Alternative integrated energy chain for Caribbean power markets: methanol/vegetable oil fuel blends

Abstract

The high price volatility of crude oil and its derivatives has resulted in unmanageable power generation costs in many regions worldwide. This paper proposes a unique alternative fuel blend, namely methanol and biofuels that have hitherto escaped the purview of policy-makers. Availability of fuel supply, lower environmental impact, job creation and reduction in fuel subsidy are some of the socio-economic benefits. A framework was developed for examining the economic feasibility of this alternative considering the entire energy value chain. The case study used is the power generation markets of the Caribbean. A probabilistic approach using Monte Carlo simulations was adopted to account for uncertainty in key input parameters. The results indicated that the methanol/vegetable oil chain is a feasible alternative for the Caribbean. The methanol/vegetable oil chain was also found to be more economically competitive than most other energy supply chain options.