June 2014

JMA President Brian Pengelley. – Rudolph Brown/Photographer

Brian Pengelley was on Wednesday re-elected as president of the Jamaica Manufacturers’ Association (JMA) for a fourth and final term, that will remain focused on unresolved issues that dominated debate last year.

On his list: the high cost of energy, the depreciation of the dollar, the impact of crime on the business environment, and tax policy.

“With the cost of energy at 42 US cents per kilowatt hour, we expect that the process of getting the construction of the 381MW plant back on track will be handled as a matter of urgency,” said Pengelley in his acceptance speech.

He said the JMA would assist Jamaica Public Service Company (JPS) in naming any local company that steals electricity, saying “This pilferage of electricity not only hinders Jamaica’s development but puts a strain on our already scarce foreign-exchange reserves.”

JPS estimates that it loses about 17 per cent of electricity supplies to theft; that the stealing of electricity cost the power company about $11 billion last year; and that eradicating theft could cut electricity costs to consumers by up to 15 per cent.

The utility has said that the problem spans residential and business customers, with the latter said to employ more sophisticated bypass mechanisms.

Regarding the value of the Jamaican dollar, Pengelley said while the association notes the benefits of the International Monetary Fund programme in the rebounding competitiveness of local products, continued depreciation will ultimately hurt competitiveness locally and intentionally, since most local manufacturers must import their raw material.

The JMD is now nudging $112 to the USD, but is expected to fall even further to around $120 this year.

“It disrupts the ability of manufacturers to cope and makes it difficult for the majority of the workforce to satisfy basic needs,” the JMA president said.

Others elected alongside Pengelley were deputy president Metry Seaga of Jamaica Fibreglass Products Limited; treasurer Jason Dear of No Brand Chemicals; and eight directors – Mark Chin of AMG Packaging; Howard Mitchell of Corrpak Jamaica; Dennis Valdez of Newport-Fersan; Radcliffe Murray of Caribbean Producers Jamaica; Stafford Hyde of Architectural Windows and Doors Limited; Michelle Smith of Chocolate Dreams; Raymond Miles of Sun Island and Kathryn Silvera of Caribbean Foods.

tameka.gordon@gleanerjm.com

Yesterday, the Jamaica Public Service Company (JPS) signed an agreement to purchase wind energy from BMR Jamaica Wind Limited over a period of 20 years.

Under the terms of the agreement, the JPS also has the option to purchase 20 per cent interest in the project.

BMR Jamaica Wind is investing US$90 million in the project and the JPS says it has supported the venture by providing technical advice and vital wind data, from its own Munro Wind Farm.

According to the JPS, the project is a significant milestone in Jamaica’s energy security and diversification programme, and represents another important step toward reducing the cost of electricity.

Construction of the 34 megawatt wind farm will see 11 turbines being erected near Malvern, St Elizabeth, in proximity to the JPS Munro Wind Farm.

The JPS says the new wind farm is expected to save Jamaica 250,000 to 300,000 barrels of imported oil each year, or up to six million barrels of oil over the 20-year term of the agreement.

The project is also expected to create 90 to 120 new jobs during the construction, phase which begins in August 2014.

Commissioning is scheduled for September next year.

Jamaica Gleaner

With reference to your headline article, ‘Solar power risk’ in The Gleaner Tuesday, June 3, I think that our policy decisions in relation to electricity should be based on long-term considerations, such as the amount of foreign exchange spent on fossil fuels, and the threat of global warming, rather than on return on investments.

My initial observation is that we have failed to capitalise on the opportunities provided by solar energy. Neither Jamaica Public Service (JPS) nor the Office of Utilities Regulation has educated the public on the win-win situation, which is possible with net-billing. More people might be interested in applying for net-billing if the application process were quicker, and the steps involved, detailed instructions for which are given on JPS website, were less onerous. Most people are unaware that you do not need batteries to run a solar system if you have a grid-tie with JPS. In fact, going that route is more environmentally friendly and less expensive, as shown by the calculation below.

BUYING BATTERIES

On the whole, companies selling solar systems encourage purchasers to buy batteries. Their pitch is that you can cut your electricity bills and even get off the grid entirely. They also tell you that JPS pays you only half of what you pay JPS per kWh, which is true, but they don’t tell you that batteries would cost more. Also, most people use more electricity in the summer than in the winter. To get off the grid entirely, one would have to install sufficient panels to supply one’s summer needs, and then one would have excess in the winter. It would be better to be able to send the excess to the grid in the winter and draw from JPS if necessary in the summer.

My calculation is based on a monthly average of 200 kWh being sent to JPS in the day, and drawn from JPS at night. (It does not include the excess amounts being sent or drawn). Nor does it take into account escalating costs. I make the optimistic assumption that a battery bank will last for 10 years.

WITHOUT SOLAR PANELS

200 kWh x J$40 = $8,000 monthly x 12 = $96,000 annually x10 years = $960,000.00

With solar panels and net billing (cost corresponding to half of $40.00)

200 kWh x $20 = $4,000 monthly x 12 = 48,000 annually x 10 years = $480,000.00

Savings: $480,000.00

With batteries, no net-billing, cost would be $0, but cost of 16 batteries at $40,000.00 each with life expectancy 10 years max = $640,000.

In contrast, as Mr John Kistle states, JPS would be faced with the challenge of providing everybody with electricity at peak hours after sunset, or on overcast days. Some of that generating capacity would have to be turned off at peak sunshine hours, thus reducing the return on whatever investment was made in a new power plant. However, solar power would cut down on the amount of fuel needed to run the plant.

Given the importance of the cost of electricity to all of us in Jamaica, perhaps there are some other things we can do. Could there be a consensus, for example, on turning off our fridges during peak hours? Or JPS charging different rates at peak hours?

I think that all stakeholders need to be involved in making these hard decisions.

Jamaica Gleaner;