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NWC can produce more power than JPS – Chang

November 3, 2016 Webmaster

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

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Jamaica Faces Trek To A Green Economy

May 12, 2016 Webmaster

KHAN… what we want is for them to own, as much as possible, what has to be done in each sector

From the “historical momentum in favour of brown industries” – those overly dependent on fossil fuels – to “bias in the political system towards short-run and against long-run perspectives”, the deck appears stacked against Jamaica’s efforts towards a green economy.

These factors, according to the recently published Green Economy Scoping Study, in addition to others, include IMF prescriptions that preclude Government providing tax incentives to encourage greening.

Still, the study – done with United Nations Environment Programme and European Union support – notes that in as much as these factors are barriers, they are also justification for the transformation of the economy into one typified by efficient resource management, a low-carbon footprint, and which is socially inclusive.

And it cites a variety of opportunities that can be pursued across key sectors – agriculture, construction, energy, tourism, and water – from the private sector’s demonstrated leadership in some fields to existing policies and programmes.

Elizabeth Emanuel, one of the study’s authors, said the Vision 2030 Jamaica, for which she is programme director, is one such.

“One of the benefits Jamaica has in advancing to a green economy, compared to other states, is that our own national development plan had the foresight to include the green economy as a pathway to prosperity. That plan speaks to the green economy and what a green economy would look like for Jamaica,” she told The Gleaner.

Possibility Indicators

And there are some good indicators of what’s possible, Emanuel added, noting that there have been, for example, advances in the diversification of the island’s energy mix.

“We also have a society that is more aware, companies that are thinking and talking green, and all of these are creating the demand for a green economy,” she noted.

According to Emanuel, there is no question of the need to pursue the transition – whatever the constraints.

“The green economy is not just about environmental protection, but it is our planet, our people, our economy and how we marry those three to create sustainable solutions that will advance the prosperity of our land of wood and water,” she said.

Eleanor Jones, head of Environmental Solutions Limited, agreed.

“When it comes to what we need, we need to look at our resources management because that is also a part of it … . But you can’t just wave a magic wand. It has to be a structured approach with legislation and incentive … ,” she said.

“We like to talk about the IMF putting in all these strictures, and they have, and you have to watch your budget. But not everything has to cost a lot of money… . We have to encourage our suppliers to retool and encourage our consumers to manage their resources,” Jones added.

Colonel Oral Khan, chief technical director in the Ministry of Economic Growth and Job Creation, said the coming months should see a re-engagement of key actors towards the green economy.

“The various sectors were consulted in the preparation stage. We now need to re-engage with these sectors at the highest levels because there have been a number of changes,” he said.

“What we want is for them to own, as much as possible, what has to be done in each sector. We expect that they will go through the list of recommendations that are there and see which ones are to be done in the short to medium term, so they can embrace those and seek to work them into their respective strategic plans. That is the approach we will take,” he added.

Among the recommendations from the study are:

• Sustainable land management and water management systems for agriculture;

• Enforce the new building code, as well as adopt codes and standards that mandate green construction practices for the construction sector; and

• Promote and incentivise renewable energy use and water use reduction, as well as planning for climate change for the tourism sector.

There is, too, the recommendation to develop more extensive sewage recycling, as well as reduce energy cost and diversify sources for the water and sewerage sector.

pwr.gleaner@gmail.com

The Gleaner

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Government Oil Hedge Underwater

January 15, 2016 Webmaster

Gov’t oil hedge underwater

In June 2015, the Government of Jamaica booked a hedge transaction to buy six million barrels of oil for delivery 15 months later at a strike price of US$66.74.

The mechanism used in this kind of transaction is called a ‘call option’, which gives the purchaser of the option the right, but not the obligation, to purchase the asset at a specified price the ‘strike price’ within a specified time. A month later, it bought another 15-month futures contract for two million barrels of oil and the average strike price of the two contacts is US$66.53.

We paid about $30 million to Citibank for the privilege of placing this bet on oil prices going higher than our strike price in 15 months.

When these contracts to buy crude oil were booked, prices on the world market was trading at about US$63 a barrel and had rebounded from about US$45 in January 2015. The government placed a bet based on its belief that crude oil prices would continue to rise well above the $66.53 strike price. If that were to happen and oil prices were to increase to, say, US$80-US$90 per barrel, the Government would be in the delightful position of having to pay only about US$66.53 per barrel for oil that would be trading at the much higher spot price on the international commodity market. The Government of Jamaica, senior executives at the Bank of Jamaica, and members of the oversight and technical committees created by the Government to manage the hedges, all seem to have bought into the belief that oil prices would climb higher than US$67 before the expiry date of the options.

The oversight committee is comprised of the financial secretary, Devon Rowe; the governor of the Bank of Jamaica, Brian Wynter; the managing director of the Development Bank of Jamaica, Milverton Reynolds; the managing director the Petroleum Corporation of Jamaica, Winston Watson; and Dr Vincent Lawrence. Mr Watson is known to have experience in oil trading and markets. Only Michael Hewett, an executive at Petrojam, was named as a member of the technical committee.

Wrong direction

One has to believe that the intention of the members of the government-appointed committees and all of those involved in the hedge transaction was a good one to try and protect Jamaica against that time in the 15-month period when oil prices might spike above US$67. While there is still considerable time to the maturity of the call options, right now the bet is not looking good and the best projections are for oil prices to fall even lower than the below-US$30 they traded at this week.

This week, three important financial institutions released projections indicating that oil prices could fall to US$10-US$20 per barrel and stay there for sometime. Goldman Sachs’ projection was at US$20, Morgan Stanley’s was US$20 and Standard Chartered, a bank with strong roots and connections in the Middle East and Asia, projected US$10 a barrel oil.

In the futures trading business, which is where these call options reside, when an option is bought with the expectation that the price of the commodity will increase but the opposite occurs, the option is said to be ‘underwater’. Given that these options were booked with the expectation for oil price to rise above US$66, and they are now heading in the direction of US$20, Jamaica’s call options on oil are seriously underwater.

A better alternative

In November 2014, a public official asked me about hedging because someone had written him an email to encourage Jamaica to hedge oil transactions on the upside, based on a scenario the email writer concocted about the state of affairs in the international oil industry. The public official was aware that I had traded oil futures for many years and had lived in the Middle East for more than two decades. I share below an excerpt from my reply:

“The recommendation needs study because taking a position means the Government and Jamaica will be guessing the direction of the movement of the price of this commodity. The writer makes it sound like making money on these bets (options) is a sure thing. It is not.

“There is always a risk. Suppose we bet on a certain price increase in a specific time frame, which we would have to if we are going to hedge, and prices instead of rising to, say, US$70/bbl from US$50 falls to US$35/bbl during our hedge horizon, we would suffer an important loss depending on the size of the contract. This is what apparently happened to that forward position Jamaica took on that futures contract on aluminium with the Russians and/or Glencore, the debilitating result of which you are very familiar.

“When oil went to US$9/bbl in the 1990s, if you had dared to tell anyone about the US$147 per barrel price which occurred in July 2008 they would have declared you mad. It’s a commodity; any card can play. On review, if the writer sees the prices as going one way, down, and OPEC is ‘dead’, why hedge? Do nothing, stay addicted to imported oil and go for the lovely ride to low-oil-price nirvana.

“The better alternative is to wean ourselves off the 98 per cent dependence on petroleum-based fossil fuels for our energy supplies. We really need to develop and use renewable energy from many sources, including bagasse, garbage, wind, water and solar.”

Aubyn Hill is CEO of Corporate Strategies Ltd and chairman of the Economic Advisory Council of the leader of the opposition.

The Gleaner

News

11 clever ways to conserve water at home

August 24, 2015 Webmaster

From the bucket flush to reusing pasta water, these novel tricks are a good addition to the tried-and-true tips.

“…Drought or no drought” we should all treat our water as the precious resource that it is. It’s not infinite and those of it who have it in abundance often waste it heedlessly. The World Health Organization recommends two gallons per person daily to meet the requirements of most people under most conditions – and around 5 gallons per person daily to cover basic hygiene and food hygiene needs.

On average, an American resident uses about 100 gallons of water per day; while those in Europe use about 50 gallons of water daily. A resident of sub-Saharan Africa uses two to five gallons of water per day.

While reducing your water usage to five gallons a day would prove prohibitive for those of us accustomed to using more, there are plenty of smart ways to reduce your usage prodigiously. This is not a new topic for TreeHugger, we’ve offered these 10 tips in addition to these 5 swaps – but wait, there’s more! Consider the following:

1. Embrace the bucket flush

Well, not literally … but emotionally. Use a gallon of water, pour it into your toilet in one fell swoop, and behold the miracle of your toilet flushing on its own (depending on your toilet, it may take more than a gallon). And while it may not sound very First World, who cares? It’s an awesome trick to know and will come in handy for several of the following tips.

2. Take a bucket to the shower

When waiting for the shower water to warm up, collect the cold water that precedes the hot in a large bucket or waste can. That is valuable water! Depending on how quickly your water heats up, the collected water can be used for a number of bucket toilet flushes.

3. And while we’re at it: shower or bath?

A bath uses up to 70 gallons of water; a five-minute shower uses 10 to 25 gallons. That said, if you don’t drain your bath after, you can use that water to flush the toilet and water plants. Don’t be indulgent with your baths, but if you do, don’t let that good water go to waste.

4. Don’t pre-rinse your dishes

Many modern dishwashers do not require pre-rinsing of dishes – a good scrape should suffice. Read your manual and see if yours suggests the same.

5. Load your dishwasher properly

There are right ways and wrong ways to load your dishwasher; doing it incorrectly can lead to still-dirty dishes that require extra water for washing. For more, see: 7 common dishwasher-loading mistakes that may surprise you.

6. Compost rather than feeding the garbage disposal

In-sink garbage disposal contraptions require a lot of water to do their thing, and they also add solids to a septic tank which can lead to problems. Instead, use up your food scraps or add them to the compost bin.

7. Wash your produce in a tub

Place a basin or large pot in your sink, fill it, and wash your produce in it. Then place it in a colander to drain over the basin. Not only does it save a lot of water, but you can then use that water to flush the toilet or water plants. If you feel compelled, you can, alternatively, rinse produce in a colander as long as you do it over a bucket and collect the water.

8. Don’t dump the pot

After cooking pasta or anything else that requires boiling or steaming, save the water, allow it to cool, and use it for bucket flushing or watering the plants.

9. Beware the permanent press cycle

The permanent press cycle on most washing machines uses an extra five gallons of water for the additional rinse.

10. Turn off the tap

You’ve heard it before, turn off the water when brushing your teeth, but do you know just how much this saves? The average faucet releases two gallons of water per minute, you can save up to eight gallons of water every days by turning off the tap while you brush your teeth – if you brush for the recommended two minutes, that is. Likewise, for the gents, rinse your razor in a pool of water in a stoppered sink rather than under running water.

11. Fix leaky sinks and running toilets

Another obvious one, yet, also another one that is really important: A running toilet can waste up to 200 gallons of water each day. At one drip per second, a faucet can leak 3,000 gallons in a year. Call the plumber already!

TreeHugger.com

Alternative Energy Energy Saving News Solar Energy

MIT INVENTION TURNS SALT WATER INTO DRINKING WATER USING SOLAR POWER

August 24, 2015 Webmaster

From plants to people, every living thing on this planet needs water. But getting enough to survive, and survive comfortably, that can be a little tricky. Just look at the furor around California’s new water restrictions. If a state as wealthy as California is having to get creative in order to start saving water, you can bet that governments and municipalities with less money and clout are having to turn to even more inventive methods to get clean water without breaking the bank.

Luckily, some of the brightest minds in the world are on the case. USAID recently announced the winners of the Desal Prize, part of a competition to see who could create an affordable desalination solution for developing countries. The idea was to create a system that could remove salt from water and meet three criteria: it had to be cost-effective, environmentally sustainable, and energy efficient.

The winners of the $140,000* first prize were a group from MIT and Jain Irrigation Systems. The group came up with a method that uses solar panels to charge a bank of batteries. The batteries then power a system that removes salt from the water through electrodialysis. On the most basic level, that means that dissolved salt particles, which have a slight electric charge, are drawn out of the water when a small electrical current is applied. In addition to getting rid of salt (which makes water unusable for crops and for drinking), the team also applied UV light to disinfect some of the water as it passed through the system.

Using the sun instead of fossil fuels to power a desalination plant isn’t a totally new idea. Larger solar desalination plants are being seriously investigated in areas where water is becoming a scarce resource, including Chile and California. While proponents hope to eventually could provide water to large numbers of people, the technology is still expensive (though prices are dropping) and requires a lot of intricate technology.

In rural areas or developing countries, durability is key, and technology that requires constant upkeep won’t last long. The MIT/Jain team and their competitors tested their projects at the Brackish Groundwater National Desalination Research Facility in New Mexico, where they had to run the system for 24 hours at a time, removing salt from 2,100 gallons of water each day. The next step is to test it in an even harsher environment, exposing it to everyday use with rural farmers in an area where USAID is active. If all goes well, the system could provide enough water to irrigate a small farm.

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