Tag: Government

JAMAICA HAS ratified the historic international climate change deal, dubbed the Paris Agreement, which was reached in France in 2015, following years of wrangling among countries over what its provisions should be.

This, as the world looks to combat the changing climate that threatens, through sea level rise, extreme weather events, increasing temperatures and associated impacts, to erode economies and jeopardise lives.

“The instrument was signed by the minister of foreign affairs (Kamina Johnson Smith) on the 30th of March and the document sent off to New York for deposit at the United Nations,” UnaMay Gordon, principal director of the Climate Change Division of the Ministry of Economic Growth and Job Creation, told The Gleaner Tuesday.

“It was deposited on the 10th of April. Therefore, for Jamaica, the agreement will enter into force on the 10th of May, 2017,” she added.

Jamaica’s ratification comes close to a year after its participation at the high-level signature ceremony in New York on Earth Day, April 22, 2016.

The agreement, meanwhile, aims to “strengthen the global response to the threat of climate change, in the context of sustainable development and efforts to eradicate poverty” through a number of actions.

Included among them is “holding the increase in the global average temperature to well below two degrees Celsius above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 degrees Celsius above pre-industrial levels, recognising that this would significantly reduce the risks and impacts of climate change”.

The island joins other CARICOM members with the exception of Haiti and Trinidad and Tobago who have ratified the agreement.

In responding to the perceived delay in Jamaica’s ratification, Gordon said the island had a process that needed to be gone through.

PROCEDURAL MATTERS

“Once the instrument was signed (in New York last year), then we started that process. Jamaica, unlike some other countries, had a process of consultation with the stakeholders to ensure that people understood what we were doing,” she said.

“The document went to the AG (attorney general) for the opinion of the AG. We received the opinion of the AG in October 2016. In the opinion, the AG had given an undertaking that there were only some procedural matters and that Jamaica could proceed to ratify the agreement,” she added.

“But we thought as a division that we should do the consultations. So we had focus groups, individual sit-downs and so on with stakeholders from finance, forestry, energy, etc, to find out if they were in agreement with the AG’s opinion to go ahead, and all of them had no objection,” Gordon said further.

No objections were received up to February this year and a Cabinet submission made.

“Cabinet gave the approval to ratify,” Gordon said. “We are now a full party to the agreement and have to implement at the national level.”

Gleaner

A JPS workman installs power lines in the Springfield housing development in Clarendon on August 17, 2016. The Jamaican Government plans to divest its near 20 per cent holdings in the power utility.
Opposition spokesman on mining and energy, Phillip Paulwell, says if the Government divests its nearly 20 per cent stake in Jamaica Public Service Company (JPS) at this time, the asset would fetch the least possible value.

However, Dennis Chung, the chief executive officer of the Private Sector Organisation of Jamaica (PSOJ), says if Government wants to divest its shares in JPS it might make sense, noting the valuation of the shares would be based on future prospects of the business.

Governor General Sir Patrick Allen, delivering the Throne Speech in Parliament on February 9, said the Government will this year begin the process of privatising its minority shareholding in JPS.

“The Government will take steps to ensure that there is broad retail and institutional participation and Jamaican owners in the divestment process,” he said, adding that an enterprise team will be appointed to lead it.

JPS is primarily owned by Marubeni of Japan and Korea East West Power Company, each of which holds 40 per cent interest.

Paulwell said the Government’s expressed plan to offload its shares in the power utility “doesn’t mean it’s going to happen as we have seen from last year’s Throne Speech”.

Notwithstanding that, “I am opposed to the divestment of the shares at this time because we would get the least possible value on those assets in JPS, largely because everybody is aware that 290 megawatt of JPSCo capacity will become scrap metal in a matter of time when the new 190MW plant is established.”

The 190MW plant to which he referred is the proposed gas-fired power station at Old Harbour Bay, St Catherine, on which construction is slated to start in early March.

“For me, the Government should participate in the new 190 (megawatt) plant which will preserve and enhance its value, and after that plant has been established, that’s the time you can think about selling the shares,” Paulwell told the Financial Gleaner.

$2-billion debt

“If you were to sell the shares now, we would end up not getting much because we owe JPSCo so much money now; so nothing will go to the government’s coffers, because any money we make from the sale will have to go and clear our debt with JPS,” he said.

He noted that the Government currently owes the JPS more than $2 billion in bills, including for street lighting.

“So if it were to sell the shares now it will be at a depressed value. The net effect would not mean anything coming into Government’s coffers,” said the energy spokesman.

What the Government needs to do is to participate fully in construction of the 190-megawatt plant, Paulwell said. “It will cost them about US$20 million in equity,” he said, noting that for that plant, the JPS has a 20-year power purchase agreement which guarantees that project a significant rate of return on the investment for 20 years.

“That is one of the safest investments you could make. Why would the Government not be a part of that? And at that time it could contemplate on how to dispose of its shares,” said Paulwell.

“And, in any event, if it’s going to do that, the Jamaican people must be the people to whom those shares are sold,” he said.

Chung indicated that in making the decision to divest its shares in JPS, the Government must know what is happening.

He said he did not see it as a big deal to divest the shares and make Jamaicans a part of the ownership.

Referring to Paulwell’s opposition to the sale at this time, Chung noted that valuation of the shares would be done based on what is expected in terms of business.

“If you know, for example, that you have a contract to sell twice what you sold this year, then you can build that knowledge into the valuation,” he said, adding that the valuation would also be based on future prospects.

He noted that shares are traded at a price-earnings ratio and sometimes can be valued at many times more than the book value of an entity.

“So it’s based on information that people have,” he said, adding that if investors believe they are going to make a killing “out of this thing, going forward, then you value the shares accordingly”.

Gleaner

The Governor General said the Government will seek to ensure that Jamaicans have ownership in the island’s sole electricity generation and distribution company, Jamaica Public Service Company (JPS)

Sir Patrick disclosed this morning that the Administration will this year sell its remaining stake in JPS.

The Government owns 19.9 per cent of the light and power company.

The Governor General said an enterprise team is to be set up to lead the divestment.

The opposition has objected to the Government’s divestment of its JPS shares.

Opposition Spokesman on Energy, Phillip Paulwell, has described the move as ill-advised and untimely.

Paulwell argued that the sale would deprive the company of the opportunity to maximise the expected increase in its assets.

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Special Climate Change Adaptation Fund administrators from the Environmental Foundation of Jamaica and beneficiaries show off the cheque representing the most recent awards at the signing ceremony last Monday.

WITH A changing climate that threatens to wash away entire communities and derail livelihoods, local civil society organisations and small businesses are being empowered to respond – with capital.

This is thanks to financing made available through the Pilot Programme for Climate Resilience (PPCR).

There exist two financing mechanisms, according to Dr Winsome Townsend, project manager for the Adaptation Programme and Financing Mechanism under the PPCR.

One is the Special Climate Change Fund (SCCAF) that is being administered by the Environmental Foundation of Jamaica.

The SCCAF, according to project documents, is “to finance adaptation and disaster risk-reduction projects and cover associated programme management costs”.

“Grants from this trust fund will be accessed by community-based organisations, other civil-society groups and selected public-sector agencies, for clearly defined high-priority activities, particularly related to building the resilience of the natural environment and contributing to livelihoods protection and poverty reduction,” the documents revealed.

Last Monday, the first 18 beneficiary organisations were awarded sums to the tune of $84.9 million to undertake projects designed to enhance resilience at the community level.

“There was a call for proposals in October last year and out of that, about 80 proposals were received and about half that amount were shortlisted. They were further assessed and out of that, an initial 18 were approved,” said Townsend.

“Twelve were pending approval. Those 12 have now been approved. So out of that first call, approximately 30 have been approved,” she added.

PROJECTS TO BE PURSUED

Projects to be pursued include water harvesting and greenhouses, aquaponics systems and food processing, as well as various ecosystem restoration initiatives.

Townsend said another call will be issued later this month or early March.

The second mechanism is a line of credit, intended “to provide loan financing to support adaptation measures of farmers and other businesses in the agricultural sector, and small hoteliers and other businesses in the tourism sector”.

Five projects have been approved to the tune of some $25 million, Townsend said. However, the overall level of interest in the line of credit – administered by JN Small Business Loan – is not immediately clear.

“Because it has started soft, we don’t know yet. We can’t at this time make any determination as to the level of enthusiasm,” Townsend said.

Still, she is hopeful for its success, given what is at stake.

“It is not just the Government who needs to put in measures in terms of climate change adaptation, but everybody, including citizens. Of particular interest is the private sector because businesses are under threat from climate change, and so the private sector needs to respond to these threats,” she said.

“The micro, small and medium-size businesses are at greater risk because of their capacity to respond. They are not as resilient as the more established or bigger enterprises,” Townsend noted.

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The push to get 30 per cent of Jamaica’s electricity from renewable sources by 2030 is not a pipe dream and will be achieved, Government Senator Matthew Samuda has insisted.

The senator said that energy generated currently from renewable sources is 10.5 per cent of net electricity generation.

Speaking last week in the State of the Nation Debate in the Senate, Samuda noted that energy minister Dr Andrew Wheatley, upon taking over the portfolio last year, increased the 2030 target in the national energy policy to 30 per cent from 20 per cent.

GDP Growth

According to Samuda, the target “certainly complements the top line objective of 5 in 4″, referring to the Government’s objective of achieving a GDP growth of five per cent by the end of the 2020-2021 fiscal year.

“This (energy target) is not a pipe dream, nor is this lip service being paid to the nation’s energy supply. I am happy to state here today in this chamber that Jamaica will target a further 100 megawatt (MW) of renewable energy for the grid, with a new invitation for proposals to be made public in the very, very near future.”

Added Samuda: “This project will have a transformative effect on the sector, and indeed, the country. These projects will, no doubt, strengthen a pillar for competitiveness and development, which is cheap, reliable, and clean energy.”

Last year, an additional 80MW of generating capacity from renewable sources was connected to the national grid, Samuda noted.

Gleaner

Opposition spokesman on Mining and Energy, Phillip Paulwell, is describing as ill-advised and untimely the latest proposal by the Government to divest its 19.9 per cent stake in the Jamaica Public Service Company Ltd (JPS).

Paulwell, who said that Finance and Public Service Minister Audley Shaw recently alluded to the divestment of the Government’s shares at this time, argued that the transaction would deprive the country of the opportunity to maximise the expected increase in the value of the energy company’s assets when the energy diversification and modernisation exercise is completed.

“While we recognise and appreciate the fact that the divestment would serve to broaden the ownership base of assets in the country, we urge the Government not to squander the country’s assets on the whim of expediency, but to be guided by the cost-benefit analysis of the divestment,” Paulwell insisted.

Despite the Opposition’s reservations to divest the JPS shares at this time, Paulwell recommended that every effort should be made to ensure that Jamaicans are given the opportunity to acquire the publicly held shares in the company.

The previous People’s National Party administration had taken a policy decision to divest itself of commercial assets once the opportunities arise.

In 2016, the Development Bank of Jamaica had advised that the Government was committed to selling its stake in the JPS, the island’s sole power distributor.

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The Jamaica Public Service Company (JPS) is preparing for a battle with the Government over any attempt to review its operating licence.

The JPS was put on its guard last Friday when Government senator and chief technical adviser to the finance minister, Aubyn Hill, declared that the Andrew Holness-led administration is obliged to review the licence of the light and power company because of threats to the Jamaican economy.

Opening the State of the Nation Debate in the Senate, Hill called for a review of the modified licence issued to JPS last January, because it “seems to be quite opposed to the interest of Jamaicans”.

“We have to look at that licence carefully [and] as a new Government, we’re obliged to,” Hill told his parliamentary colleagues.

But Kelly Tomblin, the president and chief executive officer of the JPS, in a quick response, rejected Hill’s reasons for questioning the changes to the licence and expressed the hope that his comments would not suggest that Holness will shred the contract.

“I’m sure, similar to how the Government has continued on the framework for fuel diversity, that this Government certainly wouldn’t suggest that a licence negotiated in good faith, in which the JPS has made investments, would be negated by a subsequent government,” said Tomblin.

“Surely, he’s (Hill) not suggesting that,” added Tomblin.

In his Senate presentation, Hill argued that he was making the call from his position as a senator.

“Because I may have some influence on policy, I do not lose my right as a senator to bring up independent issues. My position is quite different from a recommendation, and if I gave a recommendation I probably would not be speaking on it publicly,” said Hill.

The international banker argued that the replacement of the price cap regime with the revenue cap in the licence “could dampen economic growth” because JPS’s growth is no longer tied to that of the economy.

“A good argument can be made that the revenue cap approach blunts any incentive on JPS’s part to support the expansion of renewable sources of energy or to improve efficiencies in their current business,” said Hill, who is the chairman of Innovative Renewable Energy & Electronics Limited.

He said giving the JPS the right of first refusal to replace generating plants due for retirement entrenches the company’s near-monopoly and is inconsistent with international standards and Jamaica’s national energy policy.

‘Inaccurate Conclusions’

Tomblin rejected those claims, arguing that Hill was making “inaccurate conclusions”.

“We negotiated with the Government for our licence amendments that we believe serve the country. We have about 31 guaranteed standards that are monitored by the Office of Utilities Regulation (OUR).

“Our overriding goal is to support economic growth. This (Hill’s arguments) requires a more fulsome discussion with the utility,” said Tomblin.

Hill’s call came days after the OUR announced new regulation which should give it more power to monitor the operations of the JPS and other entities which generate or supply electricity.

The regulation will govern the operational standards and established procedures for handling the generation, transmission, distribution, supply and dispatch of electricity across the island.

According to the OUR, the regulation adopts five grid codes, which are generation, transmission, distribution, supply, and dispatch.

“The codes, which were finalised in August 2016, have been developed in parallel, and are designed to be used in conjunction with each other,” said the OUR.

Energy minister Dr Andrew Wheatley (left) and Petroleum Coprporation of Jamaica general manager Winston Watson.

The Petroleum Corporation of Jamaica (PCJ) will be carrying out major energy efficiency and renewable energy projects at six public hospitals to reduce electricity costs under the United Nations Development Programme’s (UNDP) Deployment of Renewable Energy and Improvement of Energy Efficiency in the Public Sector Project.

The facilities slated to benefit are the National Chest Hospital and the Sir John Golding Rehabilitation Centre in St Andrew; Bellevue Hospital in Kingston; May Pen Hospital in Clarendon; Savanna-La-Mar Hospital in Westmoreland and the Black River Hospital in St Elizabeth.

Among other things, the interventions at these institutions will involve energy audits and the installation of energy-efficient lighting, solar photovoltaic technology and solar water-heating systems, PCJ said in a release yesterday.

SPECIALISED SERVICES

The selected institutions provide specialised services to a large cross section of the population and have high capital and operational expenditure.

Assessments revealed that energy-efficiency interventions at these hospitals can achieve considerable savings which will help to achieve the PCJ’s objective of reducing the public sector’s energy spend. The infusion of renewable energy and energy-efficient technology into the hospitals’ operations is expected to reduce their collective electricity demand by 1,305,000 kWh each year, which at current rates translates to more than J$41 million in savings.

The PCJ’s general manager, Winston Watson, said: “We are pleased to partner with the UNDP on this project, since the objective of incorporating more energy-efficiency solutions into the public sector’s operations aligns perfectly with our mandate to reduce the Government’s energy bills.”

The Deployment of Renewable Energy and Improvement of Energy Efficiency in the Public Sector Project is a US$12-million initiative comprised of three components.

The energy interventions to be undertaken by the PCJ are being carried out under the third component, which focuses on economic and fiscal instruments to facilitate the uptake of renewable energy and energy efficiency in the public sector.

Project execution under this component is projected to cost US$2.01 million, of which PCJ will provide just over US$1,360,000 and US$650,000 will come from the Global Environment Facility Trust Fund.

WORTHWHILE INVESTMENT

“We consider this a worthwhile investment for the Government and people of Jamaica as it will improve conditions in the health sector while reducing electricity costs, which will mean savings for the public sector, and we are therefore looking forward to a successful partnership with the UNDP,” Watson said.

Bruno Pouezat, UN resident coordinator and UNDP resident representative, said: “As we mark the official launch of this landmark project, I recall the words of United Nations Secretary General Ban Ki-moon, who in 2010 called for ‘a global clean energy revolution’. He added that “energy is the golden thread that connects economic growth, increased social equity and an environment that allows the world to thrive. We look forward to working with all of our partners in Jamaica in securing these ideals.”

Minister of Science, Energy and Technology Dr Andrew Wheatley said the public sector accounted for 15.5 per cent of total electricity sales in Jamaica in 2015.

“We are working assiduously to reduce our overall consumption and I am pleased that this project seeks to deploy renewable energy and improve energy efficiency in the public sector, as these interventions will serve to bolster our ongoing efforts to reduce the Government’s energy consumption while driving efficiency,” he added.

The Deployment of Renewable Energy and Improvement of Energy Efficiency in the Public Sector Project was officially launched on November 30, 2016. The PCJ will begin project implementation in early 2017.

Gleaner

Rooftop solar energy is becoming a financially viable way for millions of U.S. consumers to generate their own electricity — and utilities are doing everything to kill the solar boom before it gains too much traction. Utilities in states such as Florida, Wisconsin, and Nevada have tried to undermine rooftop solar at the regulatory level and in ballot measures. As a reaction, voters have fought back and beaten the efforts to squash solar energy.

The impact on residential solar companies Tesla (NASDAQ: TSLA), Vivint Solar(NYSE: VSLR), Sunrun (NASDAQ: RUN), and SunPower (NASDAQ: SPWR) shouldn’t go unnoticed. They’re winning the policy war against utilities, and as they do, it’ll open a larger and larger market across the country.

POLICY WINS ARE GOING TO RENEWABLE ENERGY

The election earlier this month was accompanied by a number of ballot initiatives that will impact solar energy for years to come. And for the most part, solar energy was a huge winner.

Despite utilities’ spending $26 million to pass a referendum that would have undermined solar economics in the state, Florida voters rejected the utility referendum. The state now looks like it’ll have a bright solar future.

In Nevada, less than a year after the public utility commission essentially killed the rooftop solar industry, residents overwhelmingly voted to break up Berkshire Hathaway (NYSE: BRK-B)-owned NV Energy’s long monopoly in the state. Customers have to be given energy choice, meaning more solar in one of the country’s sunniest states.

In the past, Wisconsin has tried to add fees to utility bills that would kill solar energy before it ever got started, but those attempts were rejected by the court.

There’s an important trend here for utilities and solar companies: When solar energy goes on the ballot or to the court, it wins. That should have every utility in the country frightened because that gives millions of customers choice regarding their energy needs.

THE LOOMING THREAT FOR UTILITIES

Policy wins are important because they lay the groundwork for future innovations to take hold in energy. Today, that means rooftop solar on more than 1 million homes in the U.S. — and that number is growing quickly.

The next step will be adding energy storage to homes, something that Tesla is leading on and that Vivint, Sunrun, and SunPower are all adding, as well. As energy storage is added, customers can use more of their own energy, making net metering less important and providing more flexibility for customers.

The holy grail for renewable energy is allowing customers to cut the cord to the utility altogether. We may be a decade from that being a reality, but the more utilities add fixed fees or demand charges, the more quickly the economics of cord-cutting will become compelling. Long-duration energy-storage technologies are already beginning to be deployed, and before long, a couple of Powerwalls and a long-duration energy-storage system may be a viable option for consumers, making utilities irrelevant.

THE SLIPPERY SLOPE IN ENERGY

Utilities are in a tough position, having incentives to apply policies that protect short-term profits but which may undermine long-term competitiveness. It’s clear that when push comes to shove, voters are willing to overturn utility policies, voting for solar energy across the country. That has to be a concern for utilities, and it shows that the future is getting brighter for solar energy companies providing the solutions customers want.

FlipBoard

 

At least one local environmentalist has hit back at Sally Porteous, custos of Manchester, over her arguments urging the Government’s authorisation of a coal plant for a US multibillion-dollar investment into the Alpart alumina plant in St Elizabeth.

The Chinese-owned Jiuquan Iron and Steel Company (JISCO) is planning to spend US$3 billion or J$387 billion for the upgrade of Alpart’s alumina plant in Nain and expansion into a special economic zone. More than 3,000 people are expected to be employed over the six-year period of initial investment.

However, a proposal to use a coal-fired plant has angered environmentalists, forcing the Government to come out declaring that any decision on whether to use coal is almost two years away.

Speaking last week at a Gleaner Jobs & Growth Forum in Manchester, Porteous did not hold back.

“While I listen to, and respect, the environmentalists, I sincerely hope that it is not going to be a case of crying wolf and preventing an enormous opportunity for Jamaicans to get work.

“From what I understand, they will not be using coal from China, they will be using coal from Colombia. The Alpart plant itself would be run on oil, and the coal they are going to be using for the coal plant will not emit any worst emissions than oil,” she added, noting that she recently met with Chen Chunming, the JISCO chairman.

But Diana McCaulay, chief executive officer of the Jamaica Environment Trust (JET), said Porteous’ analysis is not deep enough, and so, too, is her view that coal is cleaner than oil.

“People are entitled to their views. But coal is a 19th-Century technology. It is time for us to move forward, and it is time for us to take the position that we want development and we want industry and we want business and we want jobs for our people, but not at the expense of public health and the climate.”

She added: “Jamaica is incredibly vulnerable to climate change. To say that you’re willing to take this risk for some short-term jobs, I find mystifying.”

Jamaica has been going through decades of low growth, double-digit unemployment and crippling debt levels that have created the circumstances for a loan agreement with the International Monetary Fund.”

NOT FIRST TIME

It is not the first time a local official has waded into controversy over securing needed investment for the country. Last year January, in the face of a hotel investment being derail over breaches, Robert Pickersgill, then environment minister, in lifting a cessation order remarked that he took note of the “the substantial value of the project to the Jamaican economy, which outweighs all other consideration”.

In September, Mining Minister Mike Henry said a decision on the coal proposal was at least 18 months away.

Global environmental advocacy group Greenpeace has said constructing the plant would violate the Paris climate agreement aimed at limiting global warming.

Porteous maintained that the Chinese investment represents an opportunity to bring well-needed economic growth to central Jamaica.

“This is the centre of the island’s only chance for revival. We have nothing else. We’re not near a beach, the north coast is taking care of itself very, very well, and I can see very great business going into Kingston.

“We have the opportunity of a lifetime with JISCO coming to take over that plant,” she said.

The Manchester Chamber of Commerce said it is already taking steps to get the parish ready to claim some of the spinoff benefits.

“We’re currently in discussions with investors to try and lure them and encourage them to come into the development of the parish to aid in the development of the parish, especially as it related to three main areas,” said Michael Gottshalk, the chamber’s manager of communications and public affairs.

He said housing to accommodate the expected influx of workers, entertainment and parking are at the top of the list.

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