My Thoughts on Technology and Jamaica: OUR opens 360MW LNG Power Plant Bids as JPS Co forms Energize Jamaica with 3 of the bidders - Friday August 9th 2013 is Jamaica's Power Emancipation Day

Monday, August 19, 2013

OUR opens 360MW LNG Power Plant Bids as JPS Co forms Energize Jamaica with 3 of the bidders - Friday August 9th 2013 is Jamaica's Power Emancipation Day

“After several stops and starts, today I can speak with certainty that a positive change is about to come to the supply of Electricity in Jamaica. It is essential that we begin construction of new generating capacity this year. There have been too many delays, and we can no longer live with these high Electricity prices,”

Minister of Science, Technology, Energy and Mining, Hon. Phillip Paulwell, in his contribution to the 2013/14 Budget Debate in the House of Representatives on Wednesday, April 24, 2013

Looks like Friday August 9th 2013, three days after Emancipation Day on Tuesday August 6th 2013 is more than just of significance to Telecoms Providers. On that fateful Friday, the OUR (Office of Utilities Regulation), under pressure from Minister Phillip Paulwell, has finally revealed the bidders to build the 360MW LNG Power Plant, as stated in the article “Power trinity - Companies collaborate to offer best bid in the megawatt project”, Published Friday August 9, 2013, The Jamaica Gleaner.

Interestingly, the JPS Co (Jamaica Public Service Company) it seems has teamed up with three (3) other bidders in a joint holding company called Energize Jamaica Limited. The Developments in the Energy Sector, though coincidental with those Emancipating announcements in the Telecoms Sector, are not surprising. 

Up to July 26th 2013, the OUR (Office of Utilities Regulation) had whittled down the bidders from a high of fourteen (14) bidders to a preferred group of six (6) plus JPS Co as stated in the article “OUR to Recommend Preferred Bidder for Power Plant in 30 Days Friday”, 26 April 2013 11:03 By Chris Patterson, JIS Reporter, The Jamaica Information Service. An interestingly this partnership may have more to do with the type of Generator Technology and less to do with financial or Cost difficulties.

Please note that it is on this same Friday August 9th 2013 that Telecom Provider LIME introduced JA$300 30-Day Data Plans as stated in my blog article entitled “LIME Jamaica introduces 30-day Data Plans for JA$300 and a free Alcatel One Touch T'Pop - How the Butler started the Smartphone Data Revolution”.

Telecom Provider Digicel has also responded in kinds and abolished Roaming charges as detailed in my blog article entitled “Digicel to eliminate Roaming Charges by Tuesday October 1 2013 - Minister Paulwell Negotiates with LIME for US Calls free of Roaming, proving Everything is Possible”.

So clearly, Everything is Possible, even in the Power Generation World as well!

JPS Co up until the time of the announcement on Friday August 9th 2013 hadn’t announced their intent to bid as stated in the article “No bids from JPS for new power project”, published Thursday August 8, 2013 5:32 pm, RJR Online. But the JPS Co had already been given the opportunity to supply the LNG and build the 360MW plant since October 2013.

JPS Co even reached the point of forming a consortium called SJPC (South Jamaica Power Company) made up of JPS Co’s parents Marubeni of Japan and EWP of South Korea as stated in my blog article entitled“SJPC, the Marubeni, EWP  and JPS Co consortium's to begin LNG Plant Construction in Q2 of 2013 - Jamaica's On A Mission towards The Impossible Promised Land”.

But by February 2013 JPS Co failed to provide specifics on their project, so the OUR took the project back from them, put out a RFP (Request for Proposals) and began the bidding process anew….and here we are again.

The OUR has also fulfilled their mandate to declare a preferred bidder within thirty days, which they have now done. Interestingly, all the bidders thus far are proposing the same thing: LNG (Liquid Natural Gas) as the main Fuel for the 360MW of power needed is being proposed by all the bidders in various Generator Configurations.

The six (6) bidders remaining are as follows:

1.      Amourview Holdings Limited
2.      Azurest Cambridge Power
3.      Hong Kong based Energy World International
4.      Mussons Jamaica Limited
5.      Optimal Energy Limited
6.      Tank-Weld

JPS Co has partnered with the following three out of the six:

1.      Amourview Holdings Limited
2.      Mussons Jamaica Limited
3.      Tank-Weld

Thus the six has whittled down to four (4) main bidders:

1.      Energy World International
2.      Optimal Energy Limited
3.      Energise Jamaica Limited
4.      Azurest Cambridge Power.

Energise Jamaica Limited is proposing:

1.      Generator Type: 360-megawatt dual-Fuel selective-cycle Reciprocating power-generation plant
2.      Fuel: No. 6 HFO (Heavy Duty Fuel) and LNG
3.      Cost: US$586.7 million 

Energy World International Limited plans is proposing:

1.      Generator Type: 478MW combined-cycle power plant
2.      Fuel: HFO or LNG
3.      Cost: US$737 million to construct a generation.

Azurest Cambridge Power is proposing:

1.      Generator Type: 3-4 Power Barges running Reciprocating Generators supplied by Wartsila Caribbean
2.      Fuel: HFO or LNG
3.      Cost: US$690 million

Azurest Cambridge Power is one the bidders promising Electricity price reduction in the order of 30% using LNG supplies from the US Gulf Coast as stated in the article “Azurest talks up bid for 360-megawatt plant”, Published Friday August 16, 2013 19 by NedburnThaffe, Gleaner Writer, The Jamaica Gleaner.

This as stated by Managing Director of Azurest Partners, Kenneth Allen,  quote:  “Using United States gas, which is the cheapest gas in the world, allows us to pass on enormous fuel savings to Jamaican consumers and we think that we can take prices across the grid down by roughly 30 per cent. Whatever the (current) price is, we can take that down to north of 15 to 20 cents (per kilowatt-hour)”.

Azurest Cambridge Power plan is to use Power Barges supplied by smaller ships with LNG, allowing then with the use of three of four ships to scale up to the required 360MW of power  as stated in the article “Electricity bidder proposes LNG power barges”, published Wednesday, April 10, 2013, The Jamaica Observer.

Everyone else, it seems, is on the same page as it relates to the use of LNG as the best Fuel that can reduce the Electricity bill of Jamaica. The debate seems to be about what type of Generators are best, with Wartsila Caribbean, a Generator manufacturer from Finland, claiming Reciprocating Engines to be more efficient than CCGT (Combined Cycle Gas Turbines) and JPS Co claiming otherwise.

In the words of Wartsila Caribbean’s Vice-president Rodney George, Reciprocating Engines are more efficient no matter what Fuel is used, with Bogue Power Station as his example, quote: “Bogue is a living example where the CCGT plant has a combined cycle efficiency of only 40 per cent. In comparison, the JEP (Jamaica Energy Partners) West Kingston plant with Wartsila reciprocating engines, have a simple cycle efficiency of close to 45 per cent... regardless of what Fuel is utilised, be it LNG, LPG, or ADO, the efficiency quotient remains the same”.

On the flip side to balance the argument, JPS Co is claiming CCGT is more environmentally friendly and more efficient, to quote JPS Co CEO Kelly Tomblin, quote: “While we haven't seen the other proposals, our information shows that CCGT not only offers lower overall costs through greater efficiency and lower operating and maintenance costs. It is also more environmentally friendly. Although JPS and the GOJ continue to evaluate all potential gas supply options, if the immediate supply options for LNG do not result in the desired reduction in Electricity charges, LPG (Liquefied Petroleum Gas) is a great option”.

This schism in Generator Technology it may explain JPS Co partnership, as they may be going the route of CCGT Engines while Wartsila Caribbean, Generator supplier to Optimal Energy Limited, Azurest Cambridge Power and Hong Kong based Energy World International, are going the Reciprocating Engine route.

I’m no expert of Generators, but it’s interesting to see companies make major decisions based on engineering specs claims of efficiency as opposed to financial considerations, an indication of the importance of such considerations to the long term operational cost of any successful bid. It is these types of lively debates about the Technology that makes the Public more involved and aware of how Electricity, a commodity we all take for granted, is made and the technical difficulties as it relates to producing and distributing it across the island.

Hopefully too, there will also be a hastening of bids for Alternative Energy suppliers to put forwards their proposals for Solar and Wind Energy Projects to supply the National Grid as with Electricity. WWFL (Wigton Wind Farm Limited) is already set for expansion in 2013 with a bid to supply 12.5% of the Grid in keeping with the Vision 2030 Mandate as explained in my Geezam blog article entitled “Wigton Wind Farm: Origins and Future Development of Wind Energy in Jamaica”.

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