Aug. 13, 2006 – An energy assessment of the Insular Areas recently released by the Interior Department calls upon the V.I. Water and Power Authority to investigate cogeneration agreements, and to consider alternative energy, net metering, cooperative programs with the V.I. Energy Office and public information campaigns to reduce consumption as means for coping with the growing energy crisis.
The 452-page U.S.A. Insular Areas Energy Assessment Report also called upon the V.I. government to get into compliance with existing laws requiring its operations to meet certain efficiency standards, stating: "Government buildings have energy efficiency standards, though they are not rigidly enforced." In general, the report says, the cost of enforcement is far less than the benefits reaped.
The report, a requirement of the Energy Policy Act of 2005, says that the Insular Areas have no indigenous fossil fuels and that "their near-complete reliance on a single, increasingly expensive energy source has created fiscal burdens that have hampered economic development."
This is the first energy assessment done since 1982.
The Virgin Islands total dependence on oil for power generation has seen household power bills skyrocket in recent years – doubling or tripling costs.
The report suggests a power purchase agreement might be made with Hovensa, one of the largest oil refineries in the western hemisphere. Hovensa is not connected at this point to WAPA; Hovensa generates its own power. "Refineries often have extra generating capability and seek opportunities to sell the excess energy to the local utility," the report says, but adds that Hovensa doesn't generate a lot of extra power. The plan is also hampered by an agreement between the refinery and the V.I. government that Hovensa will not sell electrical power to any outside entities.
However, Alberto Bruno-Vega, WAPA executive director, said on Friday that a cogeneration plan with Hovensa was something that could be developed. He said the authority was "making initial steps in that direction." The first step would be to find out if there was any interest in such a plan on Hovensa's side before spending money on a feasibility study.
The other Hovensa partnership possibility that has floated around for awhile is using a by-product of the refinery – petroleum coke – to fuel WAPA generators.
Bruno-Vega said "millions" could be saved using pet coke as fuel. But the authority would have to purchase a pet coke boiler, and the emissions contribute to green house gases. Bruno-Vega said that elsewhere limestone is mixed with the pet coke to mitigate the pollution, but that creates a by-product that would be difficult to dispense with in the Virgin Islands. On the mainland he said the byproduct is used as a foundation for roadways.
Biogas from landfills could be an "economically reasonable energy source for power generation on St. Thomas and St. Croix," the report said and recommended its use be developed. This was also an option reviewed by a V.I. Waste Management Authority citizens advisory committee and is something that May Adams Cornwall, WMA executive director, has expressed interest in.
One of Bruno-Vega's pet renewable energy sources – ocean thermal – was touched on in the report, but as no commercially viable technology yet exists it was not recommended.
"Ocean conditions and ocean floor slopes are favorable for ocean thermal energy technologies (OTEC). However, power generation using ocean thermal energy is not yet technically or commercially proven at the multi-megawatt levels that would make economic sense," the report said, adding that the technology wasn't expected to be developed anytime soon.
Bruno Vega said the U.S. government should make the first move to develop the technology and then let the private sector take over and develop it in the Caribbean basin.
Wind generation is still an option and one recommended by the report. A deal for a wind farm on St. Croix fell apart a few months ago when the authority and the contractors could not agree on how potential hurricane damage to equipment would be handled. Bruno-Vega said wind as an alternative energy source is still something the authority is interested in investigating.
Once the issues of hurricane force winds are addressed by possible use of tilt-down or fixed machines engineered to survive full force hurricane winds and flying debris, and then if the economics make sense, the report recommends WAPA prepare a proposal for funding a wind generation project.
Demand side recommendations
Most of the power used in the Virgin Islands is electric and is used for lighting, refrigeration (including air conditioning), and water heating.
The report recommends several measures to convert residents to the use of solar hot water heaters. It calls upon WAPA to purchase the solar heaters in bulk and either rent them or establish lease-purchase agreements with its customers to buy them.
"Since inefficient tank-type electric water heating is often used in homes, an exchange of electric water heaters for solar may be in the best interest of WAPA as a hedge against increased investment in capacity and for fuel savings," the report says.
Currently legislation is being developed by Sen. Louis P. Hill that would establish solar hot water requirements for new construction in the territory.
"The Energy Office has installed or supported the installation of many different types of solar water heaters," the report says. Energy Office spokesman Don Buchanan said Saturday that increased use of solar water heaters was a "no-brainer." He said Barbados is 60 percent converted.
The units pay for themselves in reduced energy bills in three years or so, Buchanan said, noting that "the report had a lot of good ideas."
One area in particular that addresses energy efficient appliances notes that when appliances that are shipped into the Virgin Islands, the annual savings on the front of the appliance should be multiplied by four times. "It is recommended to use an overlay label or other method of informing consumers that the cost estimation on the label is about one-fourth the actual cost in the USVI." With a $.31 to $.34 cent per kilowatt hour cost, the Virgin Islands is the highest in the Insular Areas, the report said; therefore savings realized by use of energy efficient appliances is far greater than in other places.
The report spends considerable time on the use of solar photovoltaics on the demand side. It says the wide scale use of solar for WAPA's generation purposes would not be practical, but private use could be. With the astronomical rise in the cost of fuel, the use of off-grid solar systems begins to look more appealing and "competitive." With that, the report says, comes the need for WAPA to "adopt a true net metering (energy going into the grid is the same price as energy from the grid) for private, household PV installations of 10 kWp and smaller." It goes on to say that "without net metering, private investment in solar at the household level is much less cost effective since most of the solar energy is produced in the middle of the day when household use is typically low."
But Bruno-Vega, who has never favored net metering, still insists that it would not be fair to lower income rate payers who cannot afford the cost to install off-grid solar systems.
WAPA believes, the report says, "it is unreasonable that hundreds of households could effectively get the same price for selling power to the grid as the utility gets from its customers but without any investment in the grid or its maintenance."
However, the report says it is unlikely that the home user will actually be selling power to the authority. It says the household will ultimately use whatever it produces, so "the end effect is energy conservation for the house, not a mini-IPP [independent power producer] selling p
ower to the WAPA."
The report does recommend that WAPA install some photovoltaics at the plants to become accustomed to how the solar systems function.
Whatever the authority decides to do in terms of purchasing or developing other energy sources will take at least three years, Bruno-Vega said in a phone interview Friday.
The report was generally positive about WAPA's functioning given its current equipment and praised the Energy Office for its various efforts. But it was clear that the islands stand to lose ground if we don't quickly and efficiently address our dependence on increasingly expensive oil.
"Most electric utilities are being seriously impacted financially," the report says. "Bond ratings are being downgraded and financial reserves are being depleted. Comments from some officials expressed that some islands, especially the smaller islands, may in a matter of three or four years lose all of the economic progress that the islands have worked so hard to build for the past 20 years if island incomes or some source of revenue isn't able to keep up with the substantial increase in energy costs."
To access and read the entire document, click here.
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