Caribbean Energy Information System (CEIS) March 2012 increased with any increase in electricity costs.
One of the most important things to modern living is electricity. Life without electricity would be unimaginable, particularly for the more developed countries of the world. In the Caribbean and other parts of the world electricity allows for the lighting of houses, streets, buildings/offices; it provides heating/ cooling and powers most equipment used in factories, offices and homes. Electricity is vital for the survival of economies however it is the singlelargest cost to business in the Caribbean. This is largely attributable to the cost of the fuel used for the generation of electricity in Caribbean countries. Approximately 30% of Caribbean countries energy imports are consumed by the electricity sector with Diesel and Fuel Oil being the generation fuels of choice. Caribbean countries are seeking to build their economies, reduce poverty and develop their infrastructures. Efforts in this regard, in itself, increases the demand for the most vital resource required for modern living which ultimately increases the demand for the fuels used in electricity generation. Notwithstand-
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ing the negative environmental impacts, Diesel and Fuel Oil are fossil based fuels which continue to dominate usage in the Caribbean electricity sector. This comes at a high price and also concerns with demand and supply impacts the region. In most Caribbean countries, prices per kilowatt hour of electricity varies with any increase in generation fuel prices and these prices are passed directly to the consumers in what is called a fuel surcharge component on electricity bills. This increases the burden on the economy to find scare foreign exchange resources to purchase fuel. What ultimately occur is referred to as a ripple effect or domino effect on businesses and citizens of a country whereby the cost of every single good or service is
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Bearing these realities in mind, countries in the Caribbean that are highly dependent on expensive Diesel and Fuel Oil for electricity generation are seeking to diversify their energy mix with cheaper more efficient fuels. In the more developed countries of the world, electricity
continued on page 2/ CONTACT US
Caribbean Energy Information System Scientific Research Council Hope Gardens, Kingston 6, Jamaica 1-876-927-1779 (Telephone) 1-876-977-1840 (Fax) ceis@src-jamaica.org www.ceis-caribenergy.org
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 : March 2012
PROS & CONS: COAL FOR GENERATING ELECTRICITY IN THE CARIBBEAN...continued from page 1/ generation is not dependent on the two common fuel sources used in the Caribbean. The two most prominent options used in regions such as the United States, Asia and Europe are Natural Gas and Coal which are both fossil fuels and are considered cheaper and more cost effective to utilize. These fuels although providing economic opportunities for electricity generation have some negative implications. Despite these negatives, Caribbean nations having the necessity to reduce electricity cost have been giving much thought to the use of these fuels. In this issue of the Caribbean Petroleum Update, we will assess some of the pros and cons associated to the use of Coal for electricity generation. Coal Coal usually referred to as the “Black Diamond” is a fuel formed through a process called “Coalification.” This is basically the continual decay, compres-
sion and burial of Peat (plant roots, barks, etc.) by sediments over an extended period in an environment where heat is added thereby causing the complex hydrocarbons in the Peat to breakdown and alter in a variety of ways. The stages of this trend proceed from plant debris through peat, lignite, sub-bituminous coal, bituminous coal, anthracite coal, to graphite (a pure carbon mineral). In the past many considered coal the most impure fuels largely due to the fact that it contains large quantities of sulfur and other impurities including heavy metals such as uranium, thorium, aluminum, mercury and iron. A 1,000 MW coalburning power plant is said to release as much as 5.2 tons/year of uranium (containing 74 pounds of uranium-235) and 12.8 tons/year of thorium. The radioactive emission from this coal power plant is 100 times greater than a comparable nuclear power plant with the same electrical output; including processing output, the coal power
Fig 1
plant's radiation output is over 3 times greater. However, in recent times, technology has allowed for reduced environmental impact during the burning process. Coal is converted to electricity by first milling the coal into a fine powder thereby increasing the surface area which allows it to burn more quickly. The type of system where this powder is used is called a Pulverized Coal Combustion (PCC) System. The powdered coal is blown into the combustion chamber of a boiler where it is burnt at high temperature producing hot gases and heat energy (See Fig 1). The hot gases and heat energy produced converts water contained in tubes lining the boiler into steam. The pressurized steam is used to push thousands of propeller–like blades on a turbine shaft with a generator mounted at one end with wounded wire coils. Electricity is generated during the rapid rotation. The generated electricity is transformed into voltages up to 400,000 and transmitted via power lines where it can be broken down to lower and safer voltages (100-250 volts) for consumption in the domestic market. Burning of coal releases Carbon Dioxide and other pollutants such as sulfur, adding to the greenhouse gases in the atmosphere. The combination of sulfur with moisture in the atmosphere forms sulfuric acid and when it rains, causes "acid rain". The acid can lower the PH levels in lakes and ponds sufficiently so that fish and other aquatic life forms cannot survive thereby continued on page 3/
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PROS & CONS: COAL FOR GENERATING ELECTRICITY IN THE CARIBBEAN...continued from page 2 impacting the human eco-system. With this in mind, Caribbean countries that depend heavily on fishing and farming would need to ensure that if a Coal powered plant is established in their country efforts are made to prevent ash in disposal landfills from contaminating aquifers through groundwater infiltration as this could impact the very survival of inhabitants. However, despite the negatives mentioned, coal is considered one of the most efficient fuel sources largely due to the price (approximately US$60/ Short Ton), the large reserves and readily available supply. Coal can be easily stored and does not require special pipelines and dedicated supply routes. Approximately one ton of the coal used in a Power Plant generates about two megawatt hours of electricity i.e. it takes approximately one pound of coal to generate one kilowatt hour of electricity which would approximate to a generation rate of US$0.03/kwh. Looking at this rate comparatively with rates that are in the range US$0.15 – US$0.40/kwh the financial gains are impressive. In the United States (US), over 50% of the electricity generated is produced through the use coal - most of which is produced locally. This means that with the U.S being so close to the Caribbean there is a likely chance that access to the raw material may not be a problem to Caribbean Countries. The eighteen CEIS Network member countries together currently have a total electricity installed capacity of approximately 13000 MW. If you do the math to identify the cost of the raw material to meet the full generation capacity for these countries; it is likely that you will
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find such cost to be significantly lower when compared to the conventional fuel sources used for electricity generation in the region.
Caribbean in reducing electricity cost thereby stimulating economic growth for Caribbean countries. Apart from the financial gains in electricity generation, other advantages from the use of coal include manufacturing metal products, ceramics, paper, cement and chemicals. Ethylene and methanol, which are sometimes manufactured using Coal gas, are utilized in the production of products like tar, fertilizers, various medicines and plastics. There are also specific industries that use a large amount of Coal such as paper manufacturing and cement manufacturing. Jamaica has been looking at the use of coal in the Cement Industry. Caribbean Cement Company of Jamaica has plans to establish a 30MW coal generated power plant to offset fuel cost (expected savings of US37M/Yr). The location for the plant has been identified in close proximity to a port of entry where the raw material can be easily off-loaded and transported to the identified plant site. If plans by the Jamaica Public Service to use LNG to reduce electricity cost were not to materialize, the Jamaica Public Service could also utilize Coal as fuel source instead of Diesel and HFO. This would provide greater savings to the consumer. Other countries such as Dominican Republic having large industries, if desirous of reducing electricity cost could look at Coal as a part of their energy mix bearing in mind the environmental impacts. It is also imperative that careful thought be given to the pros and cons associated with the use of this abundant, cheap and efficient fuel source before action is taken to establish a Coal fueled power plant in the Caribbean.ď‚Ą
There are other advantages and disadvantages of coal; however, the ones mentioned above are the most common ones. Although coal is very useful for several things, like many other sources of energy it does have its drawbacks. However, improvements in efficiency of Power Plants can reduce the impacts on the environment. Improvements in conventional PCC power station design and new combustion technologies can allow more electricity to be produced from less coal. This is known as improving the thermal efficiency of the power station. Efficiency gains in electricity generation from coal-fired power stations will play a crucial part in reducing global CO2 emissions. It is believed that a one percentage point improvement in the efficiency of a conventional PCC plant can result in a 2-3% reduction in CO2 emissions. In addition to reduced emission of carbon dioxide per megawatt (MW), PCC plants are also more ideal to retrofitting with CO2 capture systems. Efficiency improvement is currently the focus in the coal industry as this is one way of reducing the environmental impacts associated with the use of Coal. The current technology being promoted for coal generated electricity is higher efficiency supercritical and ultra-supercritical plants through the wider use of Integrated Gasification Combined Cycle (IGCC) systems for power generation. These systems could reap significant benefits for the
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Call: 1-876-927-1779 | Caribbean Petroleum Update : March 2012
CARIB PETROLEUM NEWS & HAPPENINGS ARUBA
GRENADA
Oil refinery in Aruba suspends operations >> 21/03/2012
Former minister calls for electricity deregulation in Grenada>> 30/03/2012
GLF offered to expand deal >> 20/03/2012 Valero To Suspend Refining Operations At Aruba >> 19/03/2012
GUYANA Guyana gets US technical, capacity building help for oil, gas industry >> 01/03/2012
BAHAMAS No application for oil drilling in Bahamas, says Chinese embassy >> 17/03/2012
JAMAICA Jamaicans to pay more at the pumps tomorrow >> 21/03/2012
BELIZE Energy company strikes oil on first well on Belize concession >> 13/03/2012
Russians interested in setting up ethanol plant in Jamaica >> 05/03/2012 Gas station operator happy to serve Oracabessa >> 03/03/2012
CUBA Bill on oil prospecting in Cuba waters considered by US Congress >> 26/03/2012 Cuba resumes domestic production of aviation fuel >> 05/03/2012
ST LUCIA Big Decisions for Hess Oil GIS Saint Lucia >> 26/03/2012
INTERNATIONAL CURACAO
Research and Markets: Valero Energy Corporation: SWOT Analysis & Company Profile >> 29/03/2012
Caribbean island Curacao faces oil refinery dilemma >> 14/03/2012
Gas prices continue upwards >> 22/03/2012 Oil drops on Saudi supply promise >> 21/03/2012 Oil slides on growth prospects, less tension over Iran's nuclear programme >> 07/03/2011 BP reaches US$7.8 billion deal >>03/03/2012ď‚Ą
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REGULAR UNLEADED GASOLINE AVERAGE PRICES AT THE PUMP March 2012 Retail prices for Regular Unleaded Gasoline in the sixteen Caribbean countries reviewed at the end of March 2012 remained relatively stable in five countries. Marginal decreases were seen in Jamaica and St Vincent/Grenadines whilst marginal increases were seen in nine countries in the range of .08% and 1.05% when compared to the previous month. The average retail price at the end of March 2012 for the product over the sixteen countries when compared to the average retail price seen in December 2011 remained relatively the same.
Regular Unleaded Gasoline Average Retail Price (US$/Litre) 2012 3 Mths AVG 1.23 1.38 1.60 1.45 1.27 1.15 1.28 1.08 1.28 1.23 1.24 1.22 1.16 1.44 0.42 1.59
JAN
FEB
MAR
ANTIGUA/ BARBUDA BAHAMAS [91 OCT] BARBADOS BELIZE [87 OCT] B.V.I [87 OCT] DOMINICA GRENADA (95 OCT) GUYANA JAMAICA 87 Octane[E10] MONTSERRAT ST. KITTS/ NEVIS ST. LUCIA ST. VINCENT/ GRENADINES SURINAME [95 OCT] TRINIDAD/ TOBAGO [92 OCT] TURKS/ CAICOS
1.23 1.33 1.55 1.41 1.26 1.12 1.24 1.06 1.27 1.19 1.20 1.21 1.19 1.40 0.42 1.58
1.23 1.35 1.59 1.45 1.27 1.14 1.28 1.08 1.30 1.21 1.19 1.22 1.16 1.43 0.42 1.58
1.23 1.44 1.66 1.51 1.29 1.19 1.32 1.09 1.28 1.29 1.32 1.22 1.13 1.49 0.42 1.61
CHART:
Comparative Retail Pump Prices Regular Unleaded Gasoline
COUNTRIES
MARCH Avg vs 3 Mths Avg (Jan - Mar 2012)
1.80
US$/Litre
NOTE: *US Gallon = 3.785 L *Imperial Gallon = 4.546 L *As at November 1, 2009 MTBE was phased out from all gasoline blends in Jamaica and replaced with 10% Ethanol.
1.60
MAR
1.40
AVG
1.20 1.00 0.80 0.60 0.40 0.20 0.00
16 Caribbean Countries
See prices for other products at www.ceis www.ceis--caribenergy.org . C
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Call: 1-876-927-1779 | Caribbean Petroleum Update : March 2012
Average Weekly & Monthly Crude Oil Prices (January ď §March 2012)
110.00
107.54
108.00
107.18
US$/BBL US$/BBL
106.00 104.00
102.39
102.00 100.00 98.00 96.00
Jan-12
Feb-12
WK 3 Period
WK 4
94.00
Mar-12
92.00
WK 1
International Crude Oil prices over the period January to March 2012 indicated instability in the oil industry with prices seen at approximately US$97.50/BBL in February then escalating to a year to date high of US$107.54/BBL in the first week of March. Since then, prices have remained above US$106/BBL. Caribbean consumers a very concerned with this trend. When oil prices for the period examined (Jan—Mar) were compared with the same period last year, prices were seen at a low of US$84.39/BBL (Feb. 2011) and a high of US$104.34/BBL (mar. 2011).
WK 2
Mth Avg
Average Monthly World Crude Oil Prices (2009 - 2011) 109.61
108
US$/BBL
98
88.14
88 78
76.19
68
58 48
2009
2010
2011
38
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Jan
Feb Mar Apr May Jun
Jul
Aug Sep Oct Nov Dec
Period
Caribbean Energy Information System (CEIS) primary report of historical annual petroleum energy statistics provided for 18 Caribbean Countries. Included are data on total energy production, consumption, and trade; overviews of petroleum, natural gas, electricity, as well as financial and environmental indicators for over twenty years.
Yr Avg
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