Jamaica must seek other energy sources by 2015

— Says Dr Raymond Wright

By TANESHA MUNDLE Observer staff reporter mundlet@jamaicaobserver.com

Saturday, October 09, 2010

DR Raymond Wright, consultant to the Petroleum Corporation of Jamaica (PCJ), has cautioned that Jamaica will seriously have to turn to renewable energy as its main source of electricity by 2015 when the price of gas is expected to increase significantly.

Wright, speaking at the Lions Club of Kingston luncheon at the Jamaica Pegasus on Wednesday, said that Jamaica's dependence on oil is presently around 91 per cent with a consumption rate of about 60,000 barrels of oil per day.

However, he said that based upon expert predictions, oil production is expected to peak in terms of its availability between 2015 to 2020, when oil resources gradually will begin to deplete and will result in a considerable increase in the price of oil.

"Today oil prices hover around US$80 a barrel but we expect that it will move gradually by year-end to approximately US$85 a barrel," he said.

"But the fact of the matter is that by 2015 the new platform for the price of oil per barrel will be at US$100 and more, so the age of cheap oil has ended and we therefore have to look to other resources that will be competitive in respect of oil," Wright added.

Despite the country's heavy dependence on oil, nine per cent of Jamaicans use renewable energy from sources such as wind, solar, hydro and ethanol, he said.

However, at the moment he said that the country has decided to turn to liquefied natural gas (LNG), as an alternative to oil. That project he said should begin by 2013.

"The LNG project is now significantly advanced," he said.

But Wright said that there were three important components that would have to be addressed in order for the project to be a success.

The first is the issue of the source, which will either be from Trinidad & Tobago or Venezuela or from the Middle East, while the second is the high cost associated with the provision of the infrastructure, which is needed to store the gas, Wright said.

As planned, a floating offshore platform, which is expected to cost US$600 million, will be used.

The third component, he said was to settle the issue of purchaser of the gas. Potential buyers include the Jamaica Public Service Company (JPSCo) and Jamalco.

But Wright, who declined to comment on JPSCo's failure to sign a commitment as a potential buyer, said that a company might become hesitant to sign because of certain uncertainties.

Nevertheless he said "this project will probably come on stream in 2013 and at that particular time once it gets in the electricity sector we will see the retirement of some of the generating capacity of the older generating plants of JPSCo and we will now see cheaper fuel.

"We expect that by 2013 and beyond we will begin to see a reduction in the electricity cost which is an imperative for Jamaica's economy that energy cost be stable," Wright said.

In the meantime, he said that it is important for the country to develop all its indigenous energy resources to the maximum extent where they are economically viable.

He said that the search to find oil and gas still continues but as a long-term project and as a result the focus now is to develop the domestic renewable energy resources such as wind, solar hydropower, waste to energy, ocean thermal energy conversion (OTEC) energy and other marine sources.

As it relates to wind energy, he said that the 20.7MW Wigton Wind Farm in Manchester will be expanded by a further 18MW by 2011 in addition to the commission of a 18MW wind farm at Hermitage, St Elizabeth by December.

Wright also reiterated that there were plans to develop waste-to-energy programmes at Riverton Landfill in Kingston and at Retirement Landfill in St James, which will provide between 70-75 MW of electricity.

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