CARIBBEAN ENERGY INFORMATION SYSTEM (CEIS) FEBRUARY 2014 ISSUE
This issue of the Petroleum Update will seek to highlight the potential of lowering electricity costs using renewables in the Caribbean.
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he Caribbean is not only a tourist haven; these small islands have the potential of leading the charge into a new energy future. In the Caribbean there is extensive solar and wind resources and geothermal potential. In recent reports a number of Caribbean islands such as St. Kitts and Nevis, Dominica and St. Vincent and the Grenadines have indicated plans to explore geothermal energy, as well as a focus on solar energy.
Although there is a thrust towards renewable energy it is important to bear in mind that the use of fossil fuels will remain a significant source of fuel for a long time. The exploration and inclusion of renewable energies will not reduce the need for imported fuel any time soon. The thrust is an ongoing process and until the region can fully tap into the indigenous resources the Caribbean possess, then we will remain heavily dependent on imported oil. Electricity is a very convenient form of energy that can be generated using renewable and non-renewable resources. Renewable energies include solar, hydro, geothermal and wind energy while fossil fuels include petroleum, coal,
natural gas to name a few. Using fossil fuels contribute to pollution of the environment which adds to the greenhouse effect and on a macro level contributes significantly to global warming. Nonetheless, fossils fuels are used extensively throughout the Caribbean in many sectors such as the transportation and electricity sectors. However, whilst the disadvantage of using fossil fuel include negative externalities such as a polluted environment that can have severe repercussions for one’s health, renewable energy relies heavily on the weather (which can be unpredictable and inconsistent) for its source of supply. For example, wind turbines need wind to rotate the blades, solar technology needs the penetration of the sunlight to collect heat and make electricity and bagasse in only available during cane grinding season. The unavailability of such resources will continued on page 2/
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CARIBBEAN PETROLEUM UPDATE
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is a monthly Bulletin which highlights petroleum issues affecting or relevant to the Caribbean, international developments that may affect the region’s way of life and movements in oil prices and retail prices for fuel regionally.
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Call: 1-876-927-1779 | Caribbean Petroleum Update : February 2014
Lowering Electricity Costs in the Caribbean by using Renewable Energy Sources.……………………….……………………….….continued from page 1 then restrict the capacity to make energy and electricity from renewable energy sources.
JPS Fuel Surcharge Rates 2009-2013 J$/KWh 30.00
The use of renewable energy sources are on the rise in the Caribbean as there are potential benefits to be derived from utilizing these sources. This renewed thrust towards renewable energy is as a result of the environmental and financial benefits outlined above and the fact that Caribbean nations have been plagued with high electricity costs.
25.00
J $/KWh
Notwithstanding this, renewable energy sources do provide some advantages such as promoting a cleaner environment by producing little or no carbon dioxide or other chemical pollutants, reduction in energy costs by importing less fossil fuels and savings of billions of foreign exchange as a result.
20.00 15.00 10.00 5.00
0.00 2009
2010
2011
2012
2013
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Chart 1: Jamaica Public Service Company Fuel Surcharge Rates from 2009-2013
For most Caribbean countries, the cost of energy takes up a significant portion of their balance of payments and their foreign exchange earnings. This has plagued Caribbean countries for decades and now renewable energy sources have the potential to pave the way into a new energy future. However, until the Caribbean can fully utilize the indigenous resources they have, countries will continue to be heavily dependent on fossil fuels to generate electricity and run their economies. The Jamaica Public Service Company (JPSCo) does incorporate the use of renewable energy sources in the generation of electricity to its customers, however, the share of renewable energy technologies is not enough to manage the maximum demand for electricity on the grid, however, it does contribute to a reduction in fuel costs by reducing the demand for fuel by power plants. Currently, the JPSCo provides power to the grid via their wind farm and hydro facilities. Hydro contributes a maximum of 22MW while wind energy (wind farm commissioned in 2010) contributes 3MW. In addition, the Wigton Wind Farm (commissioned in 2004 and 2011) contributes 38MW to the grid.
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Wigton Windfarm in Manchester (PCJ image)
With the addition of the two wind farms mentioned above, in addition to the hydro facilities, JPSCo’s fuel consumption decreased in 2011 by 2%, this reduction is as a result of the reduced demand for fuel, however fuel surcharge rates increased by 33% in the same year. The JPSCo’s average surcharge rates between 2009 and 2013 increased by 99%. This increase though is unavoidable as surcharge rates increase are as a result of increases in oil prices. With this
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continued dependence on imported fuel, the electricity bills of customers will continue to reflect this surcharge component. This charge to the customer combines two factors; these are the cost of generating electricity and the cost of electricity purchased from Independent Producers which contribute a third of the electricity to the grid. Fuel cost is by far the largest contributor to fuel charges. The JPSCo needs on average approximately twenty thousand barrels of oil per day to meet their daily electricity demand island wide. The company also introduced Net Billing which allowed JPSCo’s customers who own renewable energy generators to generate electricity for personal use and sell any excess energy to the grid. Renewable energy generators included wind turbines and photovoltaic systems. On a micro level, despite the high costs of setting up photovolataic systems net billing has contributed to a reduction in some customers electricity costs. However, the untapped macro potential of solar energy can afford countries in the Caribbean import substitution where billions of foreign exchange can be saved, an improvement to the balance of payments, a reduction in debt under the PetroCaribe agreement, a cleaner environment and the protection of our tourism product. Apart from the great potential of solar energy in the Caribbean region, there are great prospects in geothermal energy. The difference between geothermal and solar is that geothermal energy supply tends to be less intermittent. The Eastern Caribbean Islands such as Saint Lucia are positioned geographically on two continental plates where high temperature reservoirs are found as a result of volcanic activity. The transition however may not be as smooth despite the apparent resource base, as drilling and the construction of geothermal plants will prove expensive and will require significant investments.
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fossil fuel significantly. Other countries that have showed interest in the use of geothermal energy include Dominica, Nevis and Montserrat. As a way to reduce energy costs, many countries in the Caribbean have begun to extensively explore renewable energy as the price of fossil fuel has been on the rise. With the introduction of solar powered streetlights in some Caribbean islands like Trinidad and Tobago, it is speculated that electricity cost to the governments will be significantly reduced. However, despite significant research being carried out in this area, if this is not done on a large scale the impact on electricity costs will be minimal. Using renewable energy sources can reduce electricity costs; however, the impact might be minimal on a country if it is not used on a large scale. Caribbean countries continued heavy reliance on fossil fuel is due to the fact hat the current cost of renewable energy technology requires extremely large capital costs far in excess of the traditional fossil fuel generation and as such large investments are needed to propel the drive to a renewable future. The costs for renewable energy technologies are prohibitive for consumers and as such the direct impact of renewable energy sources on reducing electricity costs on a micro level will be minimal. Nonetheless, consumers can play a significant role in reducing electricity costs by practicing energy conservation. However, the general thrust towards a greener future will have to be approached on the macro level with the utility companies and the governments in the Caribbean playing a collaborative role in using and promoting the use of renewable energy sources. The promotion of a cleaner environment and the use of indigenous energy sources provide reasonable grounds for incentives to encourage the use of renewable energy. 
St.Lucia has begun exploring the potential of geothermal energy to reduce the need for imported fossil fuel. Currently, exploratory drilling has begun in the Piton Management Area guided by studies conducted by the geothermal facility located in the Sulphur Springs. Studies have highlighted that geothermal energy in St. Lucia has the potential of reducing the country’s reliance on
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Call: 1-876-927-1779 | Caribbean Petroleum Update : February 2014
PETROLEUM NEWS & HAPPENINGS JPS Still Negotiating Bogue LNG Deal [...]...Read more Cuba near completion of biggest fuel-oil power plant [...]...Read more Cuba completing third power plant in Ecuador [...]...Read more Trinidad to implement new natural gas master plan [...]...Read more
Gasoline still being delivered, JGRA president says [...]...read more Tanker Drivers Threaten Disruption, New Haulage Rates Still Pending [...]...Read more Venezuela-Cuba alliance’s shaky future fuels debate [...]...Read more Mexico to surpass Japan as No 2 car exporter to US [...]...Read more IDB launches Caribbean Energy Initiative to tackle high costs [...]...Read more
Jamaica Takes Measures to Eliminate Harmful Vehicle Emissions [...]...Read more EXMAR chooses Ecospeed to coat the hull of its first-of -a-kind floating LNG liquefaction and storage unit, the Caribbean FLNG [...]...Read more BHP Billiton to invest US$1b in T&T exploration [...]...Read more OUR Bound to Silence On EWI Due Diligence [...]...Read more Monitoring Committee Wants EWI Decision Clearly Thought Through [...]...Read more OUR Going Back To Market [...]...Read more
Police Investigates Illegal Oil Storage In Sucker Garden [...]...Read more When The River Sounds Oil? [...]...Read more Shell Helix Presents New High Mileage Lubricant Portfolio [...]...Read more Trinidad & Tobago’s oil and gas production to increase medium term [...]...Read more World’s Oil will run Out in Ten Years [...]...Read more Fuel Emission Reduction Policy [...]…Read more
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Caribbean Petroleum Update : February 2014 | Call: 1-876-927-1779
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REGULAR UNLEADED GASOLINE AVERAGE PRICES AT THE PUMP FEBRUARY 2014 Retail prices for Regular Unleaded Gasoline in the twelve Caribbean countries reviewed at the end of February 2014 showed marginal decreases in prices for Grenada, St.Lucia, St.Vincent and the Grenadines and Suriname between 0.4% and 1%. Prices in Antigua and Barbuda, Belize, Monsterrat and Trinidad and Tobago remained stable. Prices in Bahamas, Barbados, Dominica, and Jamaica increased, however Barbados experienced the highest increase of 1.7% . Regular Unleaded Gasoline Average Retail Price (US$/Litre) 2014 COUNTRIES
JAN
FEB
2 Mths Avg
ANTIGUA/ BARBUDA
SURINAME [95 OCT]
1.23 1.36 1.54 1.42 1.15 1.26 1.23 1.25 1.32 1.08 1.39
1.23 1.37 1.57 1.42 1.16 1.25 1.24 1.25 1.31 1.07 1.37
1.23 1.36 1.56 1.42 1.15 1.26 1.24 1.25 1.31 1.08 1.38
TRINIDAD/ TOBAGO [92 OCT]
0.42
0.42
0.42
BAHAMAS [91 OCT] BARBADOS BELIZE [87 OCT] DOMINICA GRENADA (95 OCT) JAMAICA 87 Octane[E10] MONTSERRAT ST. LUCIA ST. VINCENT/ GRENADINES
NOTE: *US Gallon = 3.785 L *Imperial Gallon = 4.546 L *As at November 1, 2009 MTBE was phased out from all gasoline blends in Jamaica and replaced with 10% Ethanol.
See prices for all products at www.cippet.org
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Call: 1-876-927-1779 | Caribbean Petroleum Update : February 2014
International Crude Oil Prices ended the three month period December 2013 to February 2014 with an average price per bbl of US$100.93. Prices in February 2014 was 3.4% above December 2013 average and 6.8% higher than the average price in January 2014. The highest weekly price seen in February for the commodity was US$102.93/bblreflected in week three while the lowest price for the three month period was in January of US$92.42/bbl. The increase in crude oil prices is attributed increased stockpiling of the commodity in the United States and speculation surrounding future increases in inventories. .Featured
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