Jan Keil | Want to reduce electricity costs? Go 100% renewable
Published:Wednesday | December 26, 2018 | 12:00 AM
Electricity in Jamaica is expensive.
Full costs for final users run about $40 for households and $30 for companies. Comparatively, in the United States full retail prices for households are at US$0.10 ($13) in some states, while industrial users in the southwest pay less than US$0.06 ($8).
Even worse, perhaps, are power outages and frequent load fluctuations. Many complex and extremely expensive industrial machines are damaged when load levels fluctuate even marginally (ever seen your light bulb flickering?). This prevents industrialisation that utilises expensive and sensitive equipment and machinery.
Most of Jamaica's electricity runs on diesel, which is by far the worst possible source of electric energy one can choose. It is dirty, extremely expensive, and prices are more volatile than with any other source of power generation. This is why alternatives are often discussed in Jamaica. They range from wind and photovoltaics to natural gas, coal, and even nuclear energy. The latter two ideas are somewhat terrifying.
Jamaica already suffers from the results of climate change that is driven by burning fossil fuels. Hurricane frequencies and temperature levels have already increased, significantly. If we turn the heat up by a few more degrees, the entire Caribbean region may become uninhabitable, possibly with continuous hurricanes all year long.
Energy policy here is less about adding a few tons carbon dioxide, or C02, to world emission levels. It is about setting an example for the many small island states around the world and creating followers. It is also about international bargaining leverage for an environmental policy that more effectively reduces CO2 emissions.
Jamaica suffers more than others from climate change, and it will lose all arguments to fight it if it maintains diesel or adds coal.
Equally important, costs of electricity generation are higher for fossil fuels than for renewables, and they are unpredictable. Power plants last 60 years and longer. And we have no idea what the price of natural gas will be even five years from now.
This risk for private operators and the national economy is only exceeded by that of nuclear power, where one out of 100 power plants, on average, experience a nuclear meltdown. Even countries like Japan, with a culture of almost perfectionist responsibility and commitment to quality, fail to control this technology.
Today, rates of technological change in renewable energy are rapid, and the uncertainty regarding fossil fuel prices is extraordinary. In this world, power plants running on diesel, gas, coal and nuclear technology are uneconomical. And this does not even account for social costs created by fossil fuel plants raising CO2 levels and polluting the air. Those are subsidies paid for by every citizen in the nation.
What is the alternative? Wind energy and, especially, photovoltaics. Even unsubsidised 20-year power-purchase agreements between private companies run at prices of as little as US$0.03 per kWh today. And panel manufacturers, as much as plant operators, lower costs and increase efficiencies on a monthly basis with larger module form factors (for example, First Solar's new Series 6), drone application at the plant development stage, and cleaning robots in the servicing operations (for example, the SunPower Oasis system).
Energy storage
Jamaica needs large, utility-scale solar farms. They are by far the cheapest source of electricity available today, and conditions on this island are perfect. Solar radiation levels in the Jamaican south are as high as in regions that are breaking cost records.
People always think the big problem is: 'What about when there is no sunlight?' But, when it is cloudy, which is bad for solar, it is usually windy, which is great for wind energy. Additionally, with a few modifications, load generated by hydroelectric power plants can be reduced at daytime and increased at night. Existing diesel generators could even be sealed and kept as an emergency backup.
The no sunlight-no wind problem at night has a full and simple solution, one that is 100 years old and proven like no other technology in the electricity industry. Its name is 'pumped hydroelectric energy storage'.
Hydro plants have two water reservoirs: one at a higher and the other at a lower elevation. When there is too much electricity, turbines pump water into the higher basin, generating potential energy. When there is not enough electricity, water runs through turbines from the upper into the lower reservoir, generating electricity.
Overall energy losses in these facilities are less than 20 per cent. They have an economic lifetime of well over 100 years, possibly up to several centuries. Some plants in Germany survived two world wars. Japan even has a plant pumping salt water.
Hydro facilities are extremely valuable for stabilising the grid and restarting the system after a blackout. And now the most important part, storage costs, run as low as US$0.025/kWh.
Again, geographical conditions in Jamaica - with its abundance of water and dramatic terrain elevations close to streams and the coastline - are perfect for these plants.
The Spanish island, El Hierro, has such a system where pumped storage is linked to a set of wind turbines. It is successful even though conditions are much worse than they are here. There is literally no rational reason electricity on this island is not 100 per cent renewable and why it does not cost a tiny fraction of what we pay for it today.
If Jamaica follows best standard practice, overall costs of electricity generation, plus storage, can add up to US$0.03 at daytime and US$0.055 at night. Accounting for inefficiencies, distribution and theft, the cost would double to US$0.11. But this is still one-third of today's price.
And, no diesel burnt.
- Jan Keil is lecturer/assistant professor in the Department of Economics, University of the West Indies, Mona.