CEIS Petroleum Update October 2011

Caribbean Energy Information System (CEIS) October 2011

As we strive to improve our quality of life a lot of focus is being placed on the use of technology. In this quest to improve our lifestyle, it is also appearing that the more we use technology, the greater our energy consumption. This should ultimately be the other way around and brings to mind the “seesaw” effect which basically operates a fulcrum by shifting the weight from one side to the other.

This means therefore, that as we focus on the use of new technologies we should ensure that the balance between the use of the technology and the energy consumption remains even or shifted to the side that result in less use of energy.

For humans, energy is a necessity and as a scarce resource, it has been an underlying cause of political conflicts and wars. Many

New solar smart grid technology.

Source: www.inhabitat.com

have their own opinions on the technologies that are developed and used in the energy sector. Two such technologies that have emerged in the quest to efficiently utilize our energy resources are Smart Grids and Net Metering. These two technologies are used in one of the highest energy consuming sectors – the Electricity Sector. In this issue of the CEIS Petroleum Update we will take a look at these technologies, identify some of the potential benefits for the Caribbean, highlight some of the barriers that may have prevented

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use of these technologies in the region and suggest the way forward.

What is Smart Grid?

When we speak of Smart Grid we refer to class of technology that is being used in the Utility Electricity Delivery Systems.

This system is made possible through the use of computerized and automated syscontinued 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 : October 2011 more controllable and reliable. An effective Smart Grid:

Can Smart Grids & Net Metering reduce the Caribbean’s dependence on fossil fuels? continued from page 1/

tems along with two way communication systems through one of the most widely used technology in the 21st century – the Internet. It provides the opportunity for real-time efficient management of our energy both by the consumer and the power provider thereby reducing our energy consumption and the associated cost.

The concept of Smart Grid has been in use since 2005 with the first commercial scale system installed in Italy. Today the technology is increasing in use in the United States and in other parts of the world. Smart Grid offers a lot of valuable features that can be used within the Caribbean on a large scale in the near future to deliver electricity from producers to consumers, control energy flow, reduce losses, and make the performance of the electric network

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 Must be reli-

able to provide power when and where needed and at the quality users value.

Must be secure to withstand and be less vulnerable to attacks (physical and cyber) without experiencing massive blackouts or inflated recovery costs. It must also be secure enough to quickly recover from natural disasters.

Must be economical to operate under the basic laws of supply and demand, resulting in fair prices and adequate supplies for all.

Must efficiently employ strategies that lead to cost control, minimal transmission and distribution losses, efficient power production, and optimal asset utilization while providing consumers options for managing their energy usage.

Must be environmentally friendly in order to reduce environmental impacts thorough improvements in

efficiency and by facilitating the integration of more intermittent resources than could otherwise be reliably supported.  Must be safe enough not to harm anyone and sensitive to users who depend on it as a medical necessity.

The real-time, two-way communications available in Smart Grid will enable consumers to be compensated for their efforts to save energy and to sell energy back to the grid through netmetering.

What is Net Metering?

For people in the Caribbean who have been producing energy through renewable means the term Net Metering is not new and is a very welcomed idea.

This is because net metering is a special billing arrangement which allows the connection of renewable energygenerating systems to the power grid.

A Net Meter operates normally by running forward when a customer uses more power than is being produced.

The opposite occurs when the reverse happens and the excess power is fed continued on page 3/

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Caribbean Petroleum Update : October 2011 | Call: 1-876-927-1779 by ensuring that customers always have a reliable source of energy from the grid during times Can Smart Grids & Net Metering reduce the Caribbean’s when their redependence on fossil fuels? continued from page 2/ newable generators are not prointo the grid. Net metering customers ducing energy, and by providing the are charged only for the “net” power opportunity for the consumer to sell into that is consumed from the electricity the grid any excess electricity that is service provider over a set period or, if produced from the renewable energy their renewable energy-generating system. systems make more electricity than is consumed, they may be credited or paid Potential benefits to the Caribbean for the excess electricity contributed to the grid over that same period at the rate The potential benefits for the Caribbean charged by the Utility Company. from the use of these two technologies are enormous whereby a “transactive environment” would be created thereby 1-ph to 3-ph Bi-Directional Net facilitating financial, information, elecMeters trical transactions and greater use of grid assets among consumers. In simple terms the use of these technologies in the Caribbean could open up markets in ways similar to how the Internet has.

Smart Grid and Net Metering will give consumers information, control, and Source: www.generalpacific.com options that enable them to engage in new “electricity markets.” Grid operaThe billing system provides benefits for tors will treat willing consumers as rethe consumer and the Utility Company sources in the day-to-day operation of the grid. Wellinformed consumPetroleum News & Happenings ers will modify MORE POWER! Gov’t, JPS renegotiate some areas of consumption licence>> 20/10/2011 based on the balancing of their Barbados’ cuts energy usage >> 18/10/2011 demands and resources with the Cuba's offshore oil drilling not fully monitored by US >> electric system’s 18/10/2011 capability to meet those demands.

Damian Obiglio resigns as president of the JPS >> 15/10/2011 Greater use of renewable energy A.E. Parnell Secures Handling and Launch Services would be encourContract for Petrojam >> 13/10/2011 aged and reduced dependence on Nevis Airport to provide all aircraft fuel >> 11/10/2011

page 3 fossils would ultimately be realized thereby resulting in greater economical benefits for the country. The additional benefits are substantial to the electric power-generating system, the economy, and the environment when Net Metering is combined in a Smart Grid allowing for greater management and use of the energy produced.

Looking further ahead, the use of these technologies in the Caribbean could also see the use of other technologies that are available but not yet accessible

by Caribbean countries for example the use of Plug-in Electric Vehicles. Support could also be made for the creation of new electricity markets from the home energy management system at the consumer’s premise to technologies that allow consumers and third parties to bid their energy resources into the electricity market.

The Smart Grid and Net Metering will support consistent market operation across regions and in summary provide improved reliability of power quality and transmission, reduce cost and expenditure for electric utilities and consumers (households and businesses), lower Greenhouse Gases (GHGs) and other gas emissions, and create greater awareness and management of our energy resources. Most importantly the use of these technologies in Caribbean countries will help break our dependence on dirty fossil fuels, add to the diversification of our current energy portfolio, reduce the pressure on our economies having to source scarce foreign exchange to purchase fuel and help lessen the environmental footprint associated with electricity generation and consumption.

Evidence seen in countries that currently employ these technologies shows that customers and Utility Companies continued on page 4/

JPS upholding international standards, according to company official >> 9/10/2011 What do you think about this Issue?

Oil drops to new lows >> 5/10/2011

Share your thoughts with us at

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Call: 1-876-927-1779 | Caribbean Petroleum Update : October 2011

same rate that is charged by the utilities for the energy sold. The justification being put forward by the Can Smart Grids & Net Metering reduce the Caribbean’s utilities for not dependence on fossil fuels? continued from page 1/ wanting to pay the same rate is that tend to be much more aware of energy there is an avoided cost to the consumer consumption and there is increased en- having not incurred the expenses to put ergy in the power grid to keep up with in the necessary infrastructure to transincreases in demand during peak power port the energy to the consumer either -use times resulting in less black-outs or way. This school of thought has nebrown-outs. gated many consumers that may have been thinking of investing in renewable energy systems for the purpose of genWhy Caribbean countries have not erating their own energy, and to sell any “bomb rushed” Smart Grid and Net excess to the utility company. As such, Meter technologies? investments are more attractive if the The answer to the question above is possibility is there to earn. simple when assessed from a business perspective. Most Utility companies in Other reasons relate to the lack of the Caribbean region are large monopo- awareness regarding the use and benelies or quasi government operated. fits of the technologies. Since the techThese utilities have a primary goal in nologies are fairly new, many countries mind - maximizing of profits. As such, have not developed the necessary prothey will seek to sell energy at the high- grammes to sensitize the population est rates possible with little regard to (utilities, household consumers and the consumer in relation to expenditure. businesses) on how these technologies In addition, large investments would be would provide more efficient use of required to introduce these technologies energy. In addition, the necessary legisparticularly Smart Grids as many utili- lative environments are not in place in ties are owned and operated by entities many countries to facilitate fair trading that are not native to the region. As and fair competition. such, there is great reluctance by the investors to invest too much. Govern- The way forward ments that are in countries where these monopoly utilities operate have not As we look to the future and in our taken the necessary steps to ensure that quest to improve our lifestyles through the utilities provide the most efficient greater use of technology, our focus technologies for the production, distri- must also be on self preservation and bution and consumption of the energy greater efficiency in the use of our and to some extent it is believed that resources. It is imperative that the techthey are being held at ransom not hav- nologies that are developed to improve ing the capital to make the investments our lives are efficient, safe, environthemselves. mentally friendly, and economical. Any use of energy in such technologies must As it relates to the use of Net Meters, be targeted towards yielding high effithere is a school of thought that is put ciency whilst negating the side effects forward that there is reluctance on the on humans, nature and the environment. part of the Utilities to pay the self gen- The way in which we extract, convert, erators supplying excess energy at the transport, store and use energy must

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result in tangible long-term benefits.

Smart Grid and Net Metering can reap significant benefits for Caribbean countries if approached in the correct way.

Large Utilities in the Caribbean such as the Jamaica Public Service – JPS that are seeking to increase their efficiency and expand generating capacity must now put the necessary infrastructure in place that would promote the use of these technologies which within possibly another five years may become the norm. Governments must seek to renegotiate contracts with Utilities in order to enforce the use of technologies that would provide the greatest benefits to country and the environment.

Policy makers and educators have a very key role to play in facilitating the development of the necessary legislative framework, infrastructure and environment to allow for the use of these emerging technologies. They must learn from best practices and not re-invent wheel. In addition, more incentive programmes should be created to facilitate the full support of the private sector which can act as change agents. Having the right incentives and information available for the use of these technologies can create an environment of investments thereby leading to economic growth.

Finally, the Caribbean people must seek to educate themselves on the emerging technologies. The availability of additional grid intelligence and real time information from the use of Smart Grids and Net Meters will give planners and engineers the knowledge to build what is needed when it is needed, to extend the life of assets, to repair equipment before it fails unexpectedly, and to more effectively manage the work force. Operational, maintenance and capital costs will be reduced thereby keeping downward pressure on prices and hence reducing our dependency on fossil fuels for electricity generation.

Y S T E M

(CEIS)

Caribbean Petroleum Update : October 2011 | Call: 1-876-927-1779

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REGULAR UNLEADED GASOLINE AVERAGE PRICES AT THE PUMP January - October 2011 Declines in Crude oil prices in September and during October were seen in the retail prices for Regular Unleaded Gasoline in some countries which showed decreases in prices. Of the sixteen countries reviewed at the end of October, retail prices for this product in ten Caribbean countries had shown decreases when compared to the previous month while two countries showed increases and the other four remaining relatively stable.

Table: Regular Unleaded Gasoline Average Retail Price (US$/Litre) 2011 COUNTRIES

JAN FEB

MAR APR

MAY

JUN

ANTIGUA/ BARBUDA

1.00

1.00

1.07

BAHAMAS [91 OCT]

1.24

1.25

BARBADOS

1.47

BELIZE [87 OCT]

JUL AUG SEP OCT AVG

1.15

1.25

1.33

1.30

1.30

1.30

1.30

1.57

1.30

1.46

1.47

1.47

1.45

1.43

1.44

1.34

1.20

1.48

1.49

1.59

1.59

1.59

1.59

1.66

1.66

1.60

1.22

1.33

1.34

1.48

1.50

1.54

1.51

1.49

1.51

1.44

1.47

1.39

B.V.I [87 OCT]

1.12

1.13

1.20

1.26

1.26

1.27

1.25

1.22

1.22

1.22

1.46

DOMINICA

1.01

1.05

1.06

1.11

1.21

1.24

1.22

1.22

1.22

1.17

1.15

GRENADA (95 OCT)

1.05

1.06

1.17

1.23

1.29

1.32

1.29

1.29

1.31

1.28

1.23

GUYANA

0.99

0.99

1.06

1.08

1.08

1.12

1.15

1.14

1.14

1.14

1.09

JAMAICA 87 Octane[E10]

1.17

1.18

1.25

1.28

1.29

1.29

1.31

1.29

1.28

1.25

1.26

MONTSERRAT

1.13

1.14

1.18

1.27

1.38

1.42

1.35

1.32

1.32

1.27

1.28

ST. KITTS/ NEVIS

1.04

1.07

1.20

1.13

1.14

1.23

1.27

1.28

1.28

1.29

1.19

ST. LUCIA

1.14

1.14

1.16

1.22

1.27

1.28

1.28

1.27

1.25

1.21

1.22

ST. VINCENT/GRENADINES 0.99

0.98

1.00

1.06

1.10

1.17

1.24

1.24

1.23

1.22

1.12

SURINAME [95 OCT]

1.21

1.32

1.34

1.47

1.55

1.51

1.48

1.48

1.45

1.40

1.42

TRINIDAD/[92 OCT]

0.42

0.42

0.42

0.42

0.42

0.42

0.42

0.42

0.42

0.42

0.42

TURKS/ CAICOS

1.36

1.36

1.42

1.42

1.45

1.55

1.61

1.60

1.60

1.54

1.49

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.

CHART

See prices for other products at www.ceis www.ceis--caribenergy.org .

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Call: 1-876-927-1779 | Caribbean Petroleum Update : October 2011

US$/BBL

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US$/BBL

During the month of October International oil prices showed slight increases when compared to the previous month. However, prices remained below the US$100/BBL with the highest price seen during the last week of October at approximately US$93/BBL. In comparison to the same period in 2008, Crude oil prices were approximately 10% higher in October 2011. When compared, the average prices seen for the months (Aug, Sep & Oct) showed that the average price in August was approximately 25% higher than September and October.

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