33 million to the building of the new plant