Jamaica Public Service (JPS) to build 150MW plant...
to be fuelled by coal
By Camilo Thame
Jamaica Gleaner
Kinstown
Petroleumworld.com 09 24 06
Jamaica
Public Service (JPS), whose net profits topped $1.4
billion, plans to build a 150 megawatt (MW) coal-fuelled
power plant to cut back on the cost of generating
electricity for the national grid.
But,
having already purchased the land in Old Harbour,
St. Catherine, where the plant will be located,
the local light and power company has agreed to
push back construction by nearly four years to accommodate
taking on an additional 85 MW to the grid from Jamalco's
liquefied natural gas (LNG) plant expected in 2009.
Yesterday,
JPS said it was still in the process of pricing
the development, but industry estimates would place
the cost of the plant at about US$300 million.
"We
(JPS) are going to construct a 150 MW coal-fuelled
power plant," JPS chief executive officer Damian
Obiglio told Wednesday Business after the company's
annual general meeting at its corporate headquarters
in New Kingston.
"We
have already bought land for the plant, located
beside our existing Old Harbour Power Plant and
we are currently working on environmental approval."
It
was unclear yesterday whether the pending sale of
JPS by Mirant, which owns 80 per cent of the power
provider, would affect the project.
Obriglio
said it would be another year before the sale is
finalised.
Information
memorandum
"At
this stage, the company (JPS) is still producing
the information memorandum, which is a summary of
all assets in the Caribbean. That has not been released
to any potentially interested parties," he
said.
JPS'
decision to use coal stemmed from a decision made
by the former P.J. Patterson administration at the
beginning of 2006 to recommend the allowance of
the construction of a 120 MW coal plant, in its
goal to diversify energy sources used to generate
electricity.
It
was the Government's thrust to diversify that led
to JPS pushing back the coal plant project and increasing
its capacity by 30 MW.
"It
was scheduled for 2008, but the Government asked
us to accomodate Jamalco's LNG (liquified natural
gas) plant of 85 MW scheduled to come online in
2009," Obriglio said.
"The
coal power plant has therefore been pushed back
to 2012."
Jamaica's
energy mix is largely made up of petroleum liquid
burning power plants, with only 5.3 per cent generated
from renewables - hydroelectric (2.7 per cent) and
wind (2.6 per cent).
Combined
generating capacity has reached 817 MW, a whole
200 MW or 32 per cent higher than peak demand.
JPS'
electricity sales have grown by about 2.7 per cent
a year over the last six years, which means that
should demand keeps in line with sales growth over
the next six years, the national grid will need
another 110 MW, or 25 MW more than Jamalco's LNG
plant, by 2012 to maintain reserve margin.
The
cost of a typical coal fired plant runs at about
one and a half to two times the cost of typical
gas fired combined cycle plant, or about US$1,500
- US$2,000 per kilowatt, which would place the value
of the project at between US$225 million and US$300
million.
The
cost of coal as a fuel is considerably less than
that of petroleum liquids and LNG.
According
to the Energy Information Administration - the US
state agency that supplies official energy statistics
- for the four months to April 30 2006, the average
price paid for natural gas by electricity generators
was US$7.72 ($502) per million British thermal units
(MBtu), an increase of 17 per cent from the same
period in 2005.
Heavy
fuel oil prices rose by 44 per cent to US$7.95 ($517)
per MBtu, during the four month period, when compared
to the corresponding period last year.
Coal
prices, by comparison, averaged US$1.68 ($111) per
MBtu for the quarter, up 12.4 per cent from the
corresponding period in 2005.
One
MBtu is equivalent to 293 kilowatt-hour of energy.
This
means that the fuel required to produce one kilowatt-hour
(kWh) of electricity cost on average J$1.84 when
using natural gas and $1.89 when using liquid petroleum
during the first three months of 2006. For coal,
the cost was 40 cents for each kWh produced.
Jamaica
Gleaner
September 20, 2006
Copyright
©1997-2006 Gleaner Company Ltd. All Rights
Reserved.
