JPS ponders using LNG
Published:Thursday | July 22, 2010 | 12:00 AM
Philip Hamilton, Gleaner Writer
The Jamaica Public Service Company Ltd (JPS) is seriously pondering using liquefied natural gas (LNG) as a cheaper alternative to expensive oil, which it now uses predominantly in several power-generating plants.
JPS vice-president of generation expansion, Valentine Fagan, on Tuesday told The Gleaner the company is committed to going along with the Government's energy policy, which speaks of diversification to natural gas.
Fagan, who was guest speaker at the Kiwanis Club of Kingston's luncheon meeting at the Wyndham Kingston hotel, said electricity costs would be significantly reduced if JPS used LNG.
He said LNG, which was easier to establish than a coal plant, would reduce environmental pollution.
"We need to get LNG here by 2013 and reconvert our plants. It's a good thing but it has to be here before we can commit to the investment," Fagan said.
Fagan said the JPS was currently in the process of reviewing as well as adopting renewable energy sources to reduce its dependence on imported fuel oil.
Last year, Jamaica spent US$1.3 billion on imported fuel, 32 per cent of which was used for electricity production.
JPS' generating costs hit a high of 20 cents US per kilowatt hour (kWh) in 2008 during the peak of global oil-price hikes, before finally settling to 14 cents per kWh or 60 per cent of the company's current operating cost.
Fagan said using LNG to generate electricity would cost 10.8 US cents per kWh, compared with 15 cents per kWh from medium-speed diesel-generating units, the most fuel-efficient power-generating technology presently in use.
Real options
He said renewable energy sources, such as wind energy and hydropower, were real options, as the JPS could generate wind power at 13.4 cents per kWh and hydropower at 7.42 cents per kWh.
Wind and hydropower both account for just five per cent of the JPS' total installed capacity of 809 megawatts.
The company is currently constructing a three-megawatt wind farm, comprising four wind turbines in Munro, St Elizabeth, scheduled for completion in September.
Additionally, a new hydro-plant is currently being designed to be co-located by a similar existing facility in Maggotty and which is expected to double power capacity when constructed in 2012.
Fagan said contrary to popular belief, solar-power generation was not a viable option for JPS, as it proved too expensive, noting that industrial-type solar generation cost 84 cents per kWh.
Added cost
Additionally, Fagan said the installation of solar panel arrays to produce power in commercially available quantities required large acreages of land that only served to add to the already high cost.
He called on the Government to provide incentives to encourage the development of renewable sources, adding it was very difficult for the private enterprises to compete without this.
"In other countries, they give tax credit and other production incentives to generate more renewable energy as, in the long run, it speaks to energy security as well as breaking the dependency cycle (on imported oil) as a start," said Fagan.
He noted that JPS projections which the company, through a diversified mix of energy sources with LNG as the base, followed by renewable energy, could reduce fuel costs as low as 6.6 cents per kWh by 2018.
"If we continue with oil, we will be moving from 15 cents to 19 cents per kilowatt-hour, which is much more than we're currently experiencing. We could cut that cost in two by 2018 if we go to LNG," the vice-president said.