Can the Enterprise meet the Government price target of US$0.1288 per Kwh ?

The Government via Phillip Paulwell has indicated that EWI has set a benchmark of US$0.1288 and any new entrant must be able to come it at this figure or below, but is that really possible.

I presented some figures which showed that EWI could not have provided energy to JPS at $0.1288 and instead the best price based on my calculations would be US$0.1675 per kWh, which would not be the final price to the customer, based on the price of LNG out of Asia. With EWI out of the picture I decided to explore new project of 381 MW (base load).

See my analysis below as well as LNG US Export prices. Now you be the judge.

Installed Capacity (MW) 381
Rated output (MW) based on CF 90% 342.9
Uptime 85%
# Days 365
Projected Run hrs 7446
Total Generated power (MWh)                             2,553,233.40
Plant Rated Eff  (CCGT)   50%
Average Heating (MWH/CF) 5.13E-06
Total volume of LNG Req CF                         16,578,153,629
Cost LNG US$/ ( 1000CF USA) $15.49  $                                     0.0155
Total Fuel Cost /Annum  $                          256,795,600
Fuel cost as % total cost 85%
O&M 15%
Est total annual cost  $                    302,112,470.24
Fuel Cost / KWH  $                                     0.1006
Total Cost per KWH  $                                     0.1183
Interest payment $43,019,358.24
Total Annual Cost Incl Int Pay $345,131,828.48
Cost per Kwh $0.1352
Plant Est Cost $656,000,000
Loan amount $556,000,000
Ave weighted cost of borrowing 6.60%
Length of loan yrs 30
Annual Maintenance Cost 1.5% Cap cost $9,840,000.0
ROI > 6.6%( After tax) 8.50%
Tax Rate 33.30%
EBT based on 33% Int rate
Total Generation Cost to meet ROI $428,730,029.38
Sale Price to JPS  $                                     0.1679

US Export LNG Prices

 

In order for the enterprise team to get electricity to the grid at Paulwell’s figure this would be what is required in terms of fuel price.

Installated Capacity (MW) 381
Rated output (MW) based on CF 90% 342.9
Uptime 85%
# Days 365
Projected Run hrs 7446
Total Generated power (MWh)                             2,553,233.40
Plant Rated Eff  (CCGT) 50%
Average Heating (MWH/CF) 5.13E-06
Total volume of LNG Req CF                         16,578,153,629
MMBTU of fuel required                                 290,387.75
Cost LNG US$/ ( 1000CF USA) $10.35  $                                     0.0104
Total Fuel Cost /Annum  $                          171,583,890
Fuel cost as % total cost 85%
O&M 15%
Est total annual cost  $                    201,863,400.07
Fuel Cost / KWH  $                                     0.0672
Total Cost per KWH  $                                     0.0791
Interest payment $43,019,358.24
Total Annual Cost Incl Int Pay $244,882,758.30
Cost per Kwh $0.0959
Plant Est Cost $656,000,000
Loan amount $556,000,000
Ave weighted cost of borrowing 6.60%
Length of loan yrs 30
Annual Maintenance Cost 1.5% Cap cost $9,840,000.0
ROI > 6.6%( After tax) 8.50%
Tax Rate 33.30%
EBT based on 33% Int rate
Total Generation Cost to meet ROI $328,480,959.20
Sale Price to JPS  $                                     0.1287

 

The last time we saw LNG at that price was March 2013 see table attached.

Jan-2011 8.2
Feb-2011 9.71
Mar-2011 10.28
Apr-2011 8.25
May-2011 8.62
Jun-2011 11.6
Jul-2011 12.72
Aug-2011 11.6
Sep-2011 12.76
Oct-2011 12.54
Nov-2011 15.29
Dec-2011 12.83
Jan-2012 11.83
Feb-2012 11.3
Mar-2012 10.67
Apr-2012 8.54
May-2012 16.1
Jun-2012 17.55
Jul-2012 8.49
Aug-2012 15.15
Sep-2012 8.4
Oct-2012 11.57
Nov-2012 8.86
Dec-2012 11.76
Jan-2013 10.11
Feb-2013 10.85
Mar-2013 10.02
Apr-2013 11.36
May-2013 12.84
Jun-2013 13.38
Jul-2013 12.89
Aug-2013 13.25
Sep-2013 13.53
Oct-2013 13.09
Nov-2013 13.45
Dec-2013 12.69
Jan-2014 13.7
Feb-2014 15.49

 

Unless we get a damn good deal on long-term supply of LNG (not sure how), the proposed cost of US$0.1288 is nothing but  piped dream.

Challenges to the above is welcomed,  as long it is  accompanied by data .

 

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3 Responses

  1. May I just add that price of US export LNG of US$10.04 per 1000 CF, does not include shipping to, off loading, insurance and taxes that may be applicable on such imports.

    In addition the USA Government must authorize the exports of LNG from its shores to elsewhere.

  2. Seems Tomblin does not see prices “tombling” just like I have indicated above.

    I would have expected I would have been challenged by now, but that has not been forthcoming.

    http://jamaica-gleaner.com/gleaner/20140525/lead/lead1.html

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