Aside from the many environmental and health issues that coal or coke fired plants present, even with the new technology of “clean coal”, there are other costs that will play a major part of which energy source will be used to supply the Alpart project in Jamaica.

First, let’s look at coal and the worldwide supply and demand. Currently, as nations have become more proactive in the reduction of greenhouse gases that contribute to climate change, the demand for coal has dropped, not risen. The cost of getting coal out of the ground far exceeds its worth on the open market. This has led to many closures of coal operations the world over as companies can no longer absorb the cost and loss. The coal companies are also trying to rebrand in calling new plants “clean coal”. There is no such thing as clean coal.

The cost of building and then maintaining a coal-fired plant in Jamaica would be cost prohibitive for any investor.

Several costs have to be looked at which include: cost of converting or building of a coal-fired plant. Some of the more recent coal-fired plants that are proposed, or are under construction in developing nations, have seen the projects balloon in costs by double the amount projected just a few short years ago. Examples of these cost increases can be seen in India to Africa and beyond. Many developing nations that have current projects underway are now questioning the costs of these new coal-fired plants construction as compared to a cleaner method and more cost-effective way of energy production.

Jamaica does not have a coal supply like that of other developing nations, which means that coal or coke would have to be imported. This also adds to the cost of energy production and means that a coal-fired plant would have a higher per kWh cost than that of natural gas. By comparison the amount of coal it takes to generate power per kilowatt hour (kWh) is far greater than even petro products, and is far less efficient than other energy sources according to the US Energy Information Administration.

Power plant heat rates (for steam electric generators in 2014)

Coal = 10,080 Btu/kWh

Natural gas = 10,408 Btu/kWh

Petroleum = 10,156 Btu/kWh

Fuel heat contents (for fuels received by electric power industry in 2014)

Coal = 19,420,000 Btu per short ton (2,000 pounds)

Note: Heat contents of coal vary widely by types of coal.

Natural gas = 1,029,000 Btu per 1,000 cubic feet (Mcf)

Petroleum = 5,867,946 Btu per barrel (42 gallons)

Note: Heat contents vary by type of petroleum product.

Looking at Alpart alumina production and a coal-fired plant looks even worse.

“With major regions struggling to show better economic activity, it is not surprising to see aluminium premiums continue to sag worldwide.” (Source:

aluminum.org July 29, 2016). This coupled with a coal-fired plant in Jamaica to run Alpart would price the products out of the market. This would also make it impossible for investors to recover their investments and post profits. From an investment standpoint, the coupling of coal and bauxite would not give any investor any returns and would post year after year losses. This is not what investors look for in business.

For Jamaica some of the largest companies have tried with the bauxite industry and failed. This is in part due to the cost of production and the required energy for production. This does not mean that a company with a solid plan for reducing the cost of production and energy supply can’t make it work. It can, but only if the right energy mix is used to support the industry supply and demand.

In July 2014 the former owners of Alpart looked at Ethane as a means of energy production at the facility, not coal or coke. This suggests that Rusal might have also known that it would not be financially feasible to use coal/coke as a method of energy production for the facility.

The production of bauxite is almost parallel to that of the coal industry and is not showing signs of any upswing in the foreseeable future, according to the trade publications, studies and projections available. Both coal and bauxite currently show that there is a glut on the market that is keeping both in the lower spectrum of profitability when coupled together as an energy source for production.

The amount of fees that any company that exports out of Jamaica are assessed and become payable to the Government of Jamaica is a whole other concern. These fees have been an issue with the other companies working with bauxite in Jamaica over the years, and many have stated that they cannot make a profit. Thus the industry has withered as investors divest their holdings in Jamaica with this industry.

The bottom line

A coal-fired electrical plant in Jamaica is not cost-effective due to:

1) costs of construction and maintaining a coal-fired plant

2) increased cost associated with the importation of coal

3) the cost of bauxite production and coal as an energy source for that production prices the products out of the market

4) the fees or levies imposed by the Government of Jamaica add to the costs and again price the product out of the market

5) A coal-fired plant in Jamaica does nothing to end energy poverty seen across the island.

In a report published by the Institute for Energy Economics and Financial Analysis, they had this to say:

“Even large economies are having trouble making the coal-as-economy-builder model work. In India, electricity tariffs from coal-fired generation are too high for most households. In China, the high financial price of coal-powered electricity has been spread through its economic system. The price, however, is increasingly apparent in the economic blowback from environmental damage. Russia has similar problems and the US coal-fired electricity market becomes less and less competitive with other sources of energy as each day goes by.”

They concluded by stating: “The challenge to the coal industry globally, and to local economies that are built on coal, is [that] the energy economy alternatives did not exist when coal was king. As the price of solar and wind come down, countries that have for years grappled with volatility in the pricing of fossil fuels now have another way to fuel growth and manage their energy economies.”

The environmental and health impacts of both coal and red mud (a by-product of bauxite processing) are widely known. On this front, Jamaica cannot afford anymore damage to the environment nor put at risk the health and safety of the people. The total costs associated with a coal-fired energy plant for the bauxite industry in Jamaica are too high any way that they are looked at.

Steven G Smith is World Bank certified in climate change adaptation and mitigation finance . He is also president/co-founder of Peralto JADE Foundation Inc — a US-based NGO/non-profit working for the betterment of all Jamaicans.