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CARIBBEAN PETROLEUM UPDATE is a monthly Bulletin which highlights petroleum issues affecting or relevant to the Caribbean, international developments that may affect the region’s way of life and movements in oil prices and retail prices for fuel regionally.
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Caribbean Energy Information System (CEIS)
April 2012
For many Caribbean citizens just the
thought of lowering their electricity
bill is enough to bring on a broad
smile. Now imagine having the
ability to not only pay zero on your
electricity bill, but also be able to sell
excess energy back to the public elec-
tricity grid! Is this possible you may
ask? The answer to that question is
yes. The next question that comes to
mind is “How is this possible?” The
Caribbean being rich in natural re-
newable energy resources has the po-
tential to generate electricity from
natural resources such as sunlight,
wind and water. This electricity that
is generated can be used by the
generator or sold. However, the move
to do so has been slow primarily due
to the cost associated to investments
in these areas and the long-
term dependence on im-
ported fossil fuels.
In recent times, some Car-
ibbean Countries have
made bold steps in including renew-
able energy generation in their energy
mix. One such country that has made
significant strides in this area is
Jamaica. However, the question still
remains as to whether the steps taken
by these countries have reduced their
dependence on imported fossil fuels?
In this issue of the CEIS Petroleum
Update, we will look at the introduc-
tion of Net Billing with the aim of
assessing whether this arrangement
can assist with reducing the Carib-
bean’s dependence on petroleum
fuels.
What is Net Billing?
Net Billing allows consum-
ers to sell unused energy
generated from devices that harness
renewable energy to the public
electricity grid. This means that
customers who own/use renewable
energy generators such as wind
turbines and photovoltaic (solar)
systems to generate electricity for
personal use, can sell excess energy
to the Utility or National Grid at
wholesale or “avoided cost” - prices
set by a regulator or the Utility. Using
net billing, the customer will however
purchase electricity at the existing
rates, as outlined in the Utilities Tariff
Schedule and sell to the Utility at a
lower rate. This is different from Net
Metering which allows customers to
interconnect to the grid and supply
any excess electricity through a net
metering arrangement. “If the system
produces more electricity than
needed, the excess electricity will be
given to the public power supply. The
meter then spins backwards.
If the system produces less electricity
than needed, the shortage will be
CARIBBEAN PETROLEUM UPDATE is a monthly Bulletin which highlights petroleum issues affecting or relevant to the
Caribbean, international developments that may affect the region’s way of life and movements in oil prices and retail prices for fuel regionally.
To access CEIS website
CONTACT US
Caribbean Energy Information System
Scientific Research Council
Hope Gardens, Kingston 6, Jamaica
1-876-927-1779 (Telephone)
1-876-977-1840 (Fax)
www.ceis-caribenergy.org
continued on page 2/
page 2 Call: 1-876-927-1779 | Caribbean Petroleum Update : April 2012
C A R I B B E A N E N E R G Y I N F O R M A T I O N S Y S T E M ( C E I S )
taken from the public power supply .
The meter then spins forward.
At month’s end the give and take will
be balanced out, hence the electricity
bill will be reduced by the amount the
system produced.”
GRENLEC in 2008 introduced an
interconnection policy that allowed
for any excess electricity generated
from renewable energy systems up to
10kW to be sent to the national grid.
Barbados in 2010 approved and Inter-
connection Policy that allowed for
Net Billing under a 2 years pilot
project—up to 5kW for domestic RE
facility and 50kW for any other
facility.
Jamaica introduces Net Billing
The Government of Jamaica recently
announced a successful renegotiation
of some the terms of the licence of
the Jamaica Public Service Company
(JPS). This renegotiation is expected
to propel the efforts of the Jamaican
government to ensure a take-off of
the country's energy policy. These
include energy security, the develop-
ment of renewable energy sources,
increases in energy efficiency and
reinforcement of the regulatory
framework to encourage investments
in the sector.
This follows growing public outcry
for the Jamaican government to take
steps to make energy more afford-
able, in particular electricity, which is
considered the major cost/input in the
country’s manufacturing industry.
Following this outcry, Jamaica’s Of-
fice of Utilities Regulation (OUR)
and the Jamaica Public Service
Company Ltd. (JPS) developed a
Standard Offer Contract (SOC) for
the purchase of ‘as-available energy’
see - www.our.org.jm.
The OUR in the SOC has outlined the
terms, conditions and pricing regime
for small power providers to sell ex-
cess electricity generated
from renewable energy
sources to the national grid -
referred to as “Net Billing”
Under the SOC for ‘Net bill-
ing’ owners of dedicated re-
newable energy equipment
(such as wind and solar
power) are allowed to sell
excess power, generated from
their equipment, to the
Jamaica Public Service Com-
pany's (JPS) grid. This will
allow consumers to realize
significant savings on elec-
tricity bills which are charged
at US$0.40/kWh or more depending
on the type of customer and the rate
category in which they fall. Providers
however under the SOC, must obtain
a licence to sell the excess ‘as-
available energy’ from Intermittent
Renewable Energy Facilities up to
100kWh, facilitated through a five-
year licence to participate in net me-
tering, but only if generated by solar
or wind devices. Compensation for
the customers, under the SOC, is
determined via a net billing agree-
ment, whereby the customer will pay
the prevailing retail price for energy
consumed from the national grid, as
is applicable to the customer’s rate
and class, and JPS will purchase
the customer’s excess electricity at
the “short run avoided cost of genera-
tion” which could be anywhere be-
tween US$.10/kWh to US$0.25/kWh.
To date the Jamaican government has
awarded 11 licences. Below is a for-
mula showing how the payments are
calculated as taken from the SOC
developed by Jamaica’s Office of
Utilities Regulations - OUR:
SCHEDULE 3:
ENERGY PAYMENT
CALCULATION AND CHARGES
TO QE FOR THE PURCHASE
OF AS-AVAILABLE ENERGY
FROM INTERMITTENT
RENEWABLE FACILITIES OF
UP TO 100 kW.
The Energy Payment as expressed in
Jamaican dollars for each Month
commencing with the Commercial
Operations Date, shall be computed
as follows:
continued on page 3/
CAN NET BILLING REDUCE/IMPACT THE CARIBBEAN’S PETROLEUM USE?...continued from page 1/
Caribbean Petroleum Update : April 2012 | Call: 1-876-927-1779 page 3
C A R I B B E A N E N E R G Y I N F O R M A T I O N S Y S T E M ( C E I S )
1. Energy Payments
EPi = AVRi x (1 + Premium) x EOi
x IERi
EPi = Energy Payment in Jamaican
Dollars.
AVRi = Avoided Cost Rate in United
States Dollars per kWh (in effect as at
the Contract Date and which shall be
fixed for the life of the contract) -
example. US$0.10/kWh.
EOi = Energy Output (kWh) delivered
to JPS by the QF for Month i - e.g.
20kWh
IERi = The invoice exchange rate
which shall be the arithmetic mean of
the spot market weighted average of
the selling rate of exchange of author-
ized dealers in Jamaica offering to sell
US Dollars for Jamaican Dollars, as
published by the Bank of Jamaica for
the Month i calculated three (3)
Business Days before the end of the
Month i. - e.g. J$86
i = The numeric representation of a
Month - e.g. 1
2. Charges to QE
a. DPC = J$[XXX]
DPC = Direct Program Costs in
Jamaican Dollars, which is billed
monthly for the cost of meter reading,
billing and other appropriate adminis-
trative costs to be approved by the
Office of Utilities Regulation on
recommendation by JPS.
3. Net Monthly Payment to QE
NMPi = MBi - EPi + DPC
NMPi = Net amount in Jamaican
Dollars payable by or to the QE after
all payments and applicable charges
are considered
MBi = Month Electricity Billing in
Jamaican Dollars for electricity
purchased from JPS in accordance to
the applicable Rate Schedule.
Caribbean Petroleum usage and
cost in the electricity sector.
The Caribbean electricity sector con-
sumes over 40 Million barrels of oil
per annum with prices ranging
between US$80 and US$110 per bar-
rel for oil. This suggests that between
US$3.2 billion and US$4.4 billion is
spent on fuel for electricity generation
in the Caribbean annually. This cost
is incurred to generate over 51,000
GWH of electricity per annum for
eighteen Caribbean countries (CEIS
Member States). Of the electricity
generated in the Caribbean, each kilo-
watt hour that reaches the consumer is
charged at rates ranging between
US$0.20/kWh and US$0.40/kWh.
With a rough calculation, this is cost-
ing Caribbean consumers between
US$102 billion and US$204 billion
annually to pay for electricity in the
eighteen countries. In Jamaica if foe
example an avoided cost rate of
US$.10/kWh is paid to the consumer
who sells electricity under the net bill-
ing agreement to the grid, this would
amount to approximately 25% of the
tariff rate charged by the Utility
(Jamaica Public Service) for electric-
ity normally consumed/charged at a
US$0.40/kWh. With that in mind if
the approximately 575,000 Jamaican
consumers were to be paid 10kWh
this would amount to approximately
US$575,000 in savings which would
in turn offset approximately 5300
barrels of oil using the higher rate of
US$110/BBL.
This is suggesting that any savings in
the kWh cost of electricity through the
implementation of net billing agree-
ments can reduce the Caribbean’s
dependence on petroleum imports.
This type of arrangement can also be
considered an incentive to generate
using renewable energy and will
ultimately improve the energy
security of the region. If the savings
realized are used to increase the
renewable energy generation then the
benefits will be compounded. How-
ever, the realization of reduction in
imports of petroleum fuels is also
dependent on reducing the consump-
tion of electricity through energy
efficiency and conservation measures.
If consumers continue to increase
consumption then the need for in-
creased generation will propel the
need for fuel which usual results in
Utilities increasing capacity using
fossil based generators.
The conclusion therefore is that Net
Billing can aid in the reduction of im-
ports of petroleum based fuels for
Caribbean countries if other countries
were to take the step that Jamaica has
taken and do the necessary due dili-
gence.
CAN NET BILLING REDUCE/IMPACT THE CARIBBEAN’S PETROLEUM USE?...continued from page 2
page 4 Call: 1-876-927-1779 | Caribbean Petroleum Update : April 2012
C A R I B B E A N E N E R G Y I N F O R M A T I O N S Y S T E M ( C E I S )
CC A R I BA R I B PP E T R O L E U ME T R O L E U M NN E W SE W S & H& H A P P E N I N G SA P P E N I N G S
BAHAMAS
Oil could be billion-dollar business for Bahamas, says
analyst >> 30/04/2012
CUBA
Cuba positive about emerging oil industry >>
12/04/2012
JAMAICA
PM steers key talks with ALCOA Executives >>
26/04/2012
No Fire at JPS Power Plant >> 15/04/2012
JPS Continues Investigations into Power Outage >>
14/04/2012
TRINIDAD & TOBAGO
Chile, Japan Show Interest in Trinidad & Tobago’s
LNG >> 16/04/2012
Rowley: 'Massive oil find' a hoax in same vein as as-
sassination plot >> 04/04/2012
VIRGIN ISLANDS
VIWAPA Issues Two Invitations for Bid for Fuel Oil
Supply >> 30/03/2012
INTERNATIONAL
South Sudan 'agrees $8bn deal with China >>
28/04/2011
European Parliament condemns Argentina's YPF na-
tionalisation >>20/04/2012
Caribbean ill equipped for oil spills >> 17/04/2012
India and Qatar ink oil and gas pact amid Iran pres-
sure >>10/04/2012
Curacao Caribbean Lesser Antilles Bullenbaai crud-oil fuel tanks petroleum petrochemicals depot storage Source : www.fredhoogervorst.com/
The Sol Group (BVI) is a leading petroleum company.
Source: www.solpetroleum.com
Caribbean Petroleum Update : April 2012 | Call: 1-876-927-1779 page 5
C A R I B B E A N E N E R G Y I N F O R M A T I O N S Y S T E M ( C E I S )
REGULAR UNLEADED GASOLINE AVERAGE PRICES AT THE PUMP
April 2012
Retail prices for Regular Unleaded Gasoline in the sixteen Caribbean countries reviewed at the end of April 2012 showed
increased prices in eleven countries when compared to the previous month. Marginal decreases were seen in St. Kitts/Nevis
while prices remained stable in Antigua, BVI, Guyana and Trinidad & Tobago. The average retail price at the end of April
2012 for the product over the sixteen countries when compared to the average retail price seen in previous month of March
2012 was 2.5% greater.
NOTE:
*US Gallon =
3.785 L
*Imperial Gallon =
4.546 L
*As at November
1, 2009 MTBE
was phased out
from all gasoline
blends in Jamaica
and replaced with
10% Ethanol.
CHART:
See prices for other products at See prices for other products at See prices for other products at www.ceiswww.ceiswww.ceis---caribenergy.orgcaribenergy.orgcaribenergy.org ...
Regular Unleaded Gasoline Average Retail Price (US$/Litre) 2012
COUNTRIES J A N F E B M A R 4 Mths AVG APR
ANTIGUA/ BARBUDA 1.23 1.23 1.23 1.23 1.23
BAHAMAS [91 OCT] 1.33 1.35 1.44 1.40 1.46
BARBADOS 1.55 1.59 1.66 1.63 1.72
BELIZE [87 OCT] 1.41 1.45 1.51 1.48 1.54
B.V.I [87 OCT] 1.26 1.27 1.29 1.28 1.29
DOMINICA 1.12 1.14 1.19 1.18 1.25
GRENADA (95 OCT) 1.23 1.28 1.36 1.32 1.42
GUYANA 1.11 1.08 1.09 1.10 1.09
JAMAICA 87 Octane[E10] 1.23 1.30 1.32 1.31 1.37
MONTSERRAT 1.19 1.21 1.29 1.27 1.39
ST. KITTS/ NEVIS 1.20 1.19 1.32 1.25 1.29
ST. LUCIA 1.21 1.22 1.22 1.22 1.24
ST. VINCENT/ GRENADINES 1.19 1.16 1.13 1.16 1.17
SURINAME [95 OCT] 1.40 1.43 1.49 1.46 1.52
TRINIDAD/ TOBAGO [92 OCT] 0.42 0.42 0.42 0.42 0.42
TURKS/ CAICOS 1.58 1.58 1.61 1.62 1.70
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
US$/
Litre
16 Caribbean Countries
Comparative Retail Pump PricesRegular Unleaded Gasoline
APRIL Avg vs4 Mths Avg (Jan - Apr 2012)
APR
AVG
page 6 Call: 1-876-927-1779 | Caribbean Petroleum Update : April 2012
C A R I B B E A N E N E R G Y I N F O R M A T I O N S Y S T E M ( C E I S )
A review of International Crude Oil prices in the
month of April 2012 indicated that prices were above
the US$100/BBL mark for the entire month with the
highest price seen at US$103.8/BBL. The average
price seen for the month of April was US$103.2/BBL
In comparison to the two previous month, average
price for the month of April 2012 was approximately
3% lower than the average prices seen in March 2012
and approximately 2% higher than the average price
seen in February 2012. Prices in April of the previous
year when compared to April 2012 were lower.
Featured Offers:Featured Offers:Featured Offers:
Caribbean Energy Information System (CEIS)
primary report of historical annual petroleum energy
statistics provided for 18 Caribbean Countries.
Included are data on total energy production,
consumption, and trade; overviews of petroleum,
natural gas, electricity, as well as financial and
environmental indicators for over twenty years.
US$/B
BL
76.19
88.14
109.61
38
48
58
68
78
88
98
108
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Yr Avg
US$
/BBL
Period
Average Monthly World Crude Oil Prices (2009 - 2011)
2009 2010 2011
Subscriptions If you wish to subscribe (free of charge) or cancel your
subscription to the CARIBBEAN PETROLEUM UPDATE, send us an email at:
See CEIS FOR MORE: www.ceis-caribenergy.org
Join us through CIPORE on Facebook, Twitter, LinkedIn
and Subscribe to our RSS Feed!
107.2107.5
103.8
92.0
94.0
96.0
98.0
100.0
102.0
104.0
106.0
108.0
110.0
WK 1 WK 2 WK 3 WK 4 Mth Avg
US$
/BBL
Period
Average Weekly & MonthlyCrude Oil Prices
(February April 2012)
Feb-12 Mar-12 Apr-12
