Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy. Final Report. Submitted to: World Bank.

Transcription

1 The Power of Experience Submitted to: World Bank Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report Submitted By: March 2010

2 Contents Section Page Section 1 Executive Summary Introduction Approach Load Forecast Fuel Supply Project and Technology Analysis Regional Strategies Country Summaries Recommendations Section 2 Introduction Background Study Team Section 3 Approach Approach Brief Description of Study Steps Section 4 Data Data Collection Process Section 5 Existing and Planned Generation, Summary of Transmission Existing and Planned Generation Plants Existing Transmission Systems Description and Analysis of Power Generation Market Section 6 Load Forecast Load Forecasting Approach Current Demand and Electricity Forecast by Country Regional Load Forecast Section 7 Fuel Supply Existing Fuel Supply Potential Fuel Supply Options Fuel Storage Options Fuel Prices and Projections Section 8 Generation Technologies and Expansion Options Regional Overview Fossil Fuel Technologies Costs and Performance Renewable Energy Technologies Power Plant Costs and Performance Renewable Technologies Resource Availability Upgrade and Retrofit of Existing Units Renewable Energy Projects Section 9 Submarine Cables and Interconnection Options Overview of Submarine Cables Existing/Proposed Sub-regional Interconnection Options Northern Ring Interconnection Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report i

3 Contents Section 10 Study Analytical Approach Overview of Analytical Procedures Screening Analysis Approach Approach for Developing Scenarios Power System Expansion Planning and Analysis Approach Section 11 Screening Analysis Results Fossil Fuels Screening Curves for Individual Islands The Impact of CO2 Costs Section 12 Scenarios Base Case Scenario Fuel Scenario Interconnection/Renewable Scenario Integrated Scenario Section 13 Scenario Analysis Results Base Case Scenario Summary Fuel Scenario Interconnection/Renewable Scenario Integrated Scenario Section 14 Study Results Evaluation Comparison of Scenario Results Recommended Development Scenario Section 15 Conclusions and Recommendations Conclusions Recommendations Attachment A provides detailed scenario analysis results Attachment B provides a discussion of submarine power cable reliability Attachment C provides a discussion of submarine power cable repair procedures Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report ii

4 Contents Table Page Acronyms and Abbreviations... viii Table 1-1 Net Peak Demand Load Forecast (MW) Table 1-2 Net Generation Forecast (GWh) Table 1-3 Fuel Prices Based on Yearly Demand Table 1-4 Scenario NPV Cost Differences - Base Case Minus Other Scenario Costs (million US$) Table 5-1 Fuels, Fuel Types, and Where the Fuel Prices Apply Table 5-2 Existing Generating Units Table 5-3 Planned Generating Units Table 5-4 Transmission System Frequency and Highest Voltages Table 6-1 Summary Load Forecast for Antigua and Barbuda Table 6-2 Summary Load Forecast for Barbados Table 6-3 Summary Load Forecast for Dominica Table 6-4 Summary Load Forecast for Dominican Republic Table 6-5 Summary Load Forecast for Grenada Table 6-6 Summary Load Forecast for Haiti Table 6-7 Summary Load Forecast for Jamaica Table 6-8 Summary Load Forecast for St. Kitts Table 6-9 Summary Load Forecast for Nevis Table 6-10 Summary Load Forecast for St. Lucia Table 6-11 Summary Load Forecast for St. Vincent and Grenadines Table 6-12 Summary Load Forecast for Martinique Table 6-13 Summary Load Forecast for Guadeloupe Table 6-14 Net Peak Demand Load Forecast (MW) Table 6-15 Net Generation Forecast (GWh) Table 7-1 Fuels Used by Country Table 7-2 Pipeline Transportation Costs All Islands Connected Table 7-3 Pipeline Transportation Costs St. Lucia Not Connected Table 7-4 Pipeline Transportation Costs St. Lucia and Guadeloupe Not Connected Table 7-5 Pipeline Transportation Costs Barbados is Only Island Connected Table 7-6 Mid-scale LNG Comparison Table 7-7 Regional Petroleum Consumption Table 7-8 Summary of Economic Analysis Table 7-9 Transportation Cost Parameters Table 7-10 EIA US Fuel Prices, $/GJ Table 7-11 Fuel Prices Based on Yearly Demand Table 7-12 Yearly Prices for Fuels for Caribbean Power Plants Table 8-1 Typical Performance and Cost Estimates for Conventional Coal Plants Table 8-2 Typical Performance And Cost Estimates for CFB Plants Table 8-3 Typical Performance and Cost Estimates for Simple Cycle Combustion Turbines Table 8-4 Typical Performance And Cost Estimates for Combined Cycle Plants Table 8-5 Typical Performance And Cost Estimates for Diesel Engines Table 8-6 Wind Class and Corresponding Wind Speed and Wind Power Table 8-7 Typical Performance And Cost Estimates for Wind Turbines Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report iii

5 Contents Table 8-8 Typical Performance And Cost Estimates for Geothermal Plants Table 8-9 Typical Performance And Cost Estimates for Small Hydro Plants Table 8-10 Typical Performance And Cost Estimates for Solar Trough Plants Table 8-11 Typical Performance And Cost Estimates for PV Systems Table 8-12 Typical Performance And Cost Estimates for Biomass and LFG Plants Table 8-13 Renewable Resource Estimate for the Caribbean Region Table 9-1 List of Some of the World s Major AC Submarine Cable Links Table 9-2 List of Some of the World s Major DC Submarine Cable Links Table 9-3 Submarine Cable Project Costs Table 9-4 Proposed Submarine Cable Interconnections Table 9-5 Cost Comparison Nexans Estimates and Historical Formula Table 9-6 Basic Data and Cost Estimates for Submarine Cable Interconnections Table 11-1 Added Cost of Fuels Based on CO2 Cost of US$50/tonne Table 11-2 Impact of CO2 Costs on Fuel Costs Table 13-1 Base Case Production Cost Summary (Million 2009 US$) Table 13-2 Base Case Investment Cost Summary (Million 2009 US$) Table 13-3 Fuel Scenario Production Cost Summary (Million 2009 US$) Table 13-4 Fuel Scenario Investment Cost Summary (Million 2009 US$) Table 13-5 Interconnection/Renewable Scenario Production Cost Summary (Million 2009 US$) Table 13-6 Interconnection/Renewable Scenario Investment Cost Summary (Million 2009 US$) Table 13-7 Interconnection/Renewable Scenario Interconnection Cost Summary (Million 2009 US$) Table 13-8 Integrated Scenario Production Cost Summary (Million 2009 US$) Table 13-9 Integrated Scenario Investment Cost Summary (Million 2009 US$) Table Integrated Scenario Interconnection Cost Summary (Million 2009 US$) Table 14-1 Scenario NPV Cost Comparison (Million US$) Table 14-2 Scenario NPV Cost Differences - Base Case Minus Other Scenario Costs (Million US$) Table 14-3 Investment Requirement, 2009 US$ Million, by Scenario Table 14-4 Production Cost Summary, 2009 US$ Million, by Scenario Table 15-1 Fuel Prices Based on Yearly Demand Table 15-1 Scenario NPV Cost Differences - Base Case Minus Other Scenario Costs (Million US$) Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report iv

6 Contents Figure Page Figure 1-1 Caribbean Regional Map Figure 1-2 Countries Included in the Study Figure 1-3 Other Relevant Countries Addressed in the Study Figure 1-4 Fossil LCL for Dominican Republic Figure 1-5 Other Options for Dominican Republic Figure 1-6 Eastern Caribbean Gas Pipeline (ECGP) Proposed Route Figure 1-7 Dominica Interconnections Figure 1-8 Nevis Puerto Rico and Nevis US Virgin Islands Interconnections Figure 1-9 Saba St. Maarten Interconnection Figure 1-10 Haiti Dominican Republic Interconnection Figure 1-11 United States (Florida) Cuba Interconnection Figure 1-12 Northern Ring Set of Interconnections Figure 1-13 Northern Ring Interconnections Alternative Figure 1-14 Distillate LCL vs. Renewable Energy Options Figure 1-15 Barbados LCL vs. Renewable Energy Options Figure 7-1 Coal Transportation Costs Figure 7-2 LNG Transportation Costs Figure 7-3 CNG Transportation Costs Figure 8-1 Existing Generation Technologies Figure 8-2 Capital Cost Estimate for Power Projects in US Figure 8-3 Wind Turbine Components Figure 8-4 Output Profile Wind Speed vs. kw output for Gamesa G58 Turbine Figure 8-5 Flash Steam Geothermal Power Plant Schematic Figure 8-6 Parabolic Trough Collector Plant Figure MW Solar 2 Project near Barstow, CA Figure 8-8 Ausra and Sky Fuel CLFR Lay Outs Figure 8-9 Parabolic Dish with Stirling Engine Figure 8-10 Two Tank Thermal Storage System Figure 8-11 Typical PV Solar Module Figure 8-12 Typical PV System Configuration Figure 8-13 Least Cost Line for Distillate Fuel Figure 8-14 Distillate LCL vs. Renewable Energy Options Figure 8-15 Fossil Least Cost Line for Dominica and Nevis with No Geothermal Figure 8-16 Fossil Least Cost Line for Dominica and Nevis vs. Geothermal Figure Core XLPE Submarine Cable Figure 9-2 Photograph of a Sample of the 525 kv Vancouver Island Cable Figure 9-3 Transmission Cable System Selection Criteria for Various Cable Types and Capacities (Courtesy of Prysmian Cables and Systems) Figure 9-4 HV DC MI-IRC Cable Figure 9-5 Correlation Between Cable Length and Cost (2009 $) Figure 9-6 Correlation between Cost per MW/MVA and Length Figure 9-7 Fossil Least Cost Line for St. Kitts vs. Geothermal Plant / Submarine Interconnection Figure 9-8 Fossil Least Cost Line for Martinique with No Geothermal Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report v

7 Contents Figure 9-9 Fossil Least Cost Line for Martinique and Guadeloupe vs. Geothermal Plant / Submarine Interconnection at 100 MW Each Figure 9-10 Fossil Least Cost Lines for Martinique and Guadeloupe vs. Geothermal Plant / Submarine Interconnection at 50 MW Each Figure 9-11 Fossil Least Cost Line for Guadeloupe with No Geothermal Figure 9-12 Fossil Least Cost Lines for Guadeloupe vs. Geothermal Plant / Submarine Interconnection at 100 MW Figure 9-13 Fossil Least Cost Line for Guadeloupe vs. Geothermal Plant / Submarine Interconnection at 50 MW Figure 9-14 HFO Steam Plant for Puerto Rico vs. Fossil Fuel Options for Florida and Interconnection at 400MW Figure 9-15 Fossil Fuel Option for USVI vs. Geothermal Plant / Submarine Interconnection Figure 9-16 Fossil Fuel Option for Sint Maarten vs. Geothermal plant / Submarine Interconnection at 100MW Figure 9-17 Fossil Fuel Option for Cuba vs. Fossil Plants / Submarine Interconnection at 400 MW Figure 9-18 Fossil Fuel Option for Haiti vs. Fossil Plants / Land Interconnection at 130 MW 9-30 Figure 9-19 Dominica Interconnections Figure 9-20 Nevis Puerto Rico and Nevis US Virgin Islands Interconnections Figure 9-21 Saba St. Maarten Interconnection Figure 9-22 Haiti Dominican Republic Interconnection Figure 9-23 United States (Florida) Cuba Interconnection Figure 9-24 Northern Ring Set of Interconnections Figure 9-25 Northern Ring Interconnections Alternative Figure 10-1 Cost Representation for Screening Analysis Method Figure 10-2 Illustrative Development of Least Cost Line (LCL) Figure 10-3 Least Cost Line Plus Renewable Energy Resources Figure 11-1 Screening Curves for Distillate-fueled Technologies Figure 11-2 Distillate vs. HFO Cost Comparison Figure 11-3 Screening Curves for Coal-fueled Technologies Figure 11-4 Fossil LCL and Wind for Antigua and Barbuda, Grenada, and St. Vincent and the Grenadines Figure 11-5 Fossil LCL for Barbados Figure 11-6 Other Options for Barbados Figure 11-7 Fossil LCL for Dominican Republic Figure 11-8 Other Options for Dominican Republic Figure 11-9 Fossil LCL for Guadeloupe Figure Other Options for Guadeloupe Figure Fossil LCL for Haiti Figure Other Options for Haiti Figure Fossil LCL for Jamaica Figure Other Options for Jamaica Figure Fossil LCL for Martinique Figure Other Options for Martinique Figure Fossil LCL for St. Lucia Figure Other Options for St. Lucia Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report vi

8 Contents Figure CO2 Cost Impact on Islands Using Only Distillate Figure CO2 Cost Impact on Islands with Coal on Fossil LCL Figure CO2 Cost Impact on Islands with Gas on Fossil LCL Figure CO2 Cost Impact on Country with Lowest Non-gas Fuel Prices Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report vii

9 Contents Acronyms and Abbreviations ABS AC ADO APC APUA ASME Aus BL&P BPD CC, CCGT CFB CHP CLFR CNG CO CO2 Cogen CSP CT DC DNV DOMLEC DR ECGP ECGPC EDF, EdF EDH, EdH EGS EHV EIA EIR EPR EPRI ESMAP ESP FGD Fin FSRU Ger GJ GP GRENLEC GT American Bureau of Shipping Alternating current Automotive diesel oil Antigua Power Company Antigua Public Utility Authority American Society of Mechanical Engineers Australia Barbados Light and Power Barrels per day Combined cycle gas turbine Circulating fluidized bed Combined heat and power Compact linear Fresnel reflector Compressed natural gas Carbon monoxide Carbon dioxide Cogeneration Concentrating solar power Combustion turbine Direct current Det Norske Veritas Dominica Electricity Services Limited Dominican Republic Eastern Caribbean Gas Pipeline Eastern Caribbean Gas Pipeline Company Electricite de France Electricite d'haiti Engineered geothermal systems Extra high voltage Energy Information Administration Environmental impact report Ethylene-propylene- rubber Electric Power Research Institute Energy Sector Management Assistance Program Electrostatic precipitator Flue gas desulfurization Finland Floating Storage and Re-gasification Units Germany Gigajoule Gas pipeline Grenada Energy Services Ltd. Gas turbine Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report viii

10 Contents GWH, GWh HDR HFO HHV HPFF HRSG HTF HV Hz IBRD IC ICGPL IDA ISO JPS kcmil kg kj km kv kw kwh LCL LFG LHV LNG LSD LUCELEC m MEM MI MI-IRC MMBTU MMscf MMscfd mm 2 MOU MPa mph MSD Mt Muni MVA MW MWe Gigawatt-hour Hot dry rocks Heavy fuel oil Higher heating value High pressure fluid filled Heat recovery steam generator Heat transport fluid High voltage Hertz (cycles per second) International Bank for Reconstruction and Development Internal combustion Intra Caribbean Gas Pipeline Limited International Development Association International Organization for Standardization Jamaica Public Service Thousand circular mils Kilogram Kilojoule Kilometer Kilovolt Kilowatt Kilowatt-hour Least cost line Landfill gas Lower heating value Liquefied natural gas Low speed diesel St. Lucia Electricity Services Ltd. Meter Ministry of Energy and Mining (Jamaica) Mass-impregnated MI cable with and integral return conductor Million British Thermal Units Million standard cubic feet Million standard cubic feet per day Square millimeters Memorandum of understanding Megapascal (1 MPa = pressure about equal to 145 pounds/square inch) Miles per hour Medium speed diesel Metric ton Municipal Megavolt-ampere Megawatt Megawatts electric Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report ix

11 Contents MWt Megawatts thermal NGC National Gas Company of Trinidad & Tobago NL Netherlands Nor Norway NOx Nitrogen oxide (NO or NO2) NPV Net present value NREL National Renewable Energy Laboratory O&M Operations and maintenance PC Pulverized coal PV Photovoltaic ROC Republic of China ROV Remotely operated vehicle SCFF Self-contained, fluid-filled SCGT Simple cycle gas turbine SCR Selective catalytic reduction SEGS Solar electric generating system SNCR Selective non-catalytic reduction SOx Sulfur dioxide and sulfur trioxide SSD Slow speed diesel Swe Sweden TES Thermal energy storage TOR Terms of Reference UK United Kingdom USA United States of America US DOE United States Department of Energy USVI United States Virgin Islands V Volt VINLEC St. Vincent Electricity Service Ltd. VSC Voltage source control W Watt WIPC West Indies Power Company XLP Special cross-linked polymeric insulated DC cables XLPE Cross-linked polyethylene 3/c XLPE 3-core XLPE cable (i.e., each of the three phases is in one of three separate conductors within a common armor) yr Year Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report x

12 Section 1 Executive Summary 1.1 INTRODUCTION The objective of this Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy (the Study) is to analyze the availability of technically and financially sound regional and sub-regional energy solutions for power generation rather than specific energy solutions for each Caribbean country. The energy solutions involve new fuels or fuel transport modes (pipeline gas, CNG, LNG, coal), new energy resources for power generation (primarily wind and geothermal), and new electrical interconnections among islands, none of which are presently interconnected. The immediate goal of studying these areas was to reduce the Caribbean islands dependence on high price imported distillate and HFO. A related goal was that solutions would emerge that reduced costs, reduced environmental impacts, and increased the integration of the Caribbean islands. The entire Caribbean region is presented on Figure 1-1. We note at the outset that we have identified no truly regional energy solutions, not even one covering the nine countries of primary emphasis mentioned in the second paragraph below. We have identified and analyzed, to varying degrees of detail, 11 submarine cable electrical interconnections between two countries and one land-based interconnection. Some of these twocountry sub-regional interconnections are part of larger schemes involving three or more countries. The only sub-regional fuel project the Study evaluated was the five-country Eastern Caribbean Gas Pipeline (ECGP). Schemes involving LNG or CNG implicitly or explicitly rely on some common facilities when more than one country is a user, but in that sense they are not different from the current delivery modes for distillate and heavy fuel oil (HFO) and were analyzed on a country-by-country basis. It is interesting that the goal of reducing dependence on high price imported oil products and the goal of reducing environmental impacts and increasing the integration of the region turned out to be complementary. The most direct benefit of an interconnection comes when one country has a source of low cost power and its neighbor does not. The three lowest cost resources for operation at capacity factors above about 30% are renewables: geothermal, wind (including the cost of backup generation), and small hydro. This assumes that high quality sites can be identified and acquired. Geothermal is the source of generation and drives the benefits for many of the interconnections. Thus geothermal on a local and sub-regional basis, and wind on a local basis, provide a path toward a less oil-dependent, lower cost, lower environmental impact, more sustainable future. The primary emphasis of the Study is on the nine countries in the Caribbean eligible for support from the International Development Association (IDA) and/or the International Bank for Reconstruction and Development (IBRD). Those countries are presented, together with their relative electricity market share, on Figure 1-2. These nine include: Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-1

13 Six small countries in the Lesser Antilles: St. Lucia, St. Vincent and the Grenadines, Grenada, Antigua and Barbuda, St. Kitts and Nevis, and Dominica, total combined population about 600,000 Three countries located on two of the four islands in the Greater Antilles: Haiti and the Dominican Republic, both on the island Hispaniola, and Jamaica, total population about 22,000,000 The Study also considered other relevant countries, presented on Figure 1-3, that might be part of a regional energy solution. In addition to the nine countries mentioned above, we visited or obtained significant data on Barbados 1, Trinidad and Tobago, and Martinique; somewhat less on Guadeloupe; and cursory information on Puerto Rico, Sint Maarten, and Cuba. We also obtained cursory information on power generation in Florida. 1 Barbados was addressed in more details as par of the Eastern Caribbean Gas Pipeline project analysis. Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-2

14 Figure 1-1 Caribbean Regional Map Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-3

15 Figure 1-2 Countries Included in the Study Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-4

16 Figure 1-3 Other Relevant Countries Addressed in the Study Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-5

17 1.2 APPROACH Our approach included the following main steps: Collect the foundation data needed to conduct the work Prepare a peak and energy demand forecast for each country and the Study countries as a whole Forecast fuel costs for all fuels used, including pipeline gas, LNG, CNG, and coal Estimate fuel transportation costs for each fuel to each country and determine effective fuel price Determine the performance and cost parameters of all existing power generation units Determine the performance and cost parameters of power generation units suitable for meeting future demand Evaluate the cost and performance parameters for power generation from renewable energy, and estimate the availability of renewable energy resources Evaluate submarine cable technology Identify and evaluate submarine cable and land-based transmission interconnections Develop scenarios that include a range of approaches to regional power generation, and combine the most attractive components in an proposed scenario Report on and present the results (such as in this report) 1.3 LOAD FORECAST Tables 1-1 and 1-2 provides peak and energy demand forecasts for each country / island and for the region as a whole. Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-6

18 Table 1-1 Net Peak Demand Load Forecast (MW) Year Antigua and Barbuda Barbados Dominica Dominican Republic Grenada Haiti Jamaica St. Kitts Nevis St. Lucia St. Vincent and Martinique Guadeloupe Grenadines , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,109 Growth Rate 3.3% 3.5% 2.7% 3.4% 5.4% 5.0% 4.3% 3.5% 5.9% 3.8% 6.9% 2.5% 2.5% 3.6% Total Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Interim Report 1-7

19 Table 1-2 Net Generation Forecast (GWh) Year Antigua and Barbuda Barbados Dominica Dominican Republic Grenada Haiti Jamaica St. Kitts Nevis St. Lucia St. Vincent and Martinique Guadeloupe Grenadines , , , ,575 1,663 23, , , , ,620 1,720 24, , , , ,672 1,775 25, , , , ,727 1,832 26, , , , ,783 1,888 27, , , ,063 5, ,840 1,947 28, , , ,169 5, ,900 2,003 29, , , ,286 5, ,938 2,060 30, , , ,415 6, ,978 2,117 31, , , ,556 6, ,018 2,174 32, , , ,712 6, ,058 2,233 33, , , ,883 7, ,100 2,284 35, , , ,977 7, ,142 2,337 36, , , ,076 7, ,186 2,390 37, , , ,180 8, ,230 2,445 39, , , ,289 8, ,275 2,501 40, , , ,403 8, ,321 2,559 41, , , ,523 9, ,368 2,618 43, , , ,650 9, ,416 2,679 44, , , ,782 9, ,465 2,741 46,490 Growth Rate 3.9% 3.2% 2.5% 3.4% 5.3% 7.9% 4.3% 2.9% 5.2% 3.1% 6.9% 2.4% 2.7% 3.7% Total Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Interim Report 1-8

20 1.4 FUEL SUPPLY The forecast levelized price of distillate over , the assumed study period for the new projects being considered, is US$22.45/GJ. Each country except Dominica has at least one lower cost fuel option, and many countries have more than one. Table 1-3 provides the comparative prices. Distillate, LNG, and pipeline gas can be compared directly because they can fuel the same generators. Coal fuels generators with higher capital costs and higher heat rates, which must be taken into account in comparing fuel options. The prices of all fuels except distillate vary from country to country because they include transportation costs that vary. Table 1-3 Fuel Prices Based on Yearly Demand Fuels Selected in Addition to Coal and Distillate Levelized Fuel Price, US$/GJ Fuel Selected Coal Distillate Country Antigua and Barbuda None N/A Barbados Pipeline Gas Dominica Distillate only N/A N/A Dominican Republic LNG Grenada None N/A Guadeloupe Pipeline Gas Haiti LNG Jamaica LNG Jamaica North LNG Martinique Pipeline Gas St. Kitts and Nevis None N/A St. Lucia Pipeline Gas St. Vincent and Grenadines None N/A Coal is an optional fuel for every country except Dominica, where preliminary analysis showed it to be more costly than distillate on a US$/GJ basis. Table 1-3 shows the following: Every country except Dominica has at least one fuel option lower in price than distillate Pipeline gas is the lowest cost natural gas option for every country reached by the ECGP: Barbados, Martinique, St. Lucia, and Guadeloupe Coal is the only optional fuel for Antigua and Barbuda, Grenada, St. Kitts and Nevis, and St. Vincent and Grenadines LNG is the lowest cost natural gas option for Dominican Republic, Haiti, Jamaica, and Jamaica North Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-9

21 CNG was considered and was the lowest cost gas option for several countries, but for those countries was always higher in cost than distillate and therefore does not appear in Table It was considerably lower than distillate for some countries, but was more costly than LNG in those countries. Though not studied in the same detail as the other fuel options, mid-scale LNG may provide an economically attractive option for some countries. 1.5 PROJECT AND TECHNOLOGY ANALYSIS Screening analysis is an approach to comparing the costs of different technologies to determine the least cost technology across the range of annual capacity factors: Uses simplified representations of generation costs to help identify least cost generating technologies Plots annual cost in $/kw-year vs. capacity factor for a set of power plant and/or fuel options The cost in $/kw-yr can also be easily expressed in cents/kwh, which are also of interest but are curved and somewhat harder to interpret than the straight lines in $/kw-yr Annual cost is sum of: Annualized investment-related costs based on initial capital investment, discount rate, and plant lifetime Fixed annual operation and maintenance (O&M) Variable cost (includes fuel cost and variable O&M costs) per kwh times capacity factor times hours per year Selects lowest cost resources at each capacity factor, producing the least-cost line for that set of resources Isolated Countries / Islands Figure 1-4 illustrates the screening analysis approach. It presents the Fossil Least Cost Line (Fossil LCL) that applies for the Dominican Republic. The word Fossil means that only fossil fueled generation is included in determining the LCL. The scale in $/kw-yr for the solid lines is on the left, the scale in cents/kwh for the dotted lines is on the right. The Fossil LCL comprises 50 MW GT on LNG for capacity factors of zero through 20%, the 300 MW CC on LNG for capacity factors from 25% through 40%, and the conventional coal plant for capacity factors from 45% through 90%. In other words, the generation expansion plan based on this analysis would include gas turbines for peaking duty, combined cycles for mid-range duty, and conventional coal for base load duty. In order to achieve the Fossil LCL the Dominican Republic would have to undertake large capital investments for expansion related to coal and LNG transportation, and for coal plants themselves. This may pose a challenge, even if the desire to do so exists. LNG is preferable for application at lower capacity factors, coal for application at higher capacity factors. The scenario analysis provides more information on which is preferable overall, if doing both is not feasible. Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-10

22 Figure 1-5 expands upon Figure 1-4 by adding wind, small hydro, and fossil options to the graph of Figure 1-1. The small hydro line coincidentally overlaps with the wind with backup line at capacity factors from 30% to 40%. Wind with backup, which is typically a better comparison than wind without backup, is now marginally economic at the capacity factors where it might operate at a good site. Wind with backup simply adds the full cost of operation of a 50 MW gas turbine at 5% capacity factor to the costs of wind without backup, which also adds 5% to the capacity factor. Figure 1-5 also illustrates what might occur if neither coal nor LNG is available for future generation for the Dominican Republic. The periwinkle line represents the cost of a 300 MW HFO-fueled steam plant. Without expanded supplies of LNG or coal, costs will more than triple at high capacity factors. Dominican Republic has under construction or planned considerable new small hydro and wind generation. Figure 1-5 illustrates the desirability of such an approach where good sites can be identified. Annual Cost, $/kw-year 2,500 2,000 1,500 1, Fossil Least Cost Line, US/kW-yr 50 MW GT LNG US$/kW-yr 300 MW CC LNG US$/kW-yr 300 MW Conv Coal, US$/kW-yr Fossil LCL, US cents/kwh Cost, US cents/kwh 0 0 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Capacity Factor, % Figure 1-4 Fossil LCL for Dominican Republic Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-11

23 2, Annual Cost, $/kw-year 2,000 1,500 1, Fossil Least Cost Line, US/kW-yr 1.5 MW Wind US$/kW-yr 1.5 MW Wind w/backup US$/kW-yr 300 MW ST HFO DR US$/kW-yr Small Hydro US$/kW-yr Fossil LCL, US cents/kwh Cost, US cents/kwh 0 0 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Capacity Factor, % Figure 1-5 Other Options for Dominican Republic The bullets below summarize the least cost technology/fossil fuel combination by country as determined by screening analysis. This considers the countries and islands as isolated systems. For some countries, imports via submarine cable (to be discussed later) provide a lower cost solution. We eliminated the technology/fuel combinations that were least cost at only one annual capacity factor, such as zero or 90%. Scenario analysis generally supports these conclusions, though multiple fuels were not used as much. Individual Countries Antigua and Barbuda, Grenada, and St. Vincent and Grenadines: 10 MW MSD on distillate for peaking and mid-range duty, and the coal-fueled CFB for base load duty Coal-fueled CFB is only marginally more economic than distillate fueled medium speed diesels (MSD) plants; CO2 costs of US$50/tonne would make the distillatefueled units more economic than the coal-fueled units Dominica, St. Kitts, and Nevis: 5 MW MSD on distillate for peaking, mid-range, and base load duty St. Kitts and Nevis are fortunate that a geothermal resource sufficient to serve all their demand has been confirmed and is in the process of development. For Dominica it seems highly probable that a geothermal resource sufficient to serve at least local demand will be confirmed and developed. None of these islands may not need to install any new distillate-fueled generation. Dominican Republic: 50 MW GT on LNG for peaking duty, 300 MW CC on LNG for mid-range duty, and 300 MW conventional coal plant for base load duty Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-12

24 The Dominican Republic already has an LNG terminal and coal-fueled power plants. Scenario analysis shows that coal is preferred if only one fuel can be selected for future additions. However, incorporating CO2 costs in the analysis would compromise coal s advantage. With the Dominican Republic s large demand, expanding the use of both fuels may be feasible, even if new facilities are needed. Haiti: 20 MW LSD on LNG for peaking, mid-range, and base load duty. LNG provides very large benefits but requires significant up-front capital expenditures Jamaica and Jamaica North: 50 MW GT on LNG for peaking duty, 20 MW LSD on LNG for mid-range duty, and 50 MW coal-fueled CFB base load duty Today Jamaica and Jamaica North have neither fuel. It seems unlikely that they would want to develop both fuels. If only one is to be developed, LNG is preferred, and its advantage would increase if CO2 costs are incorporated in the analysis. We emphasize that for some countries, imports via submarine cable provide a lower cost solution. This is addressed in the next subsection. Sub-regional Gas Market The ECGP links the markets of the four countries and provides the benefits of economies of scale compared to individual development. Barbados, Guadeloupe, Martinique, and St. Lucia: 20 MW GT on pipeline gas for peaking duty and 20 MW LSD on pipeline gas for mid-range and base load duty For all four countries the pipeline gas is less than half as costly as distillate. For all but St. Lucia, LNG is more costly than pipeline gas but significantly less costly than distillate. The low gas price reduces the benefits of renewables and for Martinique and Guadeloupe makes importing geothermal power from Dominica via submarine cable marginal. Figure 1-6 illustrates the ECGP gas connections among the countries. Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-13

25 Figure 1-6 Eastern Caribbean Gas Pipeline (ECGP) Proposed Route Sub-regional Electricity Markets The first three bullets below show the interconnections studied with greatest emphasis. All the interconnections were submarine cables except the Dominican Republic Haiti link noted in the bottom bullet. The interconnections are presented in Figures 1-7 to For each interconnection we note its capacity in MW, length in km, cost per kw for interconnection and related facilities only, source of export power, and economic attractiveness. Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-14

26 Nevis St. Kitts, 50 MW submarine cable capacity, 5 km submarine cable length, US$328/kW (interconnection and related facilities only), geothermal power export, highly economic Dominica Martinique, 100 MW, 70 km, US$588/kW (interconnection and related facilities only), geothermal power export, marginally economic if displaced fuel is gas from ECGP, more economic if displaced fuel is higher cost Dominica Guadeloupe, 100 MW, 70 km, US$588/kW (interconnection and related facilities only), geothermal power export, moderately economic if displaced fuel is gas from ECGP, more economic if displaced fuel is higher cost Nevis Puerto Rico, 400 MW, 400 km, US$1,791/kW (interconnection and related facilities only), geothermal power export, highly economic if displaced fuel is HFO, not economic if displaced fuel is LNG Nevis US Virgin Islands, 80 MVA, 320 km, US$3,541/kW (interconnection and related facilities only), geothermal power export, only marginally economic even though the displaced fuel is distillate Saba St. Maarten, 100 MW, 60 km, US$528/kW (interconnection and related facilities only), geothermal power export, highly economic if displaced fuel is distillate and St. Maarten can accept 100 MW United States (Florida) Cuba, 400 MW, 400 km, US$1,791/kW (interconnection and related facilities only), export from coal-fueled steam plant or gas-fueled combined cycle, highly economic if displaced fuel is HFO Dominican Republic Haiti, 250 MW, 563 km, US$1,899/kW (interconnection and related facilities only), land interconnection, export from HFO fueled steam plant, not economic unless export is from lower cost unit/fuel combination We also developed basic data and cost estimates for four potential interconnections that might form part of a Northern Ring, a conceptual set of interconnections in the northern Caribbean, potentially linking Florida Cuba Haiti Dominican Republic Puerto Rico Nevis, or some subset of those areas. The Northern Ring interconnections not covered above include: Puerto Rico Dominican Republic, 400 MW, 150 km, US$705/kW (interconnection and related facilities only) Haiti Cuba, 400 MW, 200 km, US$705/kW (interconnection and related facilities only) Haiti Jamaica, 400 MW, 250 km, US$998/kW (interconnection and related facilities only) Florida Haiti, 400 MW, 1,100 km, US$3,488/kW (interconnection and related facilities only We did not conduct economic analysis on these four interconnections. The cost per kw for the three shorter interconnections is in what might be an economically viable range if the sending country had low power costs and the importing country s displaced fuel was distillate, HFO, or crude. The Florida Haiti interconnection appears to be outside that range. Costs for the middle Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-15

27 islands would involve their sharing some of the costs of interconnections closer to the low-cost source, making favorable economics more difficult to achieve. Figure 1-7 Dominica Interconnections Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-16

28 Figure 1-8 Nevis Puerto Rico and Nevis US Virgin Islands Interconnections Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-17

29 Figure 1-9 Saba St. Maarten Interconnection Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-18

30 Figure 1-10 Haiti Dominican Republic Interconnection Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-19

31 Figure 1-11 United States (Florida) Cuba Interconnection Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-20

32 Figure 1-12 Northern Ring Set of Interconnections Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-21

33 Figure 1-13 Northern Ring Interconnections Alternative Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-22

34 1.5.3 Renewable Energy Wind, geothermal, small hydro, and biomass technology/fuel combinations have the potential, at a good site, to be considerably less costly than distillate fueled power generation. The three lowest cost resources for operation at capacity factors above about 30% are renewables: geothermal, wind (including the cost of backup generation), and small hydro. This assumes that high quality sites can be identified and acquired. Solar PV and solar trough CSP are not competitive for bulk power generation. There are many small solar PV installations in Martinique due to subsidies, and solar PV is competitive for off-grid locations. If a lower cost fuel such as pipeline gas were the competitive fuel, the advantage of the renewable technology would be less. Figure 1-14 compares renewable technologies to the Distillate LCL that results when distillate is the only fuel available. The scale in $/kw-yr for the solid lines is on the left, the scale in cents/kwh for the dotted lines is on the right. The Distillate LCL, in blue, represents the benefit of a renewable energy option. Its generation would displace generation at a cost along that line. Where a renewable energy option s line is below the blue line, there is a net benefit. It reduces costs elsewhere that are more than its own costs. Where it is above the blue line, it represents a net cost. Most of the renewable technologies are shown at a range of capacity factors they might reasonably achieve at a good site. Geothermal is also based on a good site, and is shown over the entire capacity factor range because it is not limited by resource availability once the resource has been defined. Wind with backup simply adds the full cost of operation of a 20 MW LSD at 5% capacity factor to the costs of wind without backup, which also adds 5% to the capacity factor. Biomass costs assume that biomass costs the same as export coal in the US. Figure 1-14 shows that all but two of the renewable energy technologies have the potential, at a good site, to be considerably less costly than distillate fueled power generation. Solar PV and solar trough with six hour storage are above the Distillate LCL. If a lower cost fuel such as pipeline gas were the competitive fuel, the advantage of the renewable technology would be less and might disappear. Figure 1-15 compares renewable technologies to the Fossil LCL for Barbados, which has the lowest cost gas fuel of any of the countries studied. The renewable technologies offer much smaller net benefits, small hydro and wind with storage are marginally economic, biomass is not economic, and the technologies that were not economic before are less competitive. Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-23

35 Annual Cost, $/kw-year 2,500 2,000 1,500 1, Distillate LCL, US$/kW-yr 1.5 MW Wind Turbine 1.5 MW Wind w/backup Commercial PV 500 kw 20 MW Geothermal Small Hydro Biomass Solar Trough 6 hr Storage Distillate LCL, US cents/kwh Cost, US cents/kwh % 10% 20% 30% 40% 50% 60% 70% 80% 90% Capacity Factor, % Figure 1-14 Distillate LCL vs. Renewable Energy Options Annual Cost, $/kw-year 2,000 1,500 1, Fossil Least Cost Line, US/kW-yr 1.5 MW Wind Turbine 1.5 MW Wind w/backup Solar Trough 6 hr Storage Series6 Commercial PV 500 kw 20 MW Geothermal Small Hydro Biomass Fossil LCL, US cents/kwh Cost, US cents/kwh 0 0 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Capacity Factor, % Figure 1-15 Barbados LCL vs. Renewable Energy Options Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-24

36 1.5.4 CO2 Costs If a tax or similar levy were attributed to each tonne of CO2 emissions, the cost of using fuels would increase. This would open wider the economic window for technologies that produce lower or no CO2 emissions. However, all the countries today primary fuel is distillate and/or HFO, so the window is already quite wide. We investigated the impact if a cost of US$50/tonne were attributed to CO2 emissions. At US$50/tonne, the effective price of fuels would increase in a range from US$2.52 for distillate to US$4.41 for coal, representing increases ranging from 15% for distillate to 91% for the lowest cost coal for the Study islands. In the bullets below we measure the impact of CO2 costs by how technology choices change when it is applied. Countries with small demand: The fuel prices are high even when coal fuels some of the least-cost generation. For Antigua and Barbuda, Grenada, and St. Vincent and Grenadines, the preferred fuel would switch from coal to distillate. The renewable energy resources that were economic before are now somewhat more economic, and those that were not economic edge closer to being competitive. Countries with medium or high demand. The fuels are much less expensive than distillate and therefore the displaced generation is lower in cost, narrowing the economic window for alternatives. For the Dominican Republic, Jamaica, and Jamaica North, incorporating CO2 costs in the analysis would probably eliminate coal s advantage over LNG or increase LNG s advantage over coal. With no CO2 cost the renewables that were economic for the islands with small demand are still economic, though in some cases only marginally so. Incorporating CO2 costs makes renewables more competitive. 1.6 REGIONAL STRATEGIES For all Study countries combined, costs including fuel savings from exports and interconnection costs were: US$31,985 million for the Base Case Scenario US$29,424 million for the Fuel Scenario US$29,415 million for the Interconnection/Renewable Scenario US$27,619 million for the Integrated Scenario Table 1-4 presents cost differences among Scenarios by system as well as differences in Scenario total costs. The Fuel Scenario and Interconnection/Renewable Scenarios both reduce costs by about US$2.5 billion compared to the Base Case. The Integrated Scenario reduces costs by Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-25

37 about US$ 4.3 billion, showing that the Integrated Scenario captures most of the individual benefits of each of the other two Scenarios. Table 1-4 Scenario NPV Cost Differences - Base Case Minus Other Scenario Costs (million US$) Fuel Scenario Interconnection/ Renewable Scenario Integrated Scenario Antigua and Barbuda Barbados Dominica Dominican Republic Grenada Haiti Jamaica St. Kitts Nevis 0 1,135 1,135 St. Lucia St. Vincent and Grenadines Total 2,561 2,570 4,365 The costs of the interconnections and the fuel savings from the exports of geothermal power are attributed to Dominica and Nevis. All numbers in Table 15-2 have positive values (except for zeros for Dominica, St. Kitts, and Nevis for the Fuel Scenario), meaning that each Scenario and each country in each Scenario provides cost savings compared to the Base Case. 1.7 COUNTRY SUMMARIES Each country summary below presents paragraphs on: Overview Current and Forecast Load Fossil Fuel Options Renewable Generation Potential Development Scenarios (development plans for the Base Case Scenario, the Fuel Scenario, the Interconnection/Renewable Scenario, and the Integrations Scenario) Discussion of Country Results Antigua and Barbuda Overview: Antigua Public Utility Authority (APUA) is responsible for the power generation, transmission, and distribution of electricity in Antigua and Barbuda. APUA purchases most of the power from Antigua Power Company (APC), a private company. Antigua and Barbuda Caribbean Regional Electricity Generation, Interconnection, and Fuels Supply Strategy Final Report 1-26