Page 40 - CARILEC CE Journal Nov 21

Because of that, again, that affects the overall MS: I want to address a question that came from
production costs. From the utility perspective and the audience. It relates to effectively the utilities
when viewed with renewables in the system, you’ll falling back on the fact that they can pass through
see the true impact of renewables on the customer. fuel costs. I am absolutely an advocate of changing
Having said that, what we propose to our clients is that. I think that’s the job of where regulators, utilities
that: one, we believe in renewables and we say it and and stakeholders can get together and develop much
we’re doing it. But please take a holistic approach better formulas and much better methods of figuring
to it. Look at how injecting a certain percentage out how we integrate that thermal generation in the
of renewables in your system affects the overall renewable space and not effectively say, the utilities
operation and the overall operating costs of your have carte blanche just to fall back on thermal
system. If you do that, the technology of choice will generation and pass the cost on to the customer.
become evident. You will notice that gone are the
days where you are installing technologies that are I don’t believe that the old-style regulation where
inflexible. It will become evident that you want to fuel costs automatically go through, whatever it is
look at thermal technology that’s flexible. There’s no just gets passed on to the customer. That seriously
impact with frequent starts and stops. The machine needs to change.
is able to ramp up fast and ramp down very quickly CB: Final question: when we look to the future,
to follow the intermittency of renewables. This all three of you have highlighted the need for
addresses technology and planning.
flexibility, holistic planning, and looking at
systems in a different way. You’ve all directly—
CB: Filipe, could you shed some light on where or indirectly—alluded to the importance of
you’re seeing high demand for conversions to stakeholder engagement. When we look to a more
LNG?
holistically flexible future, what role do you want
to play, how would you like to shape the market,
FP: Everywhere, globally. In the region we’re and how do you think you could best engage
focused on, any island country, Central America,
South America, places dependent on mostly stakeholders to achieve this more flexible, holistic
Venezuela-based heavy fuel oils and diesel. system?
If you think about it, all these countries have FP: First of all, it’s about education. All the market
been stranded for years, depending on diesel or players have a job to educate those who need
other fuel oils. Even if we were to take aside the to make decisions in the next few years. We have
environment, which we cannot, just costs alone, observed that while people have great goals and
it doesn’t make any sense. Given the opportunity, even if we don’t agree on the goals, or how aggressive
every country in the region is looking to conversion those goals are, the goals are good goals. People
as a first step from their current fuel to LNG. Not are driven by something positive. For the most part,
long ago we were talking internally, looking at the many people making decisions are not educated
map of the Caribbean, Central America, North enough on, or don’t fully understand the supply
and South America, and the countries that have chain, the value chain behind those decisions.
converted and the ones looking to convert. If you
look at it, several countries have already converted.
There are RFPs ongoing in the region, and then As Murray said, it’s going to fall a lot more on the
several RFPs ran in the region that went nowhere. regulator than it will on the government to decide.
One of the conclusions we reached was that those MS: I think the key here is to get all stakeholders
countries that make a decision because they run to fully understand what it takes to provide a 24-7
their models and believe in what they’re doing electricity supply at the lowest possible cost on an
and get a deal to convert, they get it done. Then island situation where you’re not interconnected
you see all these RFPs go on for 3, 4, 5, 7 years with another large utility that you can rely on as
and go nowhere. To answer your question, I think backup. In my experience over the years that is one
everyone who is running on LNG today is looking area that I think is always underestimated as to what
to run on LNG. Or, they have more ambitious goals the utilities face in doing their job by multilaterals,
for renewables so the timing impacts. consultants, by government, by regulators. They

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