Dr. Cezley Sampson, ContributorTHE PETROLEUM Corporation of Jamaica (PCJ) has secured technical assistance from the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) to examine Jamaica's renewable energy base. The study, which is available to the public, shows that the major opportunities are wind, mini-hydro and biomass/bagasse. So far, no commercial geothermal resources have been identified in Jamaica.
Solar will also be of interest, but at this moment it is not competitive for grid-connected power, although solar is currently being incorporated into the grid system in Germany. Solar is to be pursued to address water-heating solution, solar dryers and photovoltaic technology, especially for deep rural Jamaica. Arising from the study, Government has taken the decision that renewable supplies into the electricity grid, small-scale cogeneration and distributive power should go up from four per cent to 15 per cent of grid supplies over the next 10 years. This will mean the addition of approximately 100mW of new capacity from renewable energy resource over the next 10 years with capital expenditure of US$200 million.
WIND POWER
PCJ took a bold step and commissioned a 20mW wind plant in 2004 costing US$25 million. Earlier, in 1995, a small 225kW plant was installed at Munro College, financed by a donation from a Danish company. Unfortunately, this has fallen into disuse. From the available information at this stage, three additional sites in Jamaica appear to be suitable for commercial wind power plants, with an estimated additional capacity of 60mW.
The conventional view is that average wind speed of eight miles per second is needed at a particular site to sustain commercial wind power operations. A major handicap of wind technology is that it is difficult to guarantee deliverable energy beyond 33 per cent of installed capacity, because of wind variability. Larger turbines of up to 5mW, which have come on stream recently, have helped to reduce capital cost and improve efficiency. Jamaica's terrain may limit us to turbine sizes of 1.5mW to 2mW. We now need to carry out site-specific studies to determine commercial viability at these sites accompanied by a full wind mapping of the entire island. Meanwhile, the Wigton Wind Farm Ltd, a PCJ subsidiary, is looking at additional wind power capacity at the Manchester site.
HYDRO PLANTS
PCJ is also currently developing a small hydro project, consisting of a 1.3mW mini-hydro plant at Laughlands Great River and reactivation of the 0.8mW Rams Horn and 0.6mW Constant Spring mini-hydro plants, which are located on National Water Commission lands. JPS operates six mini-hydro plants, with a total capacity of 21.4mW, accounting for four per cent of the electricity generated in 2003. These plants were comprehensively rehabilitated in 2003, at a cost of US$27 million with financing provided by the German Government Development Bank (KfW). All the plants are 'run-of-the-river' type, and frequent droughts limit the supply of firm capacity to the grid. But they have proven to be the most cost competitive.
Of course, there is potential to commercially develop a further 25mW to 30mW of small mini-hydro plants in Jamaica, but site-specific studies are needed. We are seeking technical assistance from the Government of Canada where specialist expertise exists in mini-hydro technology. Extraction of water for hydropower competes with irrigation and fresh water uses and this has to be taken into consideration. Additionally, since the last studies were carried out, river flows have changed due to changes in precipitation. There is the question also of the Back Rio Grande site, which theoretically offers a potential capacity of 50mW. A hydroelectric feasibility study was carried out in 1991 that showed there would be major environmental hurdles to overcome because of conflicts with tourism interests.
Bagasse from sugar cane presents another interesting opportunity. Small countries such as Mauritius and Réunion have provided the solution to grid power electricity from bagasse.
The amount of energy produced from bagasse, however, depends on the moisture content and the technology adopted. Conventional cogeneration technology tends to treat bagasse as waste and incinerates it in low-efficiency boilers, largely as a process of waste disposal. High-pressure/high-temperature boilers with steam pressures of 45 bar to as high as 82 bar permit electricity export exceeding 100kWh per tonne of cane, as is now experienced in Reunion. The two power plants in Reunion are each equipped with 30mW-35mW units, each crushing 900,000 tonnes of cane annually. A major challenge of bagasse electricity is to be able to supply power in the off-season. Mauritius resolved this problem by installing a dual fuel facility, using coal in the off-season to facilitate a 70mW bagasse/coal plant.
EXPLORING ETHANOL
PCJ and Petrojam Ethanol (another PCJ subsidiary) have financed a study that is currently being carried out by an Indian consulting firm. The study seeks to identify both cogeneration and ethanol production solutions. Recently, a Brazilian investor visited Jamaica to consider investing in the sugar cane industry for cogeneration and ethanol production, as co-products to sugar. We have been working with the Brazilian Embassy in Jamaica assiduously on expanding ethanol production not only to meet local needs but also for export under the Caribbean Basin Initiative. Conversion of 10 per cent ethanol gasolene mix would not require any engine modification to the existing fleet of cars in Jamaica. This would allow for the phasing out of methyl tertiary butyl ether (MTBE) as the fuel enhancer and which is now considered as an environmental hazard. It would also generate a market for 70 million litres of fuel ethanol for domestic use, calling for approximately one million tones of sugar cane feedstock.
Petrojam Ethanol recently joint ventured with a Brazilian firm, Coimex, to commission a third ethanol plant at a cost of US$10 million. This plant now imports its feedstock from Brazil and, along with the two privately owned ethanol plants, exports to the United States under the CBI. Trinidad and Guyana are also putting in ethanol plants to take advantage of the CBI protocol. Brazil is the largest producer of ethanol from sugar cane, and not only does Brazil have all the technology, capital and management expertise to develop a competitive and sustainable production facility in Jamaica, the Brazilian Government and the private sector investors have shown also strong interest in investing in local ethanol operations.
SOLID WASTE
The opportunity to generate electricity from solid waste in Jamaica is limited, and the indications are that the potential is less than 25 MW based on the volume of solid waste now generated and collected by the National Solid Waste Management Authority. The estimate is that 950,000 tonnes of waste is generated per annum and collected at nine different sites, with Riverton being the largest, with 380,000 tonnes per annum. The indications are that any large-scale production of electricity from solid waste would require importing waste from other counties in sufficient quantity to make the exercise commercially viable. The importation of waste gives rise to serious environmental risks in addition to serious questions about the economic viability of such a venture. There is also competing use for the existing waste that is generated.
There has been much talk about ocean thermal technology, but this solution is still at the pilot plant stage. There are no major commercial plants supplying grid electricity that has been brought to our attention and the general feeling is that with our limited resources, Jamaica should pursue proven technologies at this stage.
The opportunity also exists for the development of small cogeneration and distribution power capacity. The current thinking is that small scale self-producers of combined heat and power in the range of up to two MW should be permitted to connect to the electricity system and sell their excess power to the JPS under standard conditions and standard purchased rates, as designated qualifying facilities and as designated by the OUR. It is expected that these smaller operators would operate under a net metering regime.
With the introduction of combined cycle gas turbine, fuelled by natural gas and based on the price understanding reached with Trinidad, the avoided cost analyses carried out to date indicate that the additional bulk electricity cost delivered to the grid should be around US5.5 to 6.5 cents /kWh. The question then, which arises with renewable energy, is the relative price for the procurement contracts relative to power from natural gas powered plants.
All fossil fuel plants carry an externality cost, which society bears and which the generators do not absorb in their internal accounting costs. With today's market for carbon trading it is possible to set a price that society should accept renewable energy, such that a fair comparison can be made with fossil fuel, adjusted for its externality cost. We would therefore not expect renewable energy power to be higher than U.S. 7.5 cents cents/kWh. We should also bear in mind that the foreign exchange cost of renewable power is front-loaded, and there is minimal annual foreign exchange cost thereafter. In fact, there is virtually no fuel cost, while the fuel cost from fossil sources is unpredictable.
NATURAL GAS
Natural gas itself is also feeling the effects of global energy shortages. There is as yet no global price for natural gas. In 1996, the CIF price for LNG in Japan was US$ 3.66 per million British thermal units (MBtu). In the UK, the domestic natural gas price was US$ 1.85 Mbtu and for the US, the Henry Hub spot price was US$3.54 Mbtu. In 2003, the respective prices had increased to US$ 4.77, US$ 3.26 and US$5.63. In 2005, prices were much higher. The point is that the market for gas is steadily shifting from a buyer's to a seller's market. These factors have to be taken into consideration when fuel choice decisions are being made. Whatever the decision, there will be a risk element.
The Petrocaribe agreement also includes a renewable energy component designed to promote the continued development and commercialisation of renewable energy. Most importantly, a special financing facility is to be created to fund the implementation of renewable projects in Jamaica and member countries of the Petrocaribe agreement. The EU recently created a 250 million ACP-EU Energy Facility to finance renewable energy solutions and energy efficiency investments and Jamaica is eligible to source financing from both facilities.
