The Editor, Sir:

Recent media reports have indicated that the Government has determined that liquefied natural gas (LNG) is the most economic fuel for future use in power generation, and that invitations will shortly be issued inviting proposals for installation of gas-fired generating units. It is hoped that the studies on which that determination is based will be made available for public review in order to convince the sceptics of the robustness of the conclusions.

In the recent past, attempts were made to source LNG from Trinidad at prices that would lower the cost of electricity to the local consumer. In anticipation of successful conclusion of the attendant negotiations with the Government of Trinidad and Tobago, investment plans for generation with other fuels were cancelled. Lack of success in those negotiations frustrated realisation of the gas-fuelled generation hopes and had the effect of making electricity prices to consumers today higher than they probably would have been had the expansion plans originally developed been implemented.

Most economic fuel

All base-load generation studies conducted since the 1970s and available to the public have consistently indicated that coal is the most economic fuel for generation of public electricity in Jamaica. A review of Jamaica's electricity sector prepared by The World Bank in the latter half of 2008 selected coal as the least-cost fuel at current prices and that the prices of alternate fuels would escalate more steeply than that of coal over the next 15 years.

Coal-burning power stations have not been implemented in the recent past because of government intervention, purportedly on the basis of economics, but the studies on which the conclusions were based have never been subjected to public analysis.

Lower cost

It is difficult to see why LNG for power generation in Jamaica should be any more economic today than it was at the time of the negotiations with Trinidad, the only source of that fuel in the region and a Caricom member as well. The lower specific cost of coal is indicated by the fact that internationally there has been increased investment in coal-burning power stations over the last five years, even in some countries with indigenous gas reserves, such as the United States of America. The majority of independent forecasts of fuel prices project steeper increases for gas than for coal over the next 15 years.

Exploitation of the synergies possible with usage of a common fuel by the electricity and alumina sectors should be of primary consideration in Jamaica's energy plans.

Real possibility

The Government has acknowled-ged that unless the cost of fuel to the alumina refineries can be drastically reduced, there is the real possibility that the three which have recently closed may never reopen. It is difficult to envisage LNG being delivered and re-gasified at a port such as Port Esquivel and the gas then being economically pumped to Kirkvine, Ewarton or even Jamalco, the closest plans to the port. Such a process would require massive investments in construction of high-pressure pipelines to each of those refineries and erection of gas storage tanks at the plants. Operational costs of pumping the gas to the refineries would also be significant.

On the other hand, the infrastructure for transportation of coal by rail from the port to all three refineries is already in place. It is possible that objective evaluation of the cost effectiveness of coal will result in decisions that would not only reduce the cost of public electricity and revitalise the alumina industry but also rescue the historic Jamaican railway from the fate to which it now seems destined.

I am, etc.,

Winston C. Hay

winhay@cwjamaica.com