ESET- The new energy path, further review.

I got more information last evening in relation to the new course that ESET plans to chart as it relates to the new policy direction for additional/replacement generation on the grid.  The mix is now as follows.

1. JPS replaces  292 mW HFO plants, with 190mW of LNG fired power plant ( Balance – 102 mW)
2. Jamalco will build a 140 mW plant of which 85mW will be sold to the grid  ( Bal now 17 mW)
3. Alpart to build a 50mW Cogeneration plant. ( Now sure how much will be sold to the grid)
4. 120 MW Bogue to be converted to run LNG ( No increase in generation capacity).

Total new generating capacity  to be deployed  is 380 mW.

Total Installed generating capacity to be available to the grid would be around  290 – 300 mW.

Now let’s explore the various cost involved in getting these plants up and running and what cost would they be able to generate and sell power back into the grid.

I will then give an estimate in terms of the possible reduction in overall cost to the customer when all this is completed and operational.

JPS LNG FIRED 190 mW CCGT 

Installated Capacity (MW)	190
Rated output (MW) based on CF 90%	171
Uptime	85%
# Days	365
Projected Run hrs	7446
Total Generated power (MWh)	1,273,266
Plant Rated Eff  (CCGT)	45%
Average Heating (MJ/CF)	1.11E+00
Total volume of LNG Req CF
MJ of fuel required	10,186,046,512
Cost LNG US$/ ( MJ USA)	$0.01104161
Total Fuel Cost /Annum	$           112,470,364
Fuel cost as % total cost	85%
O&M	15%
Est total annual cost	$           132,318,076
Fuel Cost / KWH	$                      0.0883
Total Cost per KWH	$                      0.1039
Interest payment	$14,772,612
Total Annual Cost Incl Int Pay	$147,090,688
Cost per Kwh	$0.1155

Plant Est Cost	$194,370,000
Loan amount	$165,214,500
Ave weighted cost of borrowing	8.07%
Length of loan yrs	30
Annual Maintenance Cost 1.5% Cap cost	$2,915,550
ROI > 6.6%( After tax)	11.62%
Tax Rate	33.30%
EBT based on 33% Int rate
Total Generation Cost to meet ROI	$           180,952,448
Final Price to Grid	$                      0.1421

As one can see this is above the bench mark of US$0.1288 that was set by the Energy Minister earlier this year.

Now how much does JPS save by shuttering its old Gas Fired Plant. Lets explore the HFO fired plant to see what kind of a cost we believe JPS would have been generating at.

JPS 292MW HFO Fired Power Plants

Installated Capacity (MW)	292
Rated output (MW) based on CF 90%	262.8
Uptime	85%
# Days	365
Projected Run hrs	7446
Total Generated power (MWh)	1,956,809
Plant Rated Eff	30%
Average Heating (MMBTU/GAL)	1.49E+02
Total volume of HFO Req Gal	137,545,710
Tonnes of fuel required	484,807.37
Cost HFO US$/ (TONNE USA)	$                  575.7500
Total Fuel Cost /Annum	$            279,127,840
Fuel cost as % total cost	85%
O&M	15%
Est total annual cost	$            328,385,695
Fuel Cost / KWH	$                       0.1426
Total Cost per KWH	$                       0.1678
Interest payment
Total Annual Cost	$            328,385,695
Cost per Kwh	$0.1678

Plant Est Cost	$227,292,800
Loan amount
Ave weighted cost of borrowing	8.00%
Length of loan yrs	30
Annual Maintenance Cost 1.5% Cap cost	$3,409,392.0
ROI > 6.6%( After tax)	11.62%
Tax Rate	33.30%
EBT based on 33% Int rate
Total Generation Cost to meet ROI	$      367,983,030.98
Price to the grid	$                       0.1881

This is approx 19% reduction in price to the grid. Note this is NOT necessarily the price reduction the customers will see given, the T&D losses, Theft losses etc.

So by JPS would from the above save approximately US$184.66M in fuel cost alone by shutting down its 292 HFO fired plants and build and operate a 190 mw LNG fired plant. There is more savings to come, when we look at the cost now operate the Bogue 120 MW plant .

I will present those numbers later in the week.

Its a lot to digest for now.

Bless