Energy Path Set – ESET . A brief analysis of what has been presented.

I will attempt to provide readers with a brief analysis of what was presented at the first ESET press conference yesterday.

The Gleaner today reported that  ESET has decided to replace the 381 mW project with a set of other power generation initiatives that would cut energy cost by 30%. Now I was not at the press briefing, but I have seen nothing so far in what was presented in the papers to show that this pronouncement is even realistic.

Key points that have been noted via the Gleaner

  1. JPS is to convert its Bogue Plant plant to burn gas ( I will come to this in a second)
  2. JPS is to replace 292 MW of oil fired plant with a 190 mW Gas turbine burning LNG.
  3. Jamalco is to operate a Co-Generation coal fired facility
  4. US Rusal which operates Alpart is to build a Ethane fired power plant .
  5. ESET is to  conduct further due diligence on the various proposals and analysis on fuel supply financing etc.

Point 1.

As far I  know this facility is a dual fuel plant (flexi fuel), which is capable of burning both HFO and LNG and all is required is a source of fuel ie LNG. Savings here but no increase in base load capacity on this 120 mW Power plant. JPS has been in talks for sometime now to get a stable and cost effective supply of LNG for this facility and actually signed an agreement with Canadian firm Fueling Tech Incorporated (FTI) International , which was leading a consortium to assist JPS in this regard.

Point 2

JPS is to replace 292 mW of generation with 190 mW, which leaves a shortfall of 102 mW and has to be replaced somehow . I read nothing so far to suggest how this shortfall will be replaced. It early days yet, so I do expect to hear more  from ESET on this one.

Point 3

Jamalco had a proposal on table to build a 140 mW Cogeneration , to provide its thermal requirements and would off load 85 mW of power in the JPS grid. I am not sure if this is the proposal that is being rehashed almost 8 years later, so I will await further word from ESET on this particular matter.This plant would have been a coal fired plant and as ESET have said the coal would come from Columbia, which was the worlds 4th largest suppler of coal in 2012. The good thing about the coal from Columbia is its low sulphur content, which means lower SOx emissions. I am going to assume this 85 mW to be sold into the grid would help reduce the 102 mW deficit mentioned above.

Typically Co-generation facilities are not used to provide base power given the fact that the facility in question would use what it needs and feeds the remainder into the grid, which makes this more of a Distributed Generation Facility of DG and therefore would  provide a variable supply.

Now a coal fired plant takes approximately 4 yrs to build, so if construction begins late next year, the plant would not come online until  late 2019 !

I will support a coal fired plant, but I would have preferred if JPS was the one developing this facility for true base load requirement.

Point 4

US Rusal Ethane fired power plant. I think this is a none starter for two main reasons

  1. US Rusal is not going to be making any further investments in Jamaica.
  2. Ethene as a source of fuel for a power plant is a major challenge, as the process to transport from where its manufactured to point of use is not mature process given the extreme conditions that it requires. It is typically used where its processed and frankly  I do not see UC Rusal being involved in this process at all, so I would say this particular proposal is akin to flying a kite.

So where does this leave us.

I said the information presented by ESET has offered absolutely nothing new at this stage given what I have mentioned above. JPS lost the chance to replace its aging generators under the original 400 MW project because it was unable to source the LNG require to run its facility.

By splitting up the project into little bits and pieces therefore reduces our bargaining capabilities for cheaper LNG. if each entity is required to find, negotiate and sources it own fuel, which reduces the possibility of that magical 30% we are looking for.

The only way this would therefore work is if one entity ( eg the GOJ) negotiates and sources the fuel, which it in turns sells to the power producers. Recall we attempted this before with Exmar and we all recall how that ended up.

I will not cold pour water yet on the ESET preliminary report and will await further information, but from what has been reported thus far, it fails to inspire any confidence that we can have cheaper sources of electricity and 30% reduction by 2019 !

That folks is my quick analysis of the ESET first report.


4 Responses

  1. Further analysis have revealed that JPS will save about 7% on generation cost per kwh by replacing 292mw HFO plants with a 190 LNG plant. Currently looking at the Bogue Plant shortly.

  2. I see the Director of Generations of JPS as well as as CEO of JPPC has agreed with a number of points in my analysis based in what was written in today’s gleaner.

    Point 1.

    Kistle adds that while ethane is currently cheaper than natural gas under hub pricing, it is not a globally traded commodity and there is at present no export capacity anywhere in the world.

    Point 2
    As for LNG, “I don’t know if that is the most viable form at this time given the size of the requirements of the Jamaican grid, which is why we have been having such a large problem bringing LNG. I don’t know who is going to supply for 300MW or 800MW,” she said.

    This week is engineers week in Jamaica and still yet to hear a peep from the JIE on this most important project !

  3. […] Energy Path Set – ESET . A brief analysis of what has been presented. […]

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