Getting more out of renewables means building smaller gas plants
A little over 30 per cent of Jamaica's electricity generation is old or past retirement.
Replacing those energy-hungry units, which burn diesel and heavy fuel oil, with newer, natural gas-fired plants in one fell swoop would likely result in large savings.
Estimates on potential fuel cost reductions range from US$150 million to US$300 million annually, depending on who is doing the math.
But building a large power plant which is fired by imported fossil fuels doesn't address two of Jamaica's fundamental challenges: the volatility of fuel prices and currency depreciation.
"If we build a big gas plant, let's say 250 megawatt (MW), we will get a drop in cost but we are still on fossil fuel and we are still buying that fossil fuel internationally," said John Kistle, senior vice-president of generation at Jamaica Public Service Company (JPS). "This doesn't solve the problem; what it would do is reset the starting point."
On the face of it, the price of natural gas is so much lower than diesel and heavy fuel oil, it seems it would take years, or even decades, before depreciation or commodity price movements would make gas-fired plants as expensive to run in Jamaica as the ones that are currently operational.
According the US Energy Information Administration, natural gas spot prices average between US$4 and US$5 per million Btu (mmBtu), which is about the amount needed to generate 125 kilowatt-hour (kWh) of electricity from a new plant.
In Jamaica, the fuel used currently cost US$16 per mmBtu, according to Kistle. But that's at the nozzle tip to the power plant.
Before natural gas can reach Jamaica from a well, say in the state of North Dakota, it has to be processed, made into liquid, loaded on a ship and transported. It then needs to be offloaded at a port facility on the island and turned back into gas, before being piped to a power plant.
All in, Kistle figures that would bring the cost of liquefied natural gas (LNG) up to US$14-15 per mmBtu (after including the fixed cost associated with building a regassification plant).
"What happens if we don't build as much gas, but we build a power plant that allows us to do more and more renewable energy?" asked Kistle rhetorically. "(The cost of running) a power plant that allows us to do more renewable is going to go up (with fuel cost), but every time we get above that hurdle that justifies building a new renewable energy plant, we can. We can do this over a very long time."
Currently, JPS's 32 MW of wind and hydro power combined with Wigton's 38.7 MW brings the total installed renewable capacity to just over 70 MW.
Another 78 MW is scheduled to come on stream by next year, with BMR's 34 MW wind farm, Wigton's additional 24 MW project at Rose Hill, and Content Solar's 20 MW planned project to be located close to Content Village in Clarendon.
What's more, Energy Minister Phillip Paulwell said that he has signed 166 licences for private individuals to supply electricity to the national grid under net billing contracts with JPS. Their combined capacity totals over 2.6 MW, according to Paulwell.
That should bring renewable energy sources up to 150 MW, or 15 per cent of the total installed capacity in Jamaica within two years.
Kistle reckons that to maximise the benefit from renewables, new gas-fired generation needs to be able to start and stop quickly, ramp up (power) and ramp down quickly, and be very cheap to start and stop.
He speaks with a certain degree of authority, having spent the last three years, before joining JPS in April, on a project developing 3,500 MW of fast-start, flexible generation to integrate renewable energy in California.
"What happens when renewable energys enter the system? Solar might come on slowly, but it ramps up quickly then ramps down very quickly, then it dies out," he told the Business Observer in an interview. "Plants have to move very, very fast."
For example, if Content's solar farm which is to be placed in a single location is suddenly covered by clouds during sun-peak hours, "we lose 20 MW of power, just like that", at a time when the demand for electricity is around 580 MW, according to Kistle.
Large swings in power output on the grid, or sudden jumps in consumption of electricity can affect the frequency of the system, which is kept at around 50 hertz (Hz). But too large a change, and the system might drop below its capacity to regulate itself resulting in load shedding.
"Intermittency (such as wind farms turning on and off as the wind blows) can create significant instability to the system," said Kistle, who said that old generators can be re-purposed to provide voltage support and ramping services, to quickly respond to renewable energy supply rapidly coming on and off the system.
"The long-term solution clearly is to reduce the dependency on fossil fuel and energy efficiency," said the JPS executive. "It's not one solution, but it's definitely not base load.
"The answer to all of this, is to build a smaller, more flexible power plant that enables continued penetration of renewables, and repurpose existing facilities to provide system stability. That's what we want to try to do."
The light and power company hit the ground running for a new expansion plan when it became clear that the proposed 381 MW generation expansion project was going off track.
Two months later, and over US$2 million spent, JPS has already: started talks with a turbine manufacturer; negotiated several equipment options, applied for a permit to install a smaller power plant than the 360 MW it previously got permission to build; commenced work on its integrated resource plan; and completed its system stability study, engineering and procurement work on its equipment solutions.
"We are bringing some certainty around the ability to deliver, and deliver on a schedule that makes sense," declared Kistle.
Apart from introducing rapid response combined cycle (R2C2) gas turbine for greater efficiency, speed and flexibility in ramping time, the senior VP wants to examine fuel flexibility as well.
"I really like the idea of not being married to one fuel, but having a system that can be versatile enough to accept multiple gas sources," he said. "Conditions might arise that makes butane and propane cheaper than LNG.
"This allows the island to respond to fuel price volatility and not be married to one fuel."