Robertson sidelines ethanol in renewable energy push

BY PATRICK FOSTER Business reporter fosterp@jamaicaobserver.com

Wednesday, June 30, 2010

ENERGY Minister James Robertson yesterday dismissed ethanol as a prime alternative energy source to help Jamaica reduce it debilitating oil bill in an apparent about-turn on Government's energy policy direction.

"You will not hear me talking about ethanol," Robertson declared at a special meeting held with energy stakeholders at the Observer's Beechwood headquarters in Kingston to discuss the introduction of liquefied natural gas (LNG).

An increased use of ethanol has long been touted by Government as a part of its solution in reducing the island's annual oil bill, which stood at some US$1.4 billion in 2009.

But Robertson argued that a wide-scale conversion of sugar cane to ethanol would affect the production of rum by reducing the availability of molasses, which already is being imported.

"We import 49 per cent of our molasses to go with the 51 per cent locally produced so we can stamp the rum made in Jamaica," said Robertson.

"We are short on molasses," he emphasised.

Robertson instead argued that using sugar cane for bio-mass was a more pragmatic approach in renewable energy sourcing.

Government recently announced the award of a contract to Belgian company Exmar for the construction of a floating regasification unit to convert LNG for supply to the Jamaica Public Service (JPS) and bauxite companies.

The energy minister, in defending the push to introduce LNG, said yesterday that if the fuel was being used from three years ago, savings to the JPS would be approximately US$900 million.

Last year, JPS' fuel bill totalled US$466 million, and the company spent US$140 million on fuel for the first three months of 2010.

However, despite Robertson's sidelining of ethanol, he insisted that LNG's introduction was not at the expense of local renewable energy.

According to Robertson, LNG, being the cheapest fuel now available, has to be used to offset the cost of oil and provide an alternative for the island's base load.

"Renewables are not effective and don't bring down your base load cost," Robertson argued, adding that sources such as hydroelectric and wind, were on the contrary, expensive to produce and inconsistent.

"Your strategy must be to address the base load, which is what [we] are now trying to do," Fitzroy Vidal, senior energy engineer at the ministry of energy, emphasised.

"You are bringing in cheaper fuel and given the opportunity to replace old expensive generators," he added.

At the same time, Pat LaStrapes, representing CH-IV, a company hired to provide technical advice to Government sought to quell concerns about LNG price increasing in response to demand or the world oil price.

"The whole idea of LNG is the reduced cost," he said while insisting that there is no correlation between the LNG pricing and that of crude oil.

Robertson hinged his increase on renewable energy sources on the expected stability in LNG pricing.

"If we lock in LNG supplies for a 20-year contract where the gas is so cheap, the more successful we are there, then more renewables we can bring in," said Robertson.

The use of renewable sources, which stands at eight per cent of the total electricity supply, is projected to be increased to 15 per cent by 2020 and 20 per cent in 2030, according to government's recently released energy policy.

In the meantime, Robertson said that the Wigton Wind Farm, located in Manchester, is expected to be in a profitable position in 24 months.

"Losses of up to $100 million per year which would stop anybody from wanting to invest has been addressed by this policy," said Robertson.

Did you watch American football's Super Bowl on Sunday?
	Yes, but just for the advertisements
	Yes, just for the game itself
	Yes, for both the game and advertisements
	No, I did not watch the Super Bowl.

View Results
Results published weekly in Sunday Finance

Username:
Password: