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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

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
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.

introduction
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.

world oil market
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.

jamaica s energy profile
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.

market structure
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.

petroleum market

Petroleum Market

Drill & Process

Distribution

Electricity Generation

Transportation

Bauxite & Mining

imports and consumption
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.

sectoral consumption
Sectoral Consumption

Ministry of Energy, Jamaica, W.I.

net generation trends
Net Generation Trends

Note: ** Projections guided by trends and Acres Report

Source: JPS and Acres Management Consulting

Ministry of Energy, Jamaica, W.I.

electricity sector priorities
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.

electricity sector priorities cont d
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.

slide15

POLICY

ENERGY

E = MC2

LEGISLATIVE FRAMEWORK

MODELING

Supporting

Structures

Ministry of Energy, Jamaica, W.I.

energy policy green paper
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.

modeling
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.

what is enpep balance
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.

enpep energy system equilibrium
ENPEP Energy System Equilibrium

Ministry of Energy, Jamaica, W.I.

main objective of enpep module
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.

major characteristics
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.

jamaica energy network
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.

electricity network
Electricity Network

Ministry of Energy, Jamaica, W.I.

sugar industry network
Sugar Industry Network

Ministry of Energy, Jamaica, W.I.

refinery network
Refinery Network

Ministry of Energy, Jamaica, W.I.

limitations of the model
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.

enpep summary
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.

energy conservation and efficiency

Energy Conservation and Efficiency

Projects and Activities

slide29

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.

projects and activities cont d
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.

incentives
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.

energy sector investment
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.

energy sector investment cont d
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.

legislative and regulatory framework
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.

environmental considerations
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.

concluding remarks
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.

for further information
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.

contact info

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