Energy Planning, Methodology and Approaches: Jamaicas Experience

1
Energy Planning, Methodology and
ApproachesJamaicas Experience

• Latin American and Caribbean Energy Forecast
  Energy Scenarios at 2032
  
• OLADE Sub-regional Workshop
• February 19, 2009
• Conroy Watson
• Senior Director
• Ministry of Energy, Jamaica

2
Outline

• Introduction
• World Oil Market
• Jamaicas Energy Profile
• Market Structure
• Petroleum Market
• Electricity Sector
• Energy Modeling, Planning Policy Guidelines
• Energy Conservation and Efficiency
• Way Forward
• Concluding Remarks

3
Introduction

• Jamaica is an oil importing developing country
• Petroleum imports satisfy more than 90 of the
  countrys energy needs
  
• Highly susceptible to global market conditions

4
World Oil Market

• Influences on global economy
• Emerging markets (China, India)
• Reserves
• Rate of new discoveries
• Volatility of oil prices
• Market speculation
• Geopolitical developments
• Changes in production strategies
• Uncertainty in supplies
• Crude and product prices
• Crude prices traded at US147/bls in 2008
• Averaged US99.67/bls
• Price decline started at the end of 2008
• False sense of security

5
Jamaicas Energy Profile
END-USE DEMAND
SECTORAL CONSUMPTION
SUPPLY
REFINERY
DISTRIBUTE
VENEZUELA MEXICO ECUADOR NIGERIA T T

OPEN MARKET
AGRI BAUXITE / ALUMINA ELECTRICITY MANUFACTURE
PUBLIC SERVICE RESIDENTIAL TOURISM TRANSPORT
LIGHTING HEATING COOKING REFRIGERATE A/C MOTO
R / ENGINE POWER
STEAM
STORE REFINE
DIST.
JAMAICA
6
Market Structure

• Petroleum
• Liberalized petroleum market
• State owned refinery
• 10 marketing companies
• 1 state owned marketing company
• 3 multinationals
• 6 Local marketing companies (private)
• Approx. 300 service stations island-wide
• Electricity
• Largest supplier JPS
• Electricity generation is done competitively
• Single distributor
• Three Independent Power Producers
• Other producers
• Bauxite/Alumina companies
• Caribbean Cement Company Ltd
• Sugar Factories

7
Petroleum Market
Drill Process
Distribution
Electricity Generation
Transportation
Bauxite Mining
8
Imports and Consumption
Assumptions for projections (1) conservation
and efficiency efforts successful and continuous
(2) alternative energy projects developed
(ethanol, wind, bio-diesel, coal, CNG, Petcoke)
(3) oil price 2010 US70/bls (4) oil price 2020
US100/bls
9
Sectoral Consumption
10
Electricity Sector
11
Net Generation Trends
Note Projections guided by trends and Acres
Report Source JPS and Acres Management Consultin
g
12
Electricity Sector Priorities

• Sector monitored by the regulator (O.U.R.)
• JPS compliance
• Recommendations from All Island Black-out
  Studies
  
• Established standards and directives from the
  regulator.
  
• Implementation of National Integrated Electricity
  Expansion Plan and Efficiency Study for Jamaica
  (Acres Report)
  
• Least Cost Expansion Plan
• Tariff reviews for electricity rates
• Electricity License
• Electricity Supply Strategy Planning including
  renewable energy
  
• Examine impact of energy efficiency and
  conservation

13
Electricity Sector Priorities contd

• Generation
• Establish and implement a programme to monitor
  the efficiency of power generating units
  
• Fuel use and power generation
• Transmission
• Distribution
• Assess Infrastructure Performance
• Merit Order Dispatch
• Shifts in peak demand

14
Energy Modeling, Planning and Policy Guidelines
15
POLICY
ENERGY
E MC2
LEGISLATIVE FRAMEWORK
MODELING
Supporting
Structures
16
Energy Policy (Green Paper)

• Elements of Energy Green Paper 2006 2020
• Energy supply and security
• Petroleum Industry
• Electricity Sector
• Rural Electrification Programme
• Transportation Sector
• Development of Renewable Energy Resources
• Energy Conservation and Efficiency
• Energy Fund
• Institutional Arrangement
• Green Paper addenda
• Energy Conservation and Efficiency Policy
  2008-2022
  
• Bio-fuels Policy
• Ethanol Policy
• Electricity Policy
• Net Metering Policy
• Carbon Trading Policy

17
Modeling

• ENPEP (Energy and Power Evaluation Programme)
• Utilizing the BALANCE Module of ENPEP
• Training workshop
• Stakeholder consultations/collaboration
• JPS, NEPA, PCJ, JBI, Petrojam, SIRI
• Petroleum market biased
• Energy Sector Strategy and Development Plan
  Report
  
• WASP-IV (Wien Automatic System Planning Package)
• Training
• Electricity sector biased
• Generation planning
• T21 Model (Threshold 21)
• Training and workshop
• Integrated development model
• Examines the economy, society and environment

18
What is ENPEP-Balance?

• One of approximately 8-10 other models by
  Argonne
  
• ENPEP-BALANCE is a nonlinear equilibrium model
• Simulation approach allows ENPEP-Balance to
  determine the response of various segments of the
  energy system
  
• Relies on a decentralized decision-making
  process
  
• Creates an equilibrium model represented by the
  energy network.

19
ENPEP Energy System Equilibrium
20
Main Objective of ENPEP Module

• To simulate the energy market and determine the
  energy supply and demand balance over a long-term
  period of up to 75 years.
  
• For Jamaicas case, the period
• 2005 2030 is used.

21
Major Characteristics

• Applications
• Energy policy analysis
• Energy market projections
• Natural gas market analysis
• Carbon emissions projections
• Projections of criteria pollutants (SO2, NOX,
  etc.)
  
• Carbon mitigation studies
• ENPEP features
• price-elastic demands
• fully integrated economic cost calculations
• enhanced error reporting
• visible structure created

22
Jamaica Energy Network

• A complete energy network for a country or region
  may consist of a large number of sectoral energy
  networks. Jamaicas network topology includes
  various sectors

• Refinery
• Oil Distribution
• Electricity Generation
• Distribution
• Imports
• Sugar Industry

• Bauxite Industry
• Domestic Energy Market
• Residential Consumers

The Ministry established an ENPEP Working
Committee to modify the existing network and
present a network topology that is highly
reflective of existing energy systems.
23
Electricity Network
24
Sugar Industry Network
25
Refinery Network
26
Limitations of the Model

• Solution generated year-by-year and is said to be
  myopic, which for short term oriented energy
  market may actually be an advantage.
  
• Demand-driven
• Not set up with sufficient detail
• Can be insensitive to price
• Ease of use in the Windows interface conceals the
  sub-models.
  
• ENPEP-Balance is a tool and a tool should be
  used wisely

27
ENPEP Summary

• Framework for developing institutional capacity
• government and non-government organizations
• agencies
• Model is adaptable and can be viewed as a
  planning tool
  
• developing the countrys long-run energy
  strategy
  
• generating scenarios according to user
  specifications
  
• necessary to informing policy decisions.
• Jamaicas case study created an appropriate
  energy network
  
• Analyses both energy and environmental systems

28
Energy Conservation and Efficiency

• Projects and Activities

29
Hotels

• Energy audits
• Lighting efficiency improvement
• A/C efficiency improvement
• Steam system efficiency improvement
• Power factor correction
• Solar water heater installation

Industry
Public Sector

• Use of cogeneration systems
• Use of high efficiency electric motors and
  variable speed drives
  
• Power factor correction
• Use of high efficiency industrial lamps
• Steam system efficiency improvement

• Energy audits
• Implementation of energy efficiency measures in
  hospitals and schools
  
• NWC (approx. 50 of the public sector
  consumption)
  
• Installation of energy efficient pumps
• Power factor correction

30
Projects and Activities contd
Residential
Transportation

• Energy conservation programmes
• Public education programmes
• Turning off lights when not in use
• Water saving measures
• Proper use of refrigerators and freezers
• Energy saving cookware and cooking tips
• Compact fluorescent bulbs
• Use of solar water heaters

• Promotion of car pooling where applicable
• Public education programmes
• Driving to achieve maximum fuel efficiency
• Rehabilitation of the railway system
• Introduction of bio-fuels

31
WayForward
32
Incentives

• Collaboration with other Ministries and agencies
• Ministry of Finance and the Public Service
• Ministry of Transport and Works
• Bureau of Standards
• NEPA
• Expansion in tax exempted items
• Renewable energy systems
• Solar water heaters, biogas plants and
  generators
  
• Energy efficient equipment and devices
• CFL bulbs, energy management and control
  systems
  
• Transport Sector initiatives
• Flexi-fuel vehicles
• Hydrogen powered vehicles
• Bio-diesel vehicles

33
Energy Sector Investment

• Renewable energy equipment manufacturing
• Solar panels
• Hydro stations
• Wind farms
• Bio-fuels production distribution
• Sustainable energy programs
• Nuclear Energy?
• Small Nuclear Plants existing
• Waste Disposal (an issue)

34
Energy Sector Investment contd
Facilitation of Natural Gas Supplies
Refinery Upgrade Program

• Expansion of the plant capacity/throughput from
  35,000 to 50,000 barrels per day
  
• Upgrade to address some challenges facing the
  refinery
  
• Old Technology Hydro-skimming
• New product specification
• Inability to supply all local market demand

• LNG
• CNG

Oil and Gas Exploration

• Blocks to be explored
• Companies involved
• Existing agreements (production sharing)

35
Legislative and Regulatory Framework

• The Office of Utilities Regulation Act
• Electricity
• All-island Electricity Licence
• Electricity Lighting Act
• Petroleum acts and regulation
• Petroleum Quality Control
• Petroleum and Oil Fuel (Landing Storage)
• Weight and Measures

36
Environmental Considerations

• Waste disposal
• Conversion of waste to energy
• Promotion of renewable energy
• Less toxic
• Reduced threat of water quality
• Decline in emission levels (C02, NOX)
• Carbon credits
• Carbon tax
• Emission levies

37
Concluding Remarks

• Energy security crucial
• Conservation and efficiency initiatives are key
• Goals can be met with timely and requisite
  investment
  

38
For Further Information

• Ministry of Energy
• www.men.gov.jm
• Petroleum Corporation of Jamaica
• www.pcj.com
• OLADE
• www.olade.org.ec
• Argonne National Laboratory
• www.dis.anl.gov
• International Atomic Energy Agency
• www.iaea.org

39
Contact Info
Thank You The End

• The Ministry of Energy
• 36 Trafalgar Road,
• Kingston 5, Jamaica, W.I.
• Tel. [phone]
• Fax [phone]
• Email cwatson_at_mct.gov.jm