The best of EcoWatch, right in your inbox. Sign up for our email newsletter!
4 Reasons Natural Gas Is a Bridge to Nowhere in the Caribbean
Caribbean island residents pay some of the highest retail electricity prices in the world. Most islands generate 90 - 100 percent of their electricity by burning expensive imported diesel or heavy fuel oil in large generators. Thus Caribbean electricity users pay between $0.20 and $0.50/kWh (kilowatt hour). By comparison, the average for mainland U.S. residential customers is $0.13/kWh; in Hawaii, where they burn oil for much of their electricity, the average is $0.39/kWh.
Photo credit: Shutterstock
Naturally, Caribbean islands are in the market for more affordable alternatives. Some islands are seriously pursuing renewables—witness Jamaica’s 20-MW-and-growing wind farm and the Dominican Republic installing one of the largest solar arrays in the Caribbean. Some other islands such as the U.S. Virgin Islands are experimenting with different fossil fuels that don’t require major capital investments, like propane.
But another option looms on the horizon: natural gas. A recent U.S. Energy Information Administration article and a soon-to-be-released International Development Bank study note liquefied natural gas (LNG) is increasingly being touted as a cost-effective solution for the Caribbean.
This is more than unfortunate. Switching from one imported fossil fuel (diesel/oil) to another (LNG)—the latter of which is currently slightly less expensive but much more price-volatile—overlooks the Caribbean’s abundant, domestic supply of cost-effective energy efficiency and renewable energy.
One Colombian island in the western Caribbean, San Andres, is grappling now with the future of its electricity generation, including the relative merits of LNG compared to efficiency and renewables. It becomes quickly clear that there are at least four important reasons LNG is the wrong choice for the Caribbean’s electricity.
1. Efficiency and Renewables are Cheaper than LNG and Diesel
Perhaps the most powerful argument against LNG in the Caribbean is fundamental economics. Both wind and solar undercut the prevailing levelized cost of natural-gas-based electricity in the Caribbean and elsewhere. And the Caribbean is blessed with world-class amounts of renewable resources.
For example, Caribbean wind resources are excellent, measuring an average 7.5 - 9.0 meters per second throughout the year. The wind resources of Colombia’s San Andres exceeds even that of world wind leader Denmark, where wind generated 33 percent of the country’s electricity in 2013, 54 percent for the entire month of December, and more than 100 percent for briefer times. A utility-scale wind turbine in the Caribbean can produce 50 - 100 percent more energy than it would under typical European wind conditions.
Sunshine is also bountiful in the Caribbean, with insolation similar to the sunny Southwestern United States. This again is significantly higher than places like Germany, which recently generated over half its electricity from solar photovoltaics on a single day in June this summer.
Figure 1 below illustrates San Andre’s excellent renewable energy potential, comparing its solar and wind resources to other leading renewable energy countries and U.S. states around the world.
Couple these abundant resources with dramatic, ongoing cost reductions for solar and wind, plus the expensive nature of most Caribbean islands’ diesel-powered electricity grids, and renewable electricity is simply cheaper to generate than fossil fuel-based electricity in most places throughout the Caribbean (see Figure 2).
For LNG, three increasing price estimates illustrate how sensitive gas is to market price volatility. Under high LNG prices, switching from diesel to LNG barely makes a dent. Meanwhile, switching to wind could cut the LCOE of electricity on San Andres almost in half. Also unaccounted for here are additional benefits of distributed resources, such as reduced line losses, deferred new distribution system investment, and renewables’ hedge value.
Even more compelling than renewables, however, is energy efficiency. Utilities throughout the Caribbean should make deep investments in energy efficiency first. The payoff is profound. On San Andres, most refrigerators and home air conditioning units are 40 - 60 percent less efficient than similarly priced, more-efficient units currently available on the market. By spending about $8 million up front (which equates to a very modest $0.04/kWh) to replace the island’s existing refrigerators and air conditioning units with newer, more-reliable, and more-efficient ones, the island could save more than $65 million dollars net present value on a 15-year basis. In other words, such an investment would pay back in less than two years.
2. LNG Infrastructure Isn't Cheap
At first glance, switching to LNG may seem inexpensive because islands’ existing diesel generators can be converted to run on natural gas at a “relatively” low cost. However, LNG retrofits for diesel generators can cost $4.8 million for a 14 MW diesel generator, plus there are also additional capital costs, including tanks to store LNG after delivery to the island and the need to upgrade ports to be able to accept shipments of LNG. San Andres, for example, will need an estimated 250 LNG storage tanks at a cost of $170,000 - 200,000 per tank. Each tank is about the size of a shipping container, so a significant amount of land would be required to house them—a serious challenge for an island half the land area of Manhattan.
Additionally, LNG must be transported from the port where it is received to the generators that will use it, which are not located near the island’s shore. Even on a small island like San Andres, this requires additional infrastructure for transporting LNG, either by truck after the tanks are filled or by using a new pipeline. After arriving at the power plant, LNG also needs to be re-gasified—in an additional multi-million dollar LNG plant—in order to finally generate electricity.
Finally, Caribbean islands are small; they don’t need bigger, more-efficient LNG plants that benefit from economies of scale. San Andres would thus spend a disproportionately large amount of capital to build a small LNG plant and fuel delivery system at a very high levelized cost. That LNG infrastructure is not useful in any other capacity, so if an island migrated away from LNG—such as to renewables—those tanks and pipes would sit largely unused. Investing in renewable technologies now, while also improving energy efficiency, would be a much better use of capital.
3. LNG = Energy Price Volatility
Swapping out a fossil fuel whose price escalates slowly (diesel) for a marginally lower-cost resource (liquefied natural gas) injects a new kind of risk into the electricity system: extreme price volatility. The price of natural gas itself, as well as the export price of LNG from the U.S., has varied greatly and been especially volatile in recent years. In other parts of the world, there is similar natural gas price volatility, as well as large variations in price between different regions. Given natural gas price uncertainty, it is difficult to estimate the costs of importing LNG from the U.S. or other countries over time. More volatility means less predictability in future energy prices for Caribbean island nations like San Andres, and in a region where 15 percent of total GDP is spent on electricity (in the U.S. that percentage is closer to 8 percent), such dramatic exposure to price volatility from natural-gas-fired electricity generation can be a serious hindrance on economic growth.
When talking about liquefied natural gas at small scale like we are in the Caribbean, a different kind of volatility also comes into play: capital cost uncertainty. For example, shipping costs for LNG are notoriously difficult to predict. Such costs include chartering fees, brokerage, fuel consumption, port costs, canal costs, and insurance costs, all of which vary based on where the LNG is shipped from. Along with shipping, liquefaction costs vary dramatically, as do re-gasification costs at the final location.
Each of these cost components include uncertainty, which makes estimates for LNG electricity generation for islands like San Andres extremely wide, from $10 to $30 or more per MMBTU. Given a heat rate for LNG of 7,203 BTU/kWh, the cost of LNG fuel is between $0.07 and $0.22 per kWh. While this does provide an improvement over diesel fuel, which currently costs $0.28/kWh on San Andres, this major uncertainty makes it difficult for islands to understand the true cost of switching to LNG.
Finally, LNG facilities across the globe are significantly larger than what’s needed on a Caribbean island. While there are examples of small-scale LNG in places such as Norway and Japan, these nations are moving LNG short distances within their own region, not shipping the fuel over long distances. Islands the size of San Andres would likely need only one terminal to receive LNG shipments. This may seem beneficial, but it also creates a single source of potential failure for the islands’ electricity system. Installing various distributed and varied energy resources, including renewables, mitigates this concern.
4. Small-Scale LNG Faces Serious Contractual Challenges
The LNG prices we estimated are only valid if there is a seller willing to provide LNG at that price to an island.
Currently, LNG prices are set regionally and are hugely sensitive to the volume of LNG under contract. The world’s main LNG customers, like post-Fukushima Japan, are truly massive customers and can command a lower overall LNG price: Japan alone imported 11.5 cubic billion feet per day of LNG in 2011. By comparison, San Andres would need less than one-tenth of one percent of Japan’s annual import volume. And since natural gas is a regional commodity (as opposed to a truly global one like petroleum where prices are largely uniform regardless of volume purchased), this leads to an important question: Can small islands like San Andres secure contracts for (globally) miniscule amounts of LNG at competitive prices?
Plus, under current natural gas prices, agreements can be reached before natural gas export facilities have been fully approved and constructed—resulting in an uncertain timeframe for when LNG might actually available for import to an island like San Andres.
Furthermore, if LNG is a “bridge fuel” to future alternatives, such as renewables, the amount of LNG needed over time to generate electricity would go down as more renewables come online. As renewables and energy efficiency decrease the needed amount of electricity from LNG plants, the volume of LNG purchased goes down dramatically, further increasing the per-unit price of LNG and making long-term contractual LNG even more difficult.
A Bridge to Nowhere
Given the abundant wind and solar resources available in the Caribbean, and the still-falling costs of installing renewable generation compared with converting existing diesel resources to LNG, choosing renewables over LNG now is a smart economic decision. As the case of San Andres illustrates, sinking capital into LNG would be a poor decision for most Caribbean islands facing similar challenges. There’s simply no reason to build this expensive, unnecessary natural gas bridge when the cost-saving benefits of renewables and efficiency can be captured here and now.
YOU MIGHT ALSO LIKE
EcoWatch Daily Newsletter
- UN Biodiversity Chief: Humans Risk Living in an 'Empty World' With ... ›
- World Leaders Urged to 'Act Now' to Save Biodiversity - EcoWatch ›
- Why Biodiversity Loss Hurts Humans as Much as Climate Change ... ›
A third cougar has been sighted wandering through a residential neighborhood in the Chilean capital of Santiago as millions of the city's residents are under lockdown measures in response to the coronavirus outbreak.
An area in Louisiana whose predominantly black and brown residents are hard-hit by health problems from industry overdevelopment is experiencing one of the highest death rates from coronavirus of any county in the United States.
- Plastics Plant Will Bulldoze Over Black History in 'Cancer Alley ... ›
- 'Cancer Alley' Residents Sue DuPont - EcoWatch ›
A central player in the fight against the novel coronavirus is our immune system. It protects us against the invader and can even be helpful for its therapy. But sometimes it can turn against us.
How does our immune system react to the coronavirus?<p>The coronavirus is — like any other virus — not much more than a shell around genetic material and a few proteins. To replicate, it needs a host in the form of a living cell. Once infected, this cell does what the virus commands it to do: copy information, assemble it, release it.</p><p>But this does not go unnoticed. Within a few minutes, the body's immune defense system intervenes with its innate response: Granulocytes, scavenger cells and killer cells from the blood and lymphatic system stream in to fight the virus. They are supported by numerous plasma proteins that either act as messengers or help to destroy the virus.</p><p>For many viruses and bacteria, this initial activity of the immune system is already sufficient to fight an intruder. It often happens very quickly and efficiently. We often notice only small signs that the system is working: We have a cold, a fever. </p>
Is there an immunity? How long does it last?<p>The good news is that it is very likely there is an immunity. This is suggested by the proximity to other viruses, epidemiological data and animal experiments. Researchers <a href="https://www.biorxiv.org/content/10.1101/2020.03.13.990226v1" target="_blank">infected four rhesus monkeys,</a> a species close to humans, with SARS-CoV-2. The monkeys showed symptoms of COVID-19, the disease caused by the coronavirus, developed neutralizing antibodies and recovered after a few days. When the recovered animals were reinfected with the virus, they no longer developed any symptoms: They were immune. </p><p>The bad news: It is not (yet) known how long the immunity will last. It depends on whether a patient has successfully developed neutralizing antibodies. Achim Hörauf estimates that the immunity should last at least one year. Within this year, every new contact with the virus acts as a kind of booster vaccination, which in turn might prolong the immunity.</p><p>"The virus is so new that nobody has a reasonable immune response," says the immunologist. He believes that lifelong immunity is unlikely. This "privilege" is reserved for viruses that remain in the body for a long time and give our immune system a virtually permanent opportunity to get to know it. Since the coronavirus is an RNA (and not a DNA) virus, it cannot permanently settle in the body, says Hörauf.</p><p>The Heidelberg immunologist <a href="https://www.klinikum.uni-heidelberg.de/immunologie/immunologie" target="_blank">Stefan Meuer</a> predicts that the novel coronavirus will also mutate like all viruses. He assumes that this could be the case in 10 to 15 years: "At some point, the acquired immunity will no longer be of any use to us because then another coronavirus will return, against which the protection that has now been formed will not help us because the virus has changed in such a way that the antibodies are no longer responsible. And then no vaccination will help either."</p>
How can we take advantage of the antibody response of the immune system?<p>Researchers are already collecting plasma from people who have successfully survived an infection with SARS-CoV-2 and are using it to treat a limited number of patients suffering from COVID-19. The underlying principle: <a href="https://www.dw.com/en/coronavirus-drugs-can-antibodies-from-survivors-help/a-52806428" target="_blank">passive immunization.</a> The studies carried out to date have shown positive results, but they have usually been carried out on only a few people.</p><p>At best, passive immunization is used only when the patient's own immune system has already started to work against the virus, says Achim Hörauf: "The longer you can leave the patients alone with the infection before you protect them with passive immunization, the better." Only through active immunization can one be protected in the long term. At the same time, it is difficult to recognize the right point in time.</p><p>PCR (polymerase chain reaction) tests are currently used to find out whether a person is infected with the coronavirus. With the help of PCR, it is not possible to tell whether or not there is reproducible viral RNA; it is just a proof of whether the virus is still present, dead or alive. A PCR test cannot tell us whether our immune system has already intervened, i.e. whether we have had contact with the virus in the past, have formed antibodies and are now protected. Researchers are therefore working on tests that check our blood for the presence of antibodies. They are already in use in Singapore, for example, and are nearing completion in the USA. With the help of these tests, it would finally be possible to gain an overview <a href="https://www.dw.com/en/corona-confusion-how-to-make-sense-of-the-numbers-and-terminology/a-52825433" target="_blank">of the unclear case numbers.</a> In addition, people who have developed antibodies against the virus could be used at the forefront of health care, for example. An "immunity passport" is even under discussion.</p>
Is it possible to become infected and/or ill several times with the coronavirus?<p>"According to all we know, it is not possible with the same pathogen," says Achim Hörauf. It is possible to become infected with other coronaviruses or viruses from the SARS or MERS group if their spike proteins look different. "As far as the current epidemic is concerned, it can be assumed that people who have been through COVID-19 will not become ill from it for the time being and will not transmit the virus any further," he says.</p>
How long before you're no longer contagious?<p>A study <a href="https://www.nature.com/articles/s41586-020-2196-x" target="_blank">carried out on the first coronavirus patients in Germany</a> showed that no viruses that are capable of replication can be found from day eight after the onset of symptoms, even though PCR can still detect up to 100,000 gene copies per sample. This could change the current quarantine recommendations in the future.</p><p>According to the Robert Koch Institute, patients can currently be discharged from hospital if they show two negative PCR samples from the throat within 24 hours. If they have had a severe case of the disease, they should remain in domestic isolation for another two weeks. For each discharge, whether from hospital or home isolation, they should have been symptom-free for at least 48 hours.</p>
Why do people react differently to the virus?<p>While some people get off with a mild cold, others are put on ventilators or even die of SARS-Cov-2. Especially people with <a href="https://www.dw.com/en/coronavirus-who-is-particularly-at-risk-and-why/a-52710881" target="_blank">pre-existing conditions</a> and older people seem to be worst-affected by the virus. Why? This is the hottest question at the moment.</p><p>It will still take a very, very long time to understand the mechanistic, biological basis for why some people are so much more severely affected than others, virologist Angela Rasmussen told <em>The Scientist</em>. "The virus is important, but the host response is at least as important, if not more important," her colleague Stanley Perlman told the magazine.</p><p>Stefan Meuer sees a fundamental survival principle of nature in the different equipment and activity of our immune systems: "If we were all the same, one and the same virus could wipe out the entire human species at once. Due to the genetic range, it is quite normal that some people die from a viral disease while others do not even notice it. "</p><p>Achim Hörauf also suspects immunological variants that could be genetically determined. Since interstitial pneumonia is observed with the coronavirus, the focus is probably on an overreaction of the immune system. However, it is also possible that each person affected may have been loaded with a different dose of the virus, which in turn leads to different outcomes. And finally, it makes a difference how robust the body and lungs are: Competitive athletes simply have more lung volume than long-time smokers. </p>
- 9 Ways to Boost Your Immune System - EcoWatch ›
- Vaping and Smoking May Worsen Coronavirus Symptoms - EcoWatch ›