CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : MAY 2014
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CARIBBEAN Petroleum Update A Publication of the Caribbean Energy Information System (CEIS)
MAY 2014 ISSUE
Net Metering
vs Net Billing
Image source: http://bv.com/
To access CEIS website
Since the first oil shock in the 1970’s, the Caribbean has faced energy challenges. The macroeconomic impact the importation of fuel has had on regional economies has been severe. As a consequence the electricity infrastructure in most Caribbean countries has been plagued with high electricity costs. Due to our heavy reliance on imported oil, countries in the Caribbean continue to experience anaemic growth performance which is reflected in their deteriorating performance indicator such as high levels of debt to GDP ratio. High electricity prices erode the competitiveness of the regional economies and, therefore, their ability to earn the required foreign exchange to pay for imports, including oil. For regional economies to improve international competitiveness the energy landscape has to change which should also positively impact the electricity infrastructure. This paradigm shift has been taking place in the Caribbean with the inclusion of renewable forms of energy hydro, solar and wind. These options have contributed to the lowering of electricity costs in the Caribbean, however more can be done. With a renewed focus on enhancing regional energy security, utility companies in the Caribbean have sought to introduce technologies to effectively utilize renewable energy resources as well as incorporated energy conservation measures that would allow individuals to contribute to the cause of lowering
electricity on a macro level by improving on a micro level. Two such measures are Net Metering and Net Billing. In this issue of the Petroleum Update we seek to highlight the difference between these two measures and any derived benefit to consumers and providers in Jamaica. Can you imagine paying zero on your electricity bill and at the same time be able to sell excess energy to the national grid? Net Billing allows customers who generate electricity for their own use from renewable sources to supply the excess energy to the national grid. On the other hand, under Net Metering, energy which the customer generates from renewable sources for personal use is metered so that any excess electricity generated can be credited to the customer’s account for future consumption. For Net Metering the energy billing aspect is based on the difference of the kWh exchanged between the customer and the utility provider. The arrangement assumes that there is a similar price between the customer and the provider at which the kWh energy is exchanged. Simply put, when a residential customer installs a renewable energy system in their homes, for example a Solar PV System, the customer generates electricity while the sun shines. This electricity is either consumed or goes to the electric grid via a metering system. When the excess energy generated goes to the grid, this
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CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : MAY 2014
Net Metering vs Net Billing continued from page 1/ decreases the net kWh reading on the customer’s meter, meaning the meter rolls backwards. However, if for any reason the customer energy generated is insufficient, energy can be taken from the grid. In this case the meter will roll forward and the net kWh will increase for that month. Where Net Billing is concerned, the customer generates electricity and any excess is purchased by the utility company. A rate lower than the retail rate is applied to the energy sent to the grid, consequently the money value is applied to the electricity bill of the customer as a credit or a reduction in their bill. With Net Billing the utility company uses two meters, one to account for the energy sent to the grid and another to account for the energy received from the customer. Net Billing has been chosen by the Office of Utilities Regulation (OUR) in Jamaica as the appropriate methodology as it enables the implementation of the fair allocation of cost. Countries in the Caribbean such as Jamaica and Barbados utilize net billing as it accounts for the cost of distribution and transmission. If net metering was to be applied this method would ignore the cost the utility company incurs to deliver electricity to its customers. In Jamaica for example, if Jamaica Public Service Company (JPSCo) was operating using the net metering system they would be at a loss as they would buy electricity from customers at the same price it sells it. On the other hand using net billing, they would buy electricity at a lower cost. In this sense some may disagree with the regulatory body for seemingly choosing a method that puts the customer in a disadvantageous position, however it should not be looked at as that. The main benefit to utility companies like JPSCo is the fuel displacement cost, but by using this method, a situation would be avoided where customers who can afford to
Ryan McPherson from JPS inspects a premises. Image source: http://www.myjpsco.com/ install renewable would end up with a lower rate than those who are unable to implement renewable systems in their home. In the case of Independent Power Producers of electricity in Jamaica, they purchase electricity from JPSCo at one rate (the fully embedded cost) but sells electricity to JPSCo at an agreed contract price which is based on the avoided cost. Whilst net billing is the preferred method for countries like Bahamas and Jamaica, the Dominican Republic has opted to use the net metering method. Some may argue that net billing removes the financial incentive to install solar and the rate at which consumers are credited for their excess is open to manipulation by the utility
company. However, net billing recognizes that there is a cost to delivering electricity and therefore accounts for that. Jamaica and other parts of the Caribbean should definitely maximize the opportunities of renewable energy sources, but this must be done in a systematic and cost effective manner. It is therefore important to appreciate that the supply of electricity necessitates proper coordination among all stakeholders. However the focus for lowering the cost of electricity should be on a larger scale through fuel diversification and economies of scale that will seek to reduce the volatility in fuel rates.
CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : MAY 2014
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PETROLEUM NEWS & HAPPENINGS Ultrapetrol Bahamas Lowered to Underperform at Zacks (ULTR) [...]...Read more Union supports terminated gas turbine workers [...]... Read more Finance Ministry: May Fuel Price Adjustments. [...]... Read more Ramnarine: Easing of tight gas supplies in Trinidad and Tobago might take years [...]...Read more
Caribbean Energy
Coal Could Fuel Bauxite Sector to Bright Future – Experts Say Restructuring Could Guarantee Big Export Buck [...]...Read more
Russia, Cuba sign joint deep-sea oil, gas deal [...]...Read more
Trinidad and Tobago to Train Ugandans, Nigerians in Energy Sector [...]...Read more
Why is Puerto Rico Burning Oil to Generate Electricity? [...]...Read more
Dominican Republic’s power company seeks 2.1 mln bbls of fuel oil [...]...Read more
Energy Team’s Duties to Be Revealed Soon [...]... Read more
Trinidad, BHP Billiton Talk Energy [...]...Read more
Tweak Cuban embargo for sake of safe drilling, Sen. Bob Graham says [...]...Read more U.S. displacing traditional LPG suppliers in Latin America [...]...Read more
Coal Power to the Rescue [...]...Read more CAP Lifted: Government no longer Financing LossLeading Entity [...]...Read more Butane Price falls by $13 [...]...Read more
Puerto Rico Governor Signs Law to Reform Energy Utility [...]...Read more
Fearing Layoffs, BEL Union Cries Foul [...]...Read more
Privy Council halts Bahamas dredging [...]... Read more
World Bank Willing to assist with Energy Project [...]... Read more
Russian Oil Giant to Train Cubans [...]...Read more
3 Big Challenges for Latin America’s Electricity Sector, 3 Big Strategies for a Successful Future [...]... Read more
China and Russia sign huge gas deal [...]... Read more 20 Ways to Boost Fuel Efficiency [...]...Read more US$410 million pumped YTD into Trinidad & Tobago’s forex market [...]...Read more
Petro-Caribe Funds Turning Possibilities into Realities [...]...Read more
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CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : MAY 2014
PETROLEUM NEWS & HAPPENINGS................................cont’d from page 3/ Government and UC Rusal to conclude discussions on Bauxite Plant [...]...Read more
Petrotrin aims to shrink its Carbon Footprint [...]... Read more
380-MW Project to be implemented by 2016 [...]... Read more
BP Chairman Visits Trinidad [...]...Read more
JLP Supports Coal Energy [...]...Read more
Standoff between Maya communities and US Capital Energy in the south [...]...Read more
Diversifying Jamaica’s Energy Mix [...]...Read more
CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : MAY 2014
Prices at the Pump
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MAY 2014
Retail prices for Regular Unleaded Gasoline in the thirteen Caribbean countries reviewed at the end of May 2014 showed increases in prices for three countries namely; Bahamas, Barbados and Suriname. Price increases ranged between 1.5% and 6.4%, with Barbados experiencing the highest increase. Jamaica saw a 1.6% reduction while prices in the remaining nine countries remained stable. The average retail price at the end of May 2014 was 0.97% higher when compared to the previous month. Regular Unleaded Gasoline: Average Retail Price (US$/Litre) 2014 COUNTRIES
JAN
FEB
MAR
APR
MAY
AVG
ANTIGUA/ BARBUDA
1.23
1.23
1.23
1.23
1.23
1.23
BAHAMAS [91 OCT]
1.36
1.36
1.38
1.38
1.43
1.38
BARBADOS
1.54
1.57
1.59
1.66
1.76
1.62
B.V.I [87 OCT]
1.21
1.21
1.21
1.21
1.21
1.21
DOMINICA
1.15
1.16
1.18
1.19
1.19
1.17
GRENADA (95 OCT)
1.26
1.26
1.28
1.31
1.31
1.28
GUYANA
1.09
1.10
1.12
1.12
1.12
1.11
JAMAICA 87 Octane[E10]
1.23
1.24
1.26
1.28
1.26
1.26
ST. LUCIA
1.32
1.31
1.31
1.31
1.31
1.31
ST. VINCENT/ GRENADINES
1.08
1.07
1.09
1.09
1.09
1.08
SURINAME [95 OCT]
1.39
1.39
1.43
1.43
1.46
1.42
TRINIDAD/ TOBAGO [92 OCT]
0.42
0.42
0.42
0.42
0.42
0.42
TURKS/ CAICOS
1.52
1.52
1.52
1.52
1.52
1.52
NOTE: *US Gallon = 3.785 L *Imperial Gallon = 4.546 L *As at November 1, 2009 MTBE was phased out from all gasoline blends in Jamaica and replaced with 10% Ethanol.
Comparative Retail Pump Prices Regular Unleaded Gasoline 2
MAY Avg vs 5 Mths Avg (Jan - May 2014)
1.8
US$/Litre
1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0
13 Caribbean Countries
See prices for all products at www.cippet.org
International OIL PRICES
CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : MAY 2014
Average Weekly & Monthly Crude Oil Prices (Mar May 2014)
105 104 103
US$/BBL
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103.9
103.07
103.82
102 101 100 99
Mar-14
98
Apr-14
May-14
97
Period
WK1
WK2
WK3
WK4
MTH AVG
International Crude Oil Prices ended the three month period March to May 2014 with an average price per bbl of US$101.64. The highest weekly price seen in May for the commodity was US$103.82/bbl-reflected in week four while the lowest price for the three month period was in March of US$99.55/bbl. The average price in May 2014 was 0.9% higher than the average price seen in March 2014. An average of the three month’s average prices reflected US$101.57/BBL.
FEATURED OFFERS: Caribbean Energy Information System (CEIS) primary report of historical annual petroleum energy statistics provided for 18 Caribbean Countries. Included are data on total energy production, consumption, and trade; overviews of petroleum, natural gas, electricity, as well as financial and environmental indicators for over twenty years.
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