Jamaica Biofuels Report - Ministry of Energy

More documents

Recommendations

Info

support prices when they are too low to amortize investments in production. In that way, thefund would provide a hedge against investors’ risk of fluctuations in world oil prices.A funding mechanism along these lines would not have to be built in Jamaica from scratch. Thecountry already counts on the Development Bank of Jamaica and the Agricultural SupportServices Project, institutions that could play key roles in establishing and administering it.Feedstock and Electricity PricingTwo issues that arose in the formulation of the biofuels policy were pricing arrangements forsugar cane produced by independent farmers and for independent power exported to theelectrical grid by processing installations. Although the feasibility study could estimate thecosts and benefits of biofuel production, such an analysis cannot readily determine how theachievable benefits should be divided among interested parties. For example, the studyestimated that, at least in the case of cogeneration at one Jamaican sugar mill, a price of $0.15per kWh for cogenerated electricity would result in an annual return of approximately 15percent. The study also estimated that the value of electricity to the national grid, expressedas avoided cost, was between $0.20 and $0.25 per kWh. Whether a return of 15% is sufficientto result in equity being invested in a new biofuel cogeneration plant, and how the potentialnet benefit of $0.05 to $0.10 per kWh should be distributed among the investor, the utilityrate payer, and the public service company remains to be determined, presumably throughnegotiations among prospective producers, Jamaica Public Service, and the Office of UtilityRegulation.Similarly, cane prices paid to farmers by sugar mills have been based historically on theproduction of granular sugar and do not reflect any additional benefits associated withbioethanol or energy sales. As the sector become more multi-product oriented, a moresophisticated payment model will be needed to incentivize farmers to provide sugar mills withfeedstock that maximizes overall value. These pricing arrangements will require negotiationbetween the cane growers and the sugar mill estates and possibly others.Finally, the study estimates based on Brazilian experience that biodiesel from plants likecastor, and by extension jatropha, are unlikely to be produced economically without someform of subsidy. Such a subsidy may be justified as a means to slow urban migration or as anoffset against other costs associated with rural poverty. How such a subsidy, if justified, mightoperate, and at what level is another feedstock price-related subject for agreement among thegovernment and other parties involved in any prospective biodiesel industry.An expanded biofuels task force could play a key role in identifying the parties, bringing themtogether, and providing a neutral forum for resolving differences and reaching agreement onhow to distribute the benefits of biofuel ventures. The result would be to enlist thecooperation of all parties, so projects can move forward.110
Project ImplementationTask Force activities will focus on establishing the basis for project implementation andfacilitating ensuing activity, which will be largely led by the private sector. If the feasibilitystudies’ results are positive, pricing negotiations are successful, public support is forthcoming,and a financing mechanism comes into being, project developers should be in a position tomove forward with major investments in biofuel facilities. The next steps would include finalcontractual and financing arrangements, detailed design and bid preparation, site preparation,facility construction and shakedown, and commencement of operation.Jamaica Biofuel Implementation ScheduleYear2011 2012 201320142015Quarter 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4Biofuels Task ForceAppoint coordinatorExpand membershipElect chairSelect feasibility study targetsOversee feasibility studiesInputs to technology surveillanceMonitoring and new program initiativesTechnology SurveillanceContinuing agronomic studiesExpand SIRI RoleTechnical ExchangesGrant-supported university researchFeasibility StudiesGather data; confer with ownersDesign systemsEstimate costs and revenue requirementsAnalyze feasibilityReport resultsFinancing MechanismsExplore interest with investorsDevelop legal frameworkIssue securitiesMake loans to project developersOngoing management; price stabilizationPricing NegotiationsElectric powerCane feedstockVegetable oil/oilseed feedstocksProject No. 1 ImplementationContracts and project structureFinancial closing; commitment to proceedDetailed design and specificationsSite preparationFacility constructionFacility operation beginsProject No. 2 ImplementationContracts and project structureFinancial closing; commitment to proceedDetailed design and specificationsSite preparationFacility constructionFacility operation begins111
Page 1 and 2:
Assistance for Biofuels Developm
Page 3 and 4:
TABLE OF CONTENTSEXECUTIVE SUMMARY
Page 5 and 6:
All countries with commercial biodi
Page 7 and 8:
2. Biomass Resource Identification2
Page 9 and 10:
Figure 2: Areas of land in classes
Page 11 and 12:
conditions accumulates dry mass und
Page 13 and 14:
1. Sugar cane varieties and observa
Page 15 and 16:
Sugar cane is naturally tolerant to
Page 17 and 18:
fermentable sugars are calculated f
Page 19 and 20:
purchased in some form from elsewhe
Page 21 and 22:
welfare, but sustainable production
Page 23 and 24:
spacing) for cattle, pigs and other
Page 25 and 26:
3. Human and Institutional Resource
Page 27 and 28:
Finally, Universities can also prov
Page 29 and 30:
Exemption from import duties of cap
Page 31 and 32:
farmers and Midwestern states, wher
Page 33 and 34:
form methyl esters. The caloric val
Page 35 and 36:
cost would be, to future world ener
Page 37 and 38:
Figure 6: Typical financing structu
Page 39 and 40:
5. Processing and Distribution5.1 T
Page 41 and 42:
are produced and stored for later p
Page 43 and 44:
operator and PCJ (and other blender
Page 45 and 46:
Figure 9: Schematic representation
Page 47 and 48:
Figure 11: Schematic representation
Page 49 and 50:
agroenergy/biofuels operations in t
Page 51 and 52:
ANNEX IPublic Education and Outreac
Page 53 and 54:
In the scoping assessment, input wa
Page 55 and 56:
Run over a longer period so that th
Page 57 and 58:
estates is completed. The large mil
Page 59 and 60: (a) What waste vegetable oils are o
Page 61 and 62: (g) Information on long term supply
Page 63 and 64: (f) Information to control the spre
Page 65 and 66: Jamaica BroilersJamaica Public Serv
Page 67 and 68: The Jamaica Manufacturers’ Associ
Page 69 and 70: phone hotline and email address wit
Page 71 and 72: ut first, the necessary steps need
Page 73 and 74: etc.), and that labour laws arecomp
Page 75 and 76: campaign management team.75
Page 79 and 80: Annex Ib. BudgetThe budget below is
Page 81 and 82: Activity 5: Best practices forbiofu
Page 83 and 84: Annex Ic. Useful resources for educ
Page 85 and 86: ANNEX IIPilot Project Identificatio
Page 87 and 88: Over the 15 years of its depreciate
Page 89 and 90: Figure 3: Effect of the selling pri
Page 91 and 92: Pilot Project: Duckenfield Estate -
Page 93 and 94: Additional assumptions involve exte
Page 95 and 96: Sensitivity to Sugar Price30.00%25.
Page 97 and 98: Sensitivity to Ethanol Price30.00%2
Page 99 and 100: Pilot Projects: Discussion of Other
Page 101 and 102: Pilot Project: Biodiesel RefineryBa
Page 103 and 104: iodiesel subsidize it one way or an
Page 105 and 106: Financial Analysis for 3 Million Ga
Page 107 and 108: ANNEX IIIJamaica Biofuels Implement
Page 109: In-Depth Project Feasibility Studie
Page 113 and 114: This table summarizes the area (ha)
Page 115 and 116: Clarendon Figure 1115
Page 117 and 118: Hanover Figure 1117
Page 119 and 120: Kingston St. Andrew Figure 1119
Page 121 and 122: Manchester Figure 1121
Page 123 and 124: Portland Figure 1123
Page 125 and 126: Saint Ann Figure 1125
Page 127 and 128: Saint Catherine Figure 1127
Page 129 and 130: Saint Elizabeth Figure 1129
Page 131 and 132: Saint James Figure 1131
Page 133 and 134: Saint Mary Figure 1133
Page 135 and 136: Saint Thomas Figure 1135
Page 137 and 138: Trelawny Figure 1137
Page 139 and 140: Westmoreland Figure 1139
Page 141: ANNEX VSummary of Sugarcane industr
show all

Jamaica Biofuels Report - Ministry of Energy

Create successful ePaper yourself

Delete template?

Save as template?