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News

More power for Kingston

August 2, 2012

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

Read more:

News

Samsung Snags LNG Project

July 25, 2012

Phillip Paulwell, minister of science, technology, energy and mining.
Phillip Paulwell, minister of science, technology, energy and mining.

New cellphone, fibre-optic licence for auction

Philip Paulwell, minister of science, technology, energy and mining, said Tuesday that South Korean company Samsung has emerged the preferred bidder to develop Jamaica‘s liquefied natural gas (LNG) infrastructure.

He otherwise announced that Jamaica will auction off a new cellular phone licence and a fibre-optic licence, which will add increased competition in the telecoms market.

Speaking in Parliament, Paulwell told lawmakers that the LNG committee would now begin negotiations with Samsung, which beat out companies such as Exmar Marine of Belgium and Sener Ingenieria y Sisternas, SA of Spain for the job to develop the floating storage regasification unit.

Under the commercial structure formulated by Government, LNG gas will be funnelled through the LNG infrastructure, which will comprise a terminal and pipelines for distribution to end users, such as the Jamaica Public Service Company’s 360-megawatt plant.

Paulwell said that bidders for the supply of LNG have asked Government for a fortnight’s extension to Friday, July 27, which was granted based on a recommendation from the LNG committee now headed by Dr Carlton Davis.

“In terms of the LNG supply RFP (request for proposal), the Jamaica LNG project team received requests from all three short-listed LNG supply bidders for an extension of the original bid submission deadline,” he said.

The bids were originally due by July 17.

The introduction of LNG forms a key element of the Government’s effort to drive economic growth via slashing electricity costs, currently among the highest in the region. The submissions for the LNG terminal were due by Friday, April 27, 2012 and the final second-stage proposals for LNG supply was originally targeted for closure by the end of June 2012.

The initial demand for LNG is approximately 0.8 million tonnes of LNG per year, with future demand projected at 2.5 million tonnes per year by the end of the decade, according to Government. It is expected that the importation of LNG will serve to spur economic growth in industries across the island that would benefit from the availability of natural gas and lower energy prices.

The Cabinet, in March 2012, approved the formation of the Jamaica Gas Trust (JGT), which will act as the sole LNG purchaser for the project. It will be capitalised with US$100 million and managed by the private sector. The JGT will execute the major commercial agreements, including the LNG Sale & Purchase Agreement, Terminal Use Agreement, Gas Sales Agreements and Pipeline Transportation Agreement.

Part of the hold-up of the LNG project has been uncertainty over supplies of gas. Last week, Jamaica’s Ministry of Industry, Investment and Commerce issued a statement saying Trinidad had signalled it was committed to resolving the issue of supply.

Turning to the telecoms sector, Paulwell stated that the Government would auction spectrum to facilitate the introduction of new cellphone services.

“Mr Speaker, we intend to allocate one licence for the 700 spectrum by auction, for which there will be a reserve price. We will also attach to that award a new international fibre-optic cable licence,” said Paulwell.

He explained that the allocation of the 700-megahertz (MHz) band will provide a more cost-effective option for the deployment of 4G and Long-Term Evolution (LTE) networks in Jamaica. He said that 4G has the capacity to deliver data rates of up to 100 megabits per second (Mbits/s) of download, and up to 70 Mbits/s upload, which enables video application on the downlink as well as uplink.

“This will allow video-sharing, surveillance, conferencing and streaming in higher definition than is possible with existing 3G technologies,” the minister said.

business@gleanerjm.com

http://jamaica-gleaner.com/gleaner/20120725/business/business1.html

JPS News

Concerns Raised Over JPS LNG Plant

May 21, 2012

At least one expert has serious concerns about the Jamaica Public Service Company Ltd’s (JPS) plans to build the country’s first liquefied natural gas (LNG)-fired plant at a cost of J$52 billion in St Catherine. The 360-megawatt plant is touted to reduce the country’s electricity bill by 30 per cent.

Denzil Williams, head of the Department of Management Studies at the University of the West Indies, Mona campus, said he was not convinced this was the right move because if it backfires, it could cost Jamaica dearly.

Serious issues to consider

“If we get LNG going and if we build this plant, then we can see some savings in our electricity bill but, when you go into the details of it, you recognise that it is not just about building the plant, but there are some more serious issues we have to consider,” he noted.

Speaking during a public forum on ‘The Budget, The Debt, The Future’ hosted by Jamaicans United for Sustainable Development at the Department of Management Studies at the University of the West Indies last Thursday, Williams said there were some critical questions that needed to be considered.

“What if LNG does not come to Jamaica? What if there is a disruption in the supply of LNG? What is the backup fuel if LNG fails?” he asked.

He said at this stage, there was no clear indication if these things were considered by the relevant authorities and if an effective backup plan was in place.

“If we do not secure that source of LNG and get it over on this part of the shores and they have to use that combine cycle gas turbine plant to power electricity later on, we will be in a more dangerous position than before. Because we will be using a much more expensive backup fuel, as the combine cycle gas turbines can only use automotive diesel oil,” said Williams.

He said the Office of Utilities Regulation should publicly address these concerns.

http://jamaica-gleaner.com/gleaner/20120521/lead/lead4.html

JPS News

JPS CEO Throws Down Gauntlet

May 19, 2012

Kelly Tomblin, new CEO of the Jamaica Public Service Company, was appointed at the start of April. - Rudolph Brown/Photographer

If the Jamaican government wants to break the monopoly on electricity distribution, the best way to do it is to buy out the majority owners of Jamaica Public Service Company Limited (JPS), the utility’s new CEO said Tuesday.

Concurrently, the power utility announced preliminary plans to build a US$475-million 100-megawatt petcoke fuel plant as the second phase of its liquefied natural gas (LNG) project. These projects fall under its five-year US$1.5-billion capital expenditure programme.

Liberalisation without a buy-out would send negative signals to foreign investors, JPS CEO Kelly Tomblin said in a speech to a Jamaica Chamber of Commerce (JCC) meeting in New Kingston.

JPS is owned 40 per cent by Marubeni Corporation, 40 per cent by Korea East-West Power and 19.9 per cent by the Government of Jamaica. The other 0.1 per cent is held by individuals.

“Basically, the government can buy it back from us and then they can liberalise it, and we are certainly open to that. We do not want to stand in the way,” Tomblin said.

JPS’s current exclusive licence has another 16-year run to 2027.

Tomblin’s comments are in response to energy minister Phillip Paulwell’s stated policy goal of liberalising the distribution of power to customers. Paulwell has not said how he plans to execute the strategy.

Currently, some 30 per cent of Jamaica’s 820-megawatt capacity comes from independent power producers which compete to set up generation units to sell power to JPS. They, however, cannot sell power directly to customers and Tomblin advised Government to avoid breaching the JPS contract.

“I do think it would signal a lack of contract certainty and a lack of regulatory certainty,” she told the JCC. “And as the minister, I wouldn’t want to signal that to the international community.”

Higher electricity bills

The cash-strapped Government has little capacity to buy out Marubeni and East-West Power’s stake in JPS.

The utility is one of the largest companies in Jamaica, with total assets valuing US$1.05 billion (J$91 billion). JPS had a net worth of US$371 million (J$32 billion) as at December 2011.

Government wants to liberalise the sector to reduce the cost of electricity to consumers and businesses, but Tomblin argued that it would lead, instead, to higher power bills.

“It is so counter to what I have experienced in the US markets. We used to be small utilities broken down, and we found no economies of scale with workers, with systems or with technology. Then we saw those smaller distribution companies getting larger economies of scale by coming together and getting bigger and bigger,” she said.

Joint undertaking

It was not immediately clear whether the petcoke plant is a redraft of a project announced four years ago as a joint undertaking of JPS and state-owned oil refinery Petrojam Limited. That project was billed as a US$300-million investment to be finalised in 2012, but it never got off the ground.

The new US$475-million petcoke plant will be pursued after JPS finalises the US$614-million LNG plant.

“We believe it makes good sense in the second phase of the project,” Tomblin said.

The company will also spend US$143 million on upgrading its transmission and distribution lines; US$89 million to reduce system losses, including power theft; and US$73 million on renewables.

http://jamaica-gleaner.com/gleaner/20120516/business/business1.html

 

News

JPS: LNG still the best option to oil

May 9, 2012

THE Jamaica Public Service (JPS) has reiterated that Liquefied Natural Gas (LNG) is the preferred option as Jamaica explores alternatives to electricity generation fuelled by oil.

Valentine Fagan, the managing director of South Jamaica Power Company, made the pronouncement while addressing the weekly Jamaica Observer Monday Exchange. That company was set up by the JPS to preside over the construction of a 360-megawatt plant in Old Harbour, St Catherine. According to JPS, that facility, which is slated to come on stream in December 2014, will replace the inefficient and aged Old Harbour power-generating plant.

“There is really not much difference in terms of coal versus LNG, just that it is possible to bring on the LNG plant much faster. Coal plants take five years for construction, in addition to the many environmental issues,” said Fagan as he addressed reporters and editors at the Observer’s Beechwood Avenue headquarters.

“If we don’t add capacity, and if we assume modest growth in the economy, we would have breached the 25 per cent reserve margin, and would find it difficult to supply peak demand. This would result in widespread outages,” Fagan added.

For several months, some stakeholders in the energy sector have been questioning moves by the JPS and the Government to introduce LNG. Some of the observers have suggested that coal would be a less-expensive option. Others have suggested that LNG prices will begin to skyrocket, and have also indicated that Jamaica

JPS News

JPS CEO Faces Twin Challenge: Energy Market In Transition And Customers In Revolt

April 27, 2012

 

Kelly A. Tomblin

 

The Jamaica Public Service Company (JPS) is willing to consider coal as an alternative fuel source for electricity generation, but it first wants to execute plans to develop the LNG plant to which the Government finally gave the green light just over a week ago.

A University of the West Indies think tank has conducted research which shows that LNG was a less expensive option to oil, but a more expensive alternative to coal-generated energy, which they found was the most efficient source in powering a light bulb.

JPS chief executive officer Kelly Tomblin – a 25-year veteran of the utilities business in the United States and other markets and who took up the position at the light and power supplier three weeks ago – said the company and its shareholders were interested in investing in any long term solution for Jamaica, including coal.

However: “As an outsider, if I look to where we are, I would encourage us to execute on the plans that we’ve all agreed to as a first step,” Tomblin said.

“We believe that long-term fuel diversity is a number one issue,” Tomblin told the

News Oil

Coal Is Cheapest Way To Power A Light Bulb

April 23, 2012

About 871lb of coal is needed to power a 100-watt light bulb for 12 months.

 

RESEARCH CONDUCTED by a University of the West Indies energy think tank indicates that coal is the most efficient energy source in powering a light bulb.

Arguing that given the current inefficiencies in the electricity production and distribution system, it takes approximately two barrels of oil to keep a 100-watt light bulb burning continuously for a year, the think tank said using coal-generated energy to do the same job would reduce the cost significantly.

“Using LNG instead of oil would cost roughly half the amount to burn the light bulb, and using coal would be about one-seventh the cost,” the group said.

The think tank said using current prices, it would cost US$178.70 to purchase two barrels of oil to power the incandescent bulb. It said if coal were to be utilised to do a similar job, it would take only 396 kilograms (871lb) of the product at a cost of US$23.8, or 13 per cent of the cost of oil. The think tank also said liquefied natural gas (LNG) would be a more expensive option to coal. The researchers argue that it would require 333 litres of LNG to power the same 100-watt bulb, which would cost US$83.3, or 47 per cent of the cost of oil.

See full column http://gleaner-ja.com/gleaner/20120423/news/news2.html.

‘Using LNG instead of oil would cost roughly half the amount to burn the light bulb, and using coal would be about one-seventh the cost.’

About 871lb of coal is needed to power a 100-watt light bulb for 12 months.

 

http://jamaica-gleaner.com/gleaner/20120423/lead/lead2.html

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