improving energy efficiency & lowering costs in the caribbean · improving energy efficiency...
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Improving Energy Efficiency & Lowering Costs in the Caribbean
Ramón Espinasa, Lead Specialist (Oil & Gas)
Energy / Infrastructure & Environment
Residents of Caribbean nations face very high electricity and transportation fuel costs that have measurably negative
impacts on its economic performance.
A Problem
- 5 10 15 20 25 30 35 40 45
Dominican Republic
Grenada
Barbados
Brazil
Guyana
Nicaragua
Colombia
Panama
Honduras
Peru
Mexico
Bolivia
Trinidad & Tobago
Venezuela
US cents per kilowatt-hour
Source: OLADE (2012); EIA (2014)
- 5 10 15 20 25 30 35 40 45
Dominican Republic
Grenada
Barbados
Brazil
Guyana
Nicaragua
Colombia
Panama
Honduras
Peru
Mexico
Bolivia
Trinidad & Tobago
Venezuela
US cents per kilowatt-hour
Source: OLADE (2012); EIA (2014)
- 5 10 15 20 25 30 35 40 45
Dominican Republic
Grenada
Barbados
Brazil
Guyana
Nicaragua
Colombia
Panama
Honduras
Peru
Mexico
Bolivia
Trinidad & Tobago
Venezuela
US cents per kilowatt-hour
Source: OLADE (2012); EIA (2014)
What explains these high costs of energy?
The Jamaican energy matrix illustrates
the reasons for these prices
Reasons
Final Consumption by Sector
Final Consumption by Source Transformation
Imports Secondary Energy
Total Supply Primary Energy
Exports Primary Energy
Production & Imports Primary Energy
Oil Products (33)
Industry (6)
Transport (14)
Residential (6)
Commercial (4)
Other (10)
20
28
Coal (1)
Hydro (0.2)
CR&W (11)
Total Production (11)
Total Imports (25)
0.2
Total Supply (33)
1
0.2
3
Electricity
Final Consumption (42)
Sector Consumption (42)
Jamaica 2011 (kboe/day)
Crude Oil (25)
Solar/Wind (0.2)
0.2
1
0.2
5
7
Editor: Ramón Espinasa (INE/ENE) Author: Carlos Sucre (INE/ENE)
Source: Own calculations based on IEA World Energy Balances
Inter-American Development Bank, 2012 Infrastructure & Environment/ Energy
11
25 25
Heat, Waste & Losses (17)
Elec
tric
ity
Inp
ut
(23
)
o Almost all generation capacity is thermal, based on fossil fuels – which are almost all imported
75% 88%
100% 96% 100% 100% 100% 100%
80%
49%
100% 95%
53%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100% D
om
inic
a
St. V
ince
nt
& t
he
Gre
nad
ine
s
Gre
nad
a
St. K
itts
& N
evi
s
An
tigu
a &
Bar
bu
da
St. L
uci
a
Gu
yan
a
Bar
bad
os
Hai
ti
Suri
nam
e
Bah
amas
Jam
aica
Trin
idad
& T
ob
ago
Do
min
ican
Re
pu
blic
shar
e o
f in
stal
led
cap
acit
y
Fuel Oil Gas Coal Hydro Other
Source: IDB (2013) – Pre-Feasibility Study of the Potential Market for Natural Gas as a Fuel for Power Generation in the Caribbean
o All generation capacity is thermal, based on fossil fuels, which are almost all imported
o Thermal generation wastes on average around 2/3
of the energy input to generation o Transport uses about ½ of total supply and it’s very
difficult to shift transport away from oil products on a large scale
o Therefore, the realistic scope for generating efficiencies in energy applies to about half of current
Final Consumption by Sector
Final Consumption by Source Transformation
Imports Secondary Energy
Total Supply Primary Energy
Exports Primary Energy
Production & Imports Primary Energy
Editor: Ramón Espinasa (INE/ENE) Authors: Malte Humpert
Source: Own calculations based EIA, Castalia Consulting, GEF
Inter-American Development Bank, 2013 Infrastructure & Environment/ Energy
Oil Products 4,800
Industry (601.1)
Transport (721.3)
Residential (390.7)
Commercial (631.1)
Other (300.5)
365
2,279.8
Total Supply (0.0)
Heat, Waste & Losses (1,916.3)
Electricity
Antigua & Barbuda 2009 (boe/day)
2,281.3
Sector Consumption (2,644.8)
Final Consumption (2,644.8)
Elec
tric
ity
Inp
ut
(2,2
81
.3)
Total Production (0.0)
Total Imports (0.0)
Exports (239)
A Solution
Turning to the scope for improving energy sector efficiency… there is potential for: - Diversifying to other thermal
A Solution
Turning to the scope for improving energy sector efficiency… there is potential for: - Diversifying to other thermal - Diversifying away from thermal
A Solution
Turning to the scope for improving energy sector efficiency… there is potential for: - Diversifying to other thermal - Diversifying away from thermal
• Solar/wind intermittency & storage • Geothermal geological conditions
Divergent Gas & Oil Prices
0
2
4
6
8
10
12
14
0
20
40
60
80
100
120
140
Jan
-97
Jul-
97
Jan
-98
Jul-
98
Jan
-99
Jul-
99
Jan
-00
Jul-
00
Jan
-01
Jul-
01
Jan
-02
Jul-
02
Jan
-03
Jul-
03
Jan
-04
Jul-
04
Jan
-05
Jul-
05
Jan
-06
Jul-
06
Jan
-07
Jul-
07
Jan
-08
Jul-
08
Jan
-09
Jul-
09
Jan
-10
Jul-
10
Jan
-11
Jul-
11
Jan
-12
Jul-
12
Jan
-13
Jul-
13
Jan
-14
Jul-
14
do
llars
pe
r M
MB
tu
do
llars
pe
r b
arre
l
Cushing, OK WTI Spot Price FOB Henry Hub Natural Gas Spot Price
Source: EIA
Potential Gas Sources
Source: IDB (2013) – Pre-Feasibility Study of the Potential Market for Natural Gas as a Fuel for Power Generation in the Caribbean
Source: IDB (2013) – Pre-Feasibility Study of the Potential Market for Natural Gas as a Fuel for Power Generation in the Caribbean
Potential Gas Import Ports
System Cost: Gas vs. Fuel Oil
0
2
4
6
8
10
12
14
16
Do
min
ican
Rep
ub
lic
Jam
aica
The
Bah
amas
Bar
bad
os
Gu
yan
ada
An
tigu
a &
Bar
bu
da
Hai
ti
St. L
uci
a
Suri
nam
e
St. K
itts
& N
evis
Gre
nad
a
St. V
ince
nt
& t
he
Gre
nad
ines
Do
min
ica
US$
/kW
h
Average Cost of System (Natural Gas) Average Cost of System (Fuel Oil)
Introducing natural gas for electricity generation can lead to savings between 20-30% for nearly all countries in the Caribbean
Source: IDB (2013) – Pre-Feasibility Study of the Potential Market for Natural Gas as a Fuel for Power Generation in the Caribbean
0.50
0.47
0.29
0.26
0.23
0.20
0.14
0.12
0.10
0.09
0.09
0.09
0.08
0.05
0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50 0.55
OTEC (5MW)
Wind (10kW)
Solar PV (small scale)
Solar PV (commercial scale)
Seawater Air Conditioning (2MW)
Solar PV (utility scale)
Residential SWH (2kW)
Hydro
Wind (850kW)
Commercial SWH (70kW)
Landfill gas to energy (internal combustion)
Bagasse cogeneration
Anaerobic Digestion / Biogas (2MW)
Geothermal (100MW)
US$/kWh
Firm Technology
Non-Firm, Less Reliable Technology
Non-Firm Technology
Gas Turbine, fuel cost US$0.15/kWh
LSD/HFO, all in cost US$0.16/kWh
System Cost: Gas vs Other Sources
Source: IDB (2013) – Pre-Feasibility Study of the Potential Market for Natural Gas as a Fuel for Power Generation in the Caribbean
Conclusions • Scope for savings from diversifying from fuel oil to non-
conventional renewable sources (small-scale wind, solar water heating, bagasse) exist in a small scale – Problems of intermittency and reliability remain very important with
solar, wind – Geothermal is a very attractive solution for countries with the
underground endowment
• Only realistic large-scale diversification would be from fuel oil to natural gas – Economies of scale of supply – Ability to replace fuel oil with gas for generation – Even expanding current NCR installed capacity to 10% of total, reliance
on fuel oil remains around 70-90%