John Myers Jr, Senior Business Reporter

Clive Mullings, minister of energy, speaks at the press conference to announce Ethanol in Gasolene, The Future is Ethanol at Terra Nova Hotel on Thursday, October 23. - Rudolph Brown/Chief Photographer

Jamaica's inability to source LNG has forced the Golding administration to abandon the commodity as the primary energy source for the country's development and instead look to coal as its key fuel source, the energy minister, Clive Mullings, has disclosed.

But Mullings told Wednesday Business that a final embrace of coal was contingent on the island's alumina refineries agreeing to having coal-fired plants, which would require the building out of a US$300-million (J$21.6 billion) infrastructure to enable the burning of the carbon. He said the Government was prepared to facilitate the construction of the facility by private investors.

The bauxite/alumina sector uses approximately a third of the power generated in Jamaica.

"LNG (liquefied natural gas) is not an option now, " Mullings said. "... For LNG to become viable, international research has shown that you need 600 megawatts ... . We would have to switch the entire system to LNG."

Added Mullings: "We don't want to switch wholesale to one energy source because you are then tied to that and when that price moves, you have no options."

Cheap and cleaner than oil

Jamaica's national domestic energy grid - outside the bauxite alumina sector - is about 800 megawatts, but the Government has projected that this needs to increase by 210 megawatts by 2012.

The past administration had planned much of the expansion of a substantial conversion to LNG and hoped that this fuel, cheap and cleaner than oil, would help to drive industrial expansion here. Among the projects predicated on LNG was a US$1-billion expansion of the Jamalco alumina refinery - jointly owned by the Government and Alcoa - whose capacity was to be nearly doubled to 2.8 million tonnes a year. The refinery would have a new 80-megawatt natural gas-fired power plant, which would sell excess electricity to the national grid.

Initially, Jamaica expected to get 1.1 million tonnes of LNG annually from its Caribbean Community (CARICOM) partner, Trinidad and Tobago, starting in 2009. But that deal fell through when Port-of-Spain fell behind in developing new fields and told Kingston, with existing contracts, it had none to sell.

Venezuela then said it would supply, but it too is still developing new fields and all its current output is earmarked to domestic production. The past government had also looked to Colombia providing compressed natural gas (CNG), but without any deal being struck.

When the Jamaica Labour Party came to office a year ago, deciding on an energy mix was still being debated by technocrats until an apparently exasperated Prime Minister Bruce Golding announced that his administration had committed itself "to establishing LNG facilities for the long haul".

In short, LNG would become the new primary energy mix, alongside oil and renewables such as wind, solar and hydro-power.

However, Mullings explained demand for LNG has been increasing, tightening supplies and raising prices. Coal, on the other hand, is abundant and cheap.

Carbon emissions

While in recent times, proponents of coal have touted the development of 'clean' coal technology, critics still often point to the carbon emissions from this fuel, which, like the emissions from oil, contribute to global warming.

It will not be Jamaica's first foray into the use of coal. In the 1980s, the JLP government under Edward Seaga had put in a coal-fired plant at the then state-owned Caribbean Cement Company, and for a while imported the fuel from Colombia, which Mullings again expects to tap for the commodity. The conveyer that transported the coal from the ships to the cement plant is still visible at the CCC's facility at Rockfort, east Kingston.

With using coal, however, Mullings said it was more conducive to small- and medium-scale expansions, thereby allowing for a gradual upgrade in power production to meet demand as required. "Coal affords us the opportunity to increase from 100-150 megawatts, so you can increase over time," he said. But with LNG, he explained that "the high cost of infrastructure would require that nearly all the generation capacity of the country be converted at the same time".

Willingness

While nothing was finalised, Mullings told Parliament the bauxite companies, as well as power producers, have essentially signalled their willingness to move to coal.

"In discussions with key players in the bauxite alumina and power sectors, they have indicated their willingness to install coal plants (and) I am encouraging them to share in the cost of developing a single coal receiving facility," he said.

Such a move would lower costs and, ultimately, the price at which electricity is delivered to consumers.

"I can confirm that coal as an alternative source of energy is one of the options to which active consideration is being given," said Leo Lambert, public relations and government affairs manager at Jamalco.

Lambert said, however, that rather than examining one energy source, it would be better to consider a combination of options. He could not provide a time frame for the conclusion of those talks, but said it it was important that it happen in a timely fashion.

john.myers@gleanerjm.com