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Energy Planning, Methodology and Approaches: Jamaica’s Experience

Energy Planning, Methodology and Approaches: Jamaica’s 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. Outline. Introduction World Oil Market

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Energy Planning, Methodology and Approaches: Jamaica’s Experience

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  1. Energy Planning, Methodology and Approaches:Jamaica’s 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 • Jamaica’s Energy Profile • Market Structure • Petroleum Market • Electricity Sector • Energy Modeling, Planning & Policy Guidelines • Energy Conservation and Efficiency • Way Forward • Concluding Remarks Ministry of Energy, Jamaica, W.I.

  3. Introduction • Jamaica is an oil importing developing country • Petroleum imports satisfy more than 90% of the country’s energy needs • Highly susceptible to global market conditions Ministry of Energy, Jamaica, W.I.

  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 US$147/bls in 2008 • Averaged US$99.67/bls • Price decline started at the end of 2008 • False sense of security Ministry of Energy, Jamaica, W.I.

  5. Jamaica’s 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 MOTOR / ENGINE POWER STEAM STORE & REFINE DIST. JAMAICA Ministry of Energy, Jamaica, W.I.

  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 Ministry of Energy, Jamaica, W.I.

  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: US$70/bls (4) oil price 2020: US$100/bls Ministry of Energy, Jamaica, W.I.

  9. Sectoral Consumption Ministry of Energy, Jamaica, W.I.

  10. Electricity Sector

  11. Net Generation Trends Note: ** Projections guided by trends and Acres Report Source: JPS and Acres Management Consulting Ministry of Energy, Jamaica, W.I.

  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 Ministry of Energy, Jamaica, W.I.

  13. Electricity Sector Priorities cont’d • 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 Ministry of Energy, Jamaica, W.I.

  14. Energy Modeling, Planning and Policy Guidelines

  15. POLICY ENERGY E = MC2 LEGISLATIVE FRAMEWORK MODELING Supporting Structures Ministry of Energy, Jamaica, W.I.

  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 Ministry of Energy, Jamaica, W.I.

  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 Ministry of Energy, Jamaica, W.I.

  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. Ministry of Energy, Jamaica, W.I.

  19. ENPEP Energy System Equilibrium Ministry of Energy, Jamaica, W.I.

  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 Jamaica’s case, the period 2005 – 2030 is used. Ministry of Energy, Jamaica, W.I.

  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 Ministry of Energy, Jamaica, W.I.

  22. Jamaica Energy Network A complete energy network for a country or region may consist of a large number of sectoral energy networks. Jamaica’s network topology includes various sectors*: • Bauxite Industry • Domestic Energy Market • Residential Consumers • Refinery • Oil Distribution • Electricity Generation • Distribution • Imports • Sugar Industry *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. Ministry of Energy, Jamaica, W.I.

  23. Electricity Network Ministry of Energy, Jamaica, W.I.

  24. Sugar Industry Network Ministry of Energy, Jamaica, W.I.

  25. Refinery Network Ministry of Energy, Jamaica, W.I.

  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” Ministry of Energy, Jamaica, W.I.

  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 country’s long-run energy strategy • generating scenarios according to user specifications • necessary to informing policy decisions. • Jamaica’s case study created an appropriate energy network • Analyses both energy and environmental systems Ministry of Energy, Jamaica, W.I.

  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 Ministry of Energy, Jamaica, W.I.

  30. Projects and Activities cont’d 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 Ministry of Energy, Jamaica, W.I.

  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 Ministry of Energy, Jamaica, W.I.

  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) Ministry of Energy, Jamaica, W.I.

  34. Energy Sector Investment cont’d 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) Ministry of Energy, Jamaica, W.I.

  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 Ministry of Energy, Jamaica, W.I.

  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 Ministry of Energy, Jamaica, W.I.

  37. Concluding Remarks • Energy security crucial • Conservation and efficiency initiatives are key • Goals can be met with timely and requisite investment Ministry of Energy, Jamaica, W.I.

  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 Ministry of Energy, Jamaica, W.I.

  39. Thank You… The End Contact Info: The Ministry of Energy 36 Trafalgar Road, Kingston 5, Jamaica, W.I. Tel. #: (876) 929-8990-9 Fax #: (876) 968-2082 Email: cwatson@mct.gov.jm

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