The Barbados Light & Power (PL&P) 10 MW solar PV farm in Trents, St. Lucy is the Island’s first utility-scale solar project.
In 2014, the light and power company invited proposals for a solar photovoltaic system of up to 8 megawatts (MW) on an engineering, procurement and construction turnkey basis, for which over 40 bids were received. However, the proposal by the Spanish firm, Grupotec, to construct a 10 MW (AC) solar on the over 40 acres of land identified by BL&P was selected as the preferred bid.
The project, which consists of approximately 44,500 solar panels, broke ground in January 2016, having signed the EPC contract in late 2015. The plant was officially put into commercial operation in August of 2016, following 8 months of construction and commissioning activities. Also as part of the project, a new substation was also constructed onsite to interconnect the solar facility to the national grid. The project cost a total of approximately US $20 million.
The facility has been in service now for more than two years and it has been reported to be performing as expected. It has been estimated to be delivering fuel savings of approximately US $4.5 million per year.
Since its completion, BL&P announced plans for another solar farm at Lower Estate in St George and is working to make the 10 MW wind farm at Lamberts in St. Lucy a reality, so as to increase its portfolio of utility-scale renewable energy generation.
In addition, the light and power company has a renewable energy rider (RER) program that facilitates the integration of distributed solar and wind energy sources, of sizes up to 500 kilowatts (kW). The program to date has amassed a total of over 12 MW of renewable energy capacity, since first piloted in 2010.
Furthermore, the Government of Barbados is endeavouring to supply 100% of the island’s electricity needs from renewable energy sources by 2030. This forms the basis for the recent enactment of a new Electricity Light and Power Act, in 2013. The new Act opened up the electricity generation market to independent power producers (IPPs), who can now develop utility-scale renewable energy projects and supply energy to BL&P. The act allows for up 20 MW solar and 15 MW of wind to be added by IPP’s.
So while the 10 MW solar farm in Trent, St. Lucy marks the Country’s first utility-scale project, the stage is now set for a lot more to follow.
Trinidad and Tobago (T&T), has set an ambitious renewable energy (RE) target of 10% of installed capacity by 2021. This equates to approximately 200 MW given the combined installed capacity of the two islands is over 2000 MW of natural gas based power generation.
T&T is the only nation in the western hemisphere, and the second in the world, that generates 100% of its electricity needs from natural gas. Therefore, unlike the other islands in the Caribbean T&T is already energy independent, since all the natural gas used is sourced locally through its sophisticated network of pipelines. As a consequence, T&T have seen the lowest and most stable electricity rates in the region over the last decade.
Given that T&T is already energy independent, the integration of renewables will have the effect of reducing the natural gas demand for electricity production and thereby increasing the levels available for export and/or for use in the well developed local petrochemical industry. This is now being championed by the energy sector as a means to increasing government revenues in a time when the nation is witnessing a significant decline in revenues and consecutive budget deficits.
We decided to weigh in on the potential savings to be derived from this level of renewable energy integration. In order to do this we first had to assume a mix of renewable energy technologies. Since the objective is to use renewables as a means to reduce the consumption of a natural gas and thus increase government revenues, it thus implies that the 200 MW will come from utility scale renewable energy projects only.
We therefore opted to break up the 200 MW into 120 MW of onshore wind, 60 MW of solar pv and 20 MW of waste to energy. No consideration is given to the technical feasibility of this RE mix. There are, however, ongoing discussions on the subject of undertaking solar and wind resource assessments and there are currently no known technical barrier limiting grid connection.
As the based case, we looked at Jamaica, which has over 150 MW of utility scaled renewables connected to the grid, to formulate a case for wind and solar in T&T. In 2016, Jamaica commissioned 60 MW of wind and 20 MW of solar capacity at a cost of approximately US $200 million.
If we use the 36 MW BMR Wind Farm in Jamaica, commissioned in 2016 at a cost of US $90 million, as an example then, 120 MW of utility scale onshore wind capacity should not cost T&T more than US $300 million in 2018, given that the capital cost of onshore wind fell by 20% between 2010 and 2017. Conservatively, 120 MW of wind can generate 285,000 MWh annually, thus avoiding the use approximately 2,850,000 MMBTU of natural gas annually for the production of electricity.
Similarly, if we use the 20 MW Content Solar Farm in Jamaica, also commissioned in 2016 at a cost of US $63 million, then 60 MW of utility scale Solar PV should not cost T&T more than US $190 million in 2018, since the capital cost of solar PV fell by 68% between 2010 and 2017. 60 MW of solar can conservatively generate 95,000 MWh annually, thus avoiding the use of approximately 950,000 MMBTU of natural gas annually.
There has been some discussion around the potential of a waste to energy (WtE) facility at the country’s largest landfill, located on the outskirts of the capital city. The Solid Waste Management Company (SWMCOL) estimates that the landfill receives approximately 1000 tonnes of uncharacterized waste daily. We estimate that a 20 MW WtE facility can be developed at the proposed site to produce energy for the national grid.
Using the information on the Solid Waste Authority of Palm Beach County Renewable Energy Facility 2 (REF2), a 100 MW mass burn WtE facility commissioned in 2015 at a cost of US $672 million, we assume, therefore, that a similar facility rated at 20 MW should not cost T&T more than US $150 million. Given that a mass burn WtE facility is a steam power plant at its core, then a 20 MW plant should generate approximately 150,000 MWh annually and thus avoiding the use of approximately 1,500,000 MMBTU of natural gas annually.
Therefore, from our selected portfolio of renewables we see that the potential exist to avoid approximately 5,300,000 MMBTU of natural gas annually. However, this does not come cheap as total investment cost estimates to US $640 million. The chart to the left shows the projected price of natural gas up to 2040.
If we therefore look at the pessimistic case, we see that the price of natural gas in the US is projected to vary between US $3.00 to $4.00 over the remaining period and averages about US $3.50. Using this price we estimate a potential earning of US $18.6 million annually. The optimistic outlook, on the other hand, shows an average price of approximately US $6.80 resulting in a potential earning of US $36 million per annum.
Both the pessimistic and the optimistic outlooks gave very large negative net present values using a 10% discount rate over a 20 year period. The optimistic case only gave a positive net present value for a discount rate of about 1%. The analysis assumes that the projects would be government owned and did not take into consideration the operation and maintenance cost over the life of the project. Overall, it shows that the projected revenues to be derived from the sale of the avoided natural gas on the open market will not return the capital invested over a 20 year horizon.
The Jamaican electricity sector has seen its fair share of investment in renewable energy over the last two decades or so, to the tune of approximately US$360 million to be exact.
Development to date:
Jamaica has a long history of using its indigenous renewable sources of energy to generate electricity. This dates back as far as 1955 when the Upper White River hydroelectric power plant was inaugurated. The recent thrust to incorporate other forms of indigenous renewable sources of energy into the country’s energy mix started with the installation of a 225 kW wind turbine in 1996 at the Munro College campus, in St. Elizabeth, some fifty years later.
The success of the Munro installation led to the development of the country’s first commercial wind farm in 2004, the 20.7 MW Wigton I plant located in the neighbouring parish of Manchester. The plant had its fair share of issues, ranging from technical to financial, but the experience gained led to an 18 MW expansion in 2010, dubbed as Wigton II. In 2010 the utility company, the Jamaica Public Service (JPS) Company, also completed its first wind farm, a 3 MW plant located in close proximity to the Munro campus.
The publishing of the country’s national energy policy in 2009 and it’s draft renewable energy policy in 2010 prompted the development of several renewable energy projects. The first was a 7.2 MW expansion of JPS’s Maggotty hydroelectric plant in 2014. Then in 2016, the country witnessed the largest commissioning of renewable energy plants in a single year, closing out the year with a whopping total of 80 MW. This consisted of the 24 MW expansion of the Wigton Wind Farm (Wigton III), the 36 MW privately owned Wind Farm in St. Elizabeth, and the 20 MW Solar Farm in Clarendon, also privately owned.
A near term outlook:
The next renewable energy project on the horizon is the 33.1 MW Eight Rivers Solar Farm in Paradise Park, Westmoreland. In 2015, this project was selected by the Office of Utilities Regulation (OUR) from a list of 19 bids, received in response to a request for proposal (RFP) for renewable energy with capacity up to 37 MW. The privately-owned solar farm broke ground last month and is expected to be completed by December 2018 at an estimated cost of US$48.7 million dollars.
Once completed this solar farm will be the second, but largest, solar installation on the island and it will feed electricity into the JPS grid at US$0.0854 per kWh. At this feed in rate, which is less than half that of the other solar farm on the island, this project has proven that renewable energy projects can rival conventional generation and it sets a new price ceiling for future renewable energy projects in Jamaica.
Though the potential for wind energy on the island has not yet been exhausted, the Petroleum Corporation of Jamaica (PCJ), the parent company of Wigton Windfarms Ltd, is seeking to quantify the country’s offshore wind potential. The PCJ applied for and was awarded, in October of last year, a grant from the United States Trade and Development Agency (USTDA) to undertake a feasibility study of the island’s offshore wind potential. Preliminary work should have started during the final quarter of 2017 and the study is scheduled to last for 12 months. Should it proves feasible and leads to the development of viable offshore wind farms; it will be another first for Jamaica and the wider Caribbean.
Grid storage is also on the horizon if JPS is successful in obtaining the necessary approvals from the OUR. In May of last year, JPS sent out an RFP for the supply and installation of a 13 or 24.5 MW hybrid energy storage system. According to the light and power company, this system is required to smooth the effect of the intermittent renewable energy sources presently on the grid and also to provide other essential grid services such as frequency support, voltage support, and spinning reserve.
Dubbed as a first of its kind in the Caribbean, this energy storage system will utilize a combination of high-speed and low-speed flywheels and containerized lithium-ion batteries and is to be located at the Hunts Bay Power Plant substation. Once approved by the regulator, it is expected to be completed by the third quarter of 2018 at an estimated cost of US$21 million.
The Government is currently putting together an Integrated Resource Plan (IRP) with the intent to guide the development of a modern energy sector in Jamaica. The IRP is expected to establish the projected electricity demand over the next 20 year period, determine the generation capacity and technologies to be used to satisfy this demand, and to establish agreements on the transmission and distribution infrastructure to generate and deliver the needed electricity and the resulting tariffs.
The IRP, which was originally slated for completion late last year, when completed will give all stakeholders, including the investment community, a clear view of the agreed suite of medium to long term investment opportunities necessary to achieve the island’s 2030 renewable energy target of 30%.
In 2013, WBR Enterprises Inc. was selected by the Office of Utilities Regulation (OUR) via a competitive bidding process to develop a 20 Megawatts (MW) solar farm – the island’s first utility-scale solar project. The project was the third lowest bid received, in response to the OUR’s request to supply 115 MW of renewable generation, with a proposed price of US$0.1880 per kilowatt-hour (kWh) to deliver renewable energy to the national grid.
On September 18, 2014, WBR subsidiary, Content Solar Ltd., signed a 20-year power purchase agreement (PPA) with the Jamaica Public Service Company (JPS) to sell the full output of its solar farm to the grid.
The 154 acres solar farm, coined Solar Content, subsequently broke ground in Content Village, York Town, Clarendon on July 9, 2015. The $63 million (US) project was financed in part by a $47 million debt agreement with the Overseas Private Investment Corporation (OPIC) and the U.S. Government’s Development Finance Institution for the development. Sponsor equity was provided by WRB Serra, a strategic partner of WRB Enterprises and WRB Energy focused on sustainable infrastructure investments in the Caribbean and Latin America. The Content Solar plant is the second OPIC-financed project in support of the U.S. Caribbean Energy Security Initiative.
It is worthy of noting here that, the Content Solar plant is the second OPIC-financed project in support of the U.S. Caribbean Energy Security Initiative. The first being the blue mountain renewable (BMR) 36MW Wind Farm also located in Jamaica.
And in a historic move on August 28, 2016, the Content Solar farm was launched into commercial operations as Jamaica’s first utility-scale solar PV plant. The plant which boasts 97,000 solar panels will power more than 20,000 households over the next 20 years under the PPA with JPS.
According to the Jamaica’s National Energy Policy 2009-2030, the country is looking to significantly increase investments in renewable energy technologies. The country has targeted at least 20% contribution towards the energy mix from renewable energy sources by 2030. The content solar farm pushes Jamaica’s installed renewable capacity to approximately 152 MW or 14.8%.
Jamaica second utility-scale solar project, the Eight Rivers 33 MW solar farm, is currently ongoing and is estimated to be put into commercial operation by the end of 2018. The commissioning of Eight Rivers project will see jamaica’s renewable energy mix at 17.5%. The planned 190 MW LNG power plant in Old Harbour Bay, St Catherine, which is expected to be completed in early 2019, will change this mix.
These are certainly exciting times in Jamaica’s electricity market environment as they seek to lower the cost of electric energy in a bid to improve the country’s socio-economic conditions.
On September 18, 2014, WBR subsidiary, Content Solar Ltd., signed a 20-year power purchase agreement (PPA) with the Jamaica Public Service Company (
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