Solar power risk - JPS cautions that alternative energy drive may push electricity prices higher
Daraine Luton, Senior Staff Reporter
WITH renewables expected to account for 20 per cent of the country's energy mix by 2018, John Kistle, senior vice-president for generation at the Jamaica Public Service Company (JPS), is worried that this could cause some Jamaicans to pay more for electricity.
According to Kistle, some consumers could be saddled with unnecessary energy cost if the State fails to find the ideal balance between new gas-fired power plants and renewable capacity.
He said the JPS was engaged in an exercise to determine whether Jamaica needs 360 megawatts of new base-load capacity, which the Office of Utilities Regulation (OUR) has determined is the need.
The JPS representative added that it was important for the authorities to decide on the optimal allocation of existing resources, renewables and gas, to determine the lowest cost of energy.
But despite these claims by the JPS senior executive, Energy Minister Phillip Paulwell is insisting that the benefits of a cleaner environment and reduced foreign exchange spending make renewables an attractive option. He also said the cost of generating power from renewables is below US$0.20 per kWh, which is cheaper than fuel oil.
"It is not true to say that price will move with renewables. In fact, as a Government, we want to see 30 per cent renewables by 2030," Paulwell said while adding that the demand for electricity will increase as prices are lowered. That 30 per cent would be an increase over the 20 per cent set under the National Energy Policy.
"We are anxious to get to at least 30 per cent," the minister said. However, Kistle said while countries such as Germany have decided to rely primarily on solar power, mainly for environmental reasons, that decision has pushed up the price of electricity for Germans because of the cost of solar generation and storage equipment.
"At some point, adding too much renewables becomes expensive," Kistle told The Gleaner.
The Government has set a target for the participation of renewable energy generation in the electricity system at 12.5 per cent by 2015 and 20 per cent by 2030.
Paulwell has said the inclusion of a greater amount of renewables in the energy mix is essential to obtaining a 30-40 per cent cut in light bills.
However, Kistle, while likening unused capacity being produced by a new plant to spare tyres that are idle in the trunk of a car, said, "If you build too much, you end up with a unique condition where assets which are under contract, or assets which are part of the rate base, aren't being utilised."
The JPS official said that when combined with the objective of having new renewable energy, the issue of the size of the new power plant becomes even more complicated.
He said JPS was in the process of conducting analysis to determine the ideal mix of new energy solutions, which will provide the lowest cost to the consumer.
"If we don't do many renewables, if we don't do solar and wind, then a big power plant is fine. A big plant would work if you don't have renewables," Kistle said.
"If I put too much renewables in, I may have to turn off that big new power plant in the middle of the day or I have to turn something else off," Kistle said.
Kistle said that since arriving at the JPS two months ago, he has been unable to find any government study that indicates the basis on which it was determined that 360MW of generating capacity is required, when the objective of 20 per cent renewables is taken into account.
But the OUR, which has responsibility for procurement of new generation capacity for the grid, said the 360MW generating capacity requirement was identified based on a Generation Expansion Plan (GEP) that was conducted in 2010.
The GEP states that the fundamental objective of the intervention is to diversify the country's fuel mix so as to reduce the exposure and heavy dependence associated with any one fuel source for energy production, while improving the security of the country's energy supply.
"Increased percentage of renewables in the energy mix is expected to yield the benefit of reduced dependence on imported oil. Increased use of renewables should also result in lower levels of air pollution, a smaller carbon footprint for Jamaica, and better compliance with international conventions on climate change," the GEP states.