University of Puerto Rico Physic & Chemistry Department Arecibo

El GasoductoFriend or Foe???
By Hirohito Torres Daz PhD PE Daz, PhD,PE Renewable Energy Program UPR-ARECIBO UPR ARECIBO Colegio de Ingenieros y Agrimensores de PR Salvador Caro 31 de mayo de 2011

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Objectives

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Who is PREPA? Va Verde EcoElctrica Plant Modification requested to FERC Expected Savings Feasible ??

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PREPA is a monopoly selling an essential service.

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Puerto Rico Electric Power Authority (A Component Unit of the Commonwealth of Puerto Rico) Audited Financial Statements Years Ended June 30 2010 and 2009 30, Ernst & Young LLP

14. Net Assets : As of June 30, 2010, the Authority is in a net deficit position. The Authority faces a number of business challenges that have been exacerbated by the Commonwealths economic recession, the volatility in oil prices, and the fact that the Authority has not increased rates to its customers at sufficient levels to offset the effects of its rising costs. Its principal challenges, some of which are interrelated, are: (i) addressing the decline in electric energy sales; (ii) addressing the volatility of oil costs; (iii) addressing high customer electric power rates; (iv) reducing government accounts receivables; and (v) improving its liquidity liquidity. The Authority is committed to take all necessary measures to ensure it achieves a healthy financial condition.

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MILLIONS OF KW-HR/Y O YEAR

15,000.0

20,000.0

25,000.0

30,000.0

10,000.0

5,000.0

Consumed Gross Generation

1960-61

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1962-63 1964-65 1966-67 1968-69 1970-71 1972-73 1974-75 1976-77 1978-79 1980-81 1982-83 1984-85 1986-87 1988-89 1990-91 1992-93 1994-95 1996-97 1998-99 2 2000-01 2 2002-03 2 2004-05 2 2006-07 2 2008-09 FISCAL YEARS

MILLIONS OF KWH GENERATION/CONSUMED IN PUERTO RICO SINCE 1960

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COST OF FOSSIL FUEL PER MM BTU

30 25 20 15 10 5 Coal Oil #6 OIL # 2

$/M BTU MM

Natural Gas

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0 Jul-98 J l 98

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Apr-01 A 01

Jan-04 J 04

Oct-06 O t 06

Jul-09 J l 09

Apr-12 A 12

Natural Gas Current Price

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Oil Price$$$/Barrel

ECOELECTRICA
ITEMS VALUE

STORAGECAPACITYLIQUEFIEDNATURAL GASINECOELECTRICA TANKTOTALGASPRODUCTION TANK TOTAL GAS PRODUCTION TANKTOTALENERGY PLANTMEGAWATTS

160,000 3.69E+09 3 69E+09

EFFICIENCYOFTHERMOELECTRICPLANT NGGASFLOW:BASEDONPOWER DEMANDANDPLANTEFFICIENCY DEMAND AND PLANT EFFICIENCY

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MWTHATCANUSETHEEXCESSOFGAS DURATIONOFTHETANKCONTENT DURATION OF THE TANK CONTENT SHIP_TRIP/YEAR

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91 0

3.69E+12 507

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CUBICMETER SCF BTU MW BTU/KWH MMSCF/DAY MW HOURS DAYS TRIPS

7,500

971 40.4 12

ITEMS STORAGECAPACITYLIQUEFIED NATURALGASINECOELECTRICA TANKTOTALGASPRODUCTION TANKTOTALENERGY PLANTMEGAWATTS EFFICIENCYOFTHERMOELECTRIC PLANT NGGASFLOW:BASEDONPOWER DEMANDANDPLANTEFFICIENCY

ECOELECTRICA 160,000 3.69E+09 3.69E+12 507 7500

FLOW FLOW REQUIREMENTFOR COSTASUR& ECOELECTRICA + MODIFICATION AGUIRREAT100%

MWTHATCANUSETHEEXCESSOF GAS DURATIONOFTHETANKCONTENT SHIP_TRIP/YEAR

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160,000 3.69E+09 3.69E+12 1,035 7500 186 528 476 19.8 25

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UNITS BTU/KWH

160,000 3.69E+09 3.69E+12 3,100 7500

CUBICMETER SCF BTU MW

91 0 971 40.4 12

MMSCF/DAY MW HOURS DAYS TRIPS

2593 159 6.6 74

COSTASURUNITS5&6CONVERTEDTONGBUTOPERATINGAT63% LIMITEDBYECOELECTRICAGASIFICATIONRATE
PLANT AGUIRRE COSTASUR (5,6) ECOELECTRI CA AES PALOSECO SANJUAN TOTAL MW 1492 820 507 454 602 840 4,715 %OFLOADING MMKWH 48% 6208 63% 100% 100% 47% 47% 4525 4441 3977 2479 3458 25,089 OILREQUIREMENT (MMBTU) N/A 48,874,493 N/A N/A $/MMBTUFOROIL 17.24 17.24

AGUIRRE COSTASUR

1492 820

48% 63% MMSCF/DAY

6208 4525

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TOTALMMSCF/DAY TOTAL MM SCF/DAY REQUIRED

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NGREQUIREMENTS (MMBTU) N/A 33,940,620 93

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TOTAL$MM TOTAL$MM TOTAL $ MM

A R
$(MM) N/A 843 843 N/A 184

$/MMBTUFORNG 5.43 5.43

184 184 0

LOAN(MM) MORTGAGE $NETSAVING

184 184 127 ($9.35) 649.19

$SAVING/KWH
%REDUCTION(23/KWH)

0.0194
8%

COSTASURUNITS5&6CONVERTEDTOTO NGOPERATINGAT100%
PLANT AGUIRRE COSTASUR(5,6) ECOELECTRICA AES PALOSECO SANJUAN TOTAL MW 1492 820 507 454 602 840 4,715 4 715 OILREQUIREMENT(MM OIL REQUIREMENT (MM BTU) %OFLOADING MMKWH 37% 4836 N/A 100% 100% 100% 37% 37% 7183 4441 3977 1925 2686 25,048 25 048 77,578,560 N/A N/A $/MMBTUFOROIL 17.24 17.24

AGUIRRE COSTASUR

1492 820

37% 100%

4836

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TOTALMMSCF/DAY TOTAL MM SCF/DAY REQUIRED MMSCF/DAY

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NGREQUIREMENTS (MMBTU) N/A 53,874,000 148 239 239 53

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$$$(MM) N/A 1,338 1,338 1 338 N/A 292

TOTAL$MM TOTAL $ MM

$/MMBTUFORNG N/A

TOTAL$MM292 TOTAL $ MM292 LOAN(MM) MORTGAGE $ $NETSAVING $SAVING/KWH %REDUCTION(23 /KWH) 127 ($9.35) 1,036 , 0.0310 13%

COSTASUR&AGUIRRECONVERTEDTOTO NGOPERATINGAT57%
PLANT AGUIRRE COSTASUR COSTA SUR ECOELECTRICA AES PALOSECO SANJUAN TOTAL MW %OFLOADING MMKWH OILREQUIREMENT(MM BTU) $/MMBTUFOROIL

1492 1090 090 507 454 602 840 4,985

57% 5 % 57% 100% 100% 30% 30%

7450 5 3 5443 4441 3977 1582 2208 25,100

76,361,008 58, 9,950 58,779,950 N/A N/A

AGUIRRE COSTASUR

1492 1090

57% 57%

7450

5443
MM SCF/DAY

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NGREQUIREMENTS (MMBTU) 55,873,908 55,873,908 40,819,410 265 356 170

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$$$(MM)

1,317 1,013 ,0 3

TOTAL$MM $

2,330

$/MMBTUFORNG 303 303 221

TOTALMMSCF/DAY REQUIRED

TOTAL$MM LOAN(MM) MORTGAGE/YEAR $NETSAVING/YEAR $SAVING/KWH %REDUCTION(23/KWH)

525 1000 ($73.62) 1,732 0.0517 22%

COSTASUR&AGUIRRECONVERTEDTOTO NGOPERATINGAT57% LOADING:PALOSECO &SANJUANARESHUTDOWN

PLANT
AGUIRRE COSTASUR ECOELECTRICA AES PALOSECO SANJUAN TOTAL

MW 1492 1090 507 454 602 840 4,985

%OFLOADING MMKWH 74% 74% 100% 100% 0% 0% 9672 7018 4441 3977 0 0 25,108

OILREQUIREMENT (MMBTU) 99,135,343 75,795,199 N/A N/A

$/MMBTUFOROIL 17.24

AGUIRRE COSTASUR

1492 1090

74% 74%

9672 7018

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REQUIREDMMSCF/DAY

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NGREQUIREMENTS (MMBTU)

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TOTAL$MM

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$$$(MM) 1,709 1,307 3,016

$/MMBTUFORNG

72,538,056 52,635,555

5.43 5.43

394 286

TOTALMMSCF/DAY

434 248 LOAN(MM) MORTGAGE/YEAR

TOTAL$MM679

1000 ($73.62) ($73 62) 2,263.35 0.0676 29%

$NETSAVING/YEAR $SAVING/KWH %REDUCTION(23/KWH)

CONCLUSIONS

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PREPA PROMISED A REDUCTION IN ELECTRICITY FOR DEC 2010(OUT OF PHASE WITH CONSTRUCTION PLAN) ECOELECTRICA CURRENTLY DELIVERS UP TO 93 MM SCF/DAY OF NG FOR INTERNAL USE ECOELECTRICA WORKING IN AN EXPANSION PROJECT FOR THE INSTALLATION OF TWO GASIFIERS . HENCE, NG WILL BE INCREASE TO 186 MM SCF/DAY (END OF 2011??) WITH THE GASIFIERS IN PLACE, REDUCTION IN ELECTRICITY BY 8 % POSSIBLE IF OPERATING THE CONVERTED COSTA SUR 5 6 UNITS TO 5,6 NG AT 57 % LOADING THE TOTAL KWH GENERATED IN PR WAS SET TO A MAX OF 25,000 MM KWH/YEAR BY LOCAL DEMAND. TOTAL PR GENERATION SYSTEM IS ABOUT 50 % OVERSIZED NEED TO LOOK FOR CLIENTS (DOMINICAN OVERSIZED. REPUBLIC ? VIRGIN ISLANDS..???) REDUCTION IN ELECTRICITY COST OF NEAR 30 % POSSIBLEHOWEVER, THERMOELECTRIC PLANTS NOT IN NG MUST BE OPERATED AT A VERY SMALL LOADING SHUTDOWN ? LOADING.SHUTDOWN

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