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LNG still to power $14b JPS Hunts Bay plant amid energy crisis and cooling concerns

Power utility Jamaica Public Service Company, JPS, will continue to build a power plant at Hunts Bay in Kingston to run on liquefied natural gas, LNG, rather than on energy from renewables, even as oil and gas prices climb globally.

At the same time, lobby group Jamaica Environment Trust, JET, has raised concerns about the use of water from the sea to cool the proposed plant, for fear it could kill sea life in the Kingston harbour.

The power company said LNG provides a stable supply of power which is needed to replace 171.5 megawatts, MW, of ageing power assets. Comparatively, the power generated from renewable energy, whether wind, solar or hydro, would provide only intermittent power, Winsome Callum, director of communications at JPS said in a written response to Financial Gleaner queries.

“When there is no wind, wind plants do not generate electricity. When there is no sun, solar farms produce no electricity,” according to Callum.

The company got notification from the Ministry of Science, Energy and Technology in February to continue work to replace 171.5MW of old power primarily at Hunts Bay, which now runs on heavy oil. After issuing a proposal for a consultant to conduct the environmental impact assessment, JPS chose CL Environmental for the job.

“JPS is still awaiting final authorisation to proceed with the project. But if everything proceeds as scheduled, construction will begin in 2023,” Callum said this week.

Around the world, rising energy prices have raised interest in renewables as a source of generating cheaper power to cut electricity bills. Amid the global inflation and oil and food supply crisis created by Russian agression in Ukraine since February, oil was US$103 a barrel on Thursday, or 67 per cent higher than a year ago, while LNG traded at US$5.52 per unit, or 109 per cent higher than a year earlier.

The JPS, in its tender for a consultant, had outlined that the plant would run on LNG, while using seawater for cooling. The utility told the Financial Gleaner that using seawater to cool plants, and its release back into the sea, was not unusual.

“The previous JPS plants at Hunts Bay, as well as the retired Old Harbour units, used seawater for the steam turbine cooling system. The new units at the Old Harbour-based South Jamaica Power Company currently use seawater cooling. Seawater cooling is also used by other local power-generating companies,” Callum pointed out.

The water will be released back into the sea in accordance with effluent standards of the Natural Resources Conservation Authority, according to the JPS.

“This is carefully established to ensure no negative impact on the environment. JPS is very aware of all the local and international standards, and works with the permitting agencies to ensure full compliance to these environmental standards,” Callum added.

However, JET is not moved by the power company’s assurance, arguing that studies show that there are known environmental impacts associated with the use of seawater for cooling in power plants.

“JET is concerned. The level of impact is dependent on the amount of seawater used and then discharged back into the environment,” JET CEO Dr Theresa Rodriguez-Moodie told the Financial Gleaner.

She reasoned that the seawater intake can kill fish eggs, larvae and adult organisms, including fish that become trapped in intake screens. “Seawater is not just water, it includes aquatic life,” the JET head said.

“A thorough and rigorous assessment of the impacts, including the cumulative impacts, are critical prior to any decision by the National Environment and Planning Agency,” she maintained.

In early March, the utility regulator, the Office of Utilities Regulation, held an expert session on renewables. The forum determined that Jamaica needs more renewables to reduce its dependence on oil, but it conceded that building renewable plants was more costly than traditional oil plants, and would result in higher light bills for consumers in the medium term. That’s because consumers would pay the excess capital costs of setting up these green plants. The saving, the panellists agreed, would come over the long term.

LNG fuels 59 per cent of the island’s electricity grid, which is 28 per cent dependent on diesel fuel and 13 per cent on renewables.

Last March, the JPS started preparatory work on the Hunts Bay plant with the hiring of a soil consultant as part of its five-year business plan that runs to 2024. Under the plan, in addition to Hunts Bay, which should cost about $14 billion, JPS’s Rockfort plant, also in Kingston, is to be converted to LNG.

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