ENERGY Minister Phillip Paulwell says that the Jamaica Public Service Company (JPSCo) will now be responsible for sourcing the Liquified Natural Gas (LNG) needed to fuel its new generation plant.
“We are very confident that with the tremendous international reach that Marubeni and East West Power (JPSCo parent company) have, they are quite capable of doing this on their own,” Paulwell told journalists at yesterday’s Jamaica House press briefing at the Office of the Prime Minister in Kingston.
He said the recent discussions in Japan resolved that JPSCo would be fully responsible for ensuring that the generation plant is properly fuelled.
He explained that the light and power company received a licence last year to establish 360 megawatts of new generation driven by natural gas. However, he said that the Government interceded and attempted to get the fuel to the plant by way of FSRU pipeline and LNG supply.
“JPSCo has now accepted full responsibility for that,” he declared.
As to concerns that JPSCo could be forced to use diesel if it is unable to source LNG, resulting in higher electricity costs, Paulwell said the issue was raised in the discussions.
“The intention now… is from day one that gas will be the fuel that will be used at this plant and the only time we should contemplate using diesel is in the event of a hurricane when you have to move out the FSRU unit for a couple days,” he said, adding that this has been accepted by JPSCo.
In relation to JPSCo’s guarantee that using LNG will result in lower electricity costs for consumers, Paulwell said that the Government
MONTEGO BAY, St James – TOURISM and Entertainment Minister Wykeham McNeill has challenged stakeholders in the sector to augment alternative energy supply sources and expand the use of supporting energy in a collaborative effort to keep the industry buoyant.
“As a sector, I am encouraging all our tourism partners to do what you can incrementally and over time to expand your energy options and increase your use of sustainable energy,” McNeill charged.
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Sandals Resorts International (SRI) Director of Administrator and Business Processes, Wayne Cummings (left) and Tourism Minister Wykeham McNeill are locked in discussion following World Tourism Day Luncheon held at Sandals Montego Hotel, last week. (Photo: Kenroy Pringle) |
“I want to encourage our tourism sector partners to seriously explore the use of alternative and sustainable energy sources, in our collective efforts towards the future sustainability of the tourism industry“.
Meanwhile, former President of the Jamaica Hotel and Tourist Association (JHTA) Wayne Cummings noted that for a downward trend in energy costs to be realised, an energy policy would have to be written, “agreed to, and we all stick to it”.
“So we need to figure it out and make it known to everybody,” Cummings argued.
Cummings, who is also the Sandals Resorts International (SRI) director of administrator and business processes, was speaking during a World Tourism Day Luncheon held at the Sandals Montego Hotel, where McNeill, Junior Minister in the Ministry of Tourism and Entertainment Damion Crawford and other tourism officials, were in attendance.
Prior to the luncheon, the party toured a villa at the resort in which suites are fully powered by solar technology, allowing for the harnessing and storing of energy to power sections of the resort’s operation, through a pilot project undertaken jointly with Panasonic.
Paul Grey, head of ATL Energy and Engineering, said with the US$100,000 investment, savings of up to US$120,000 could be realised within a decade.
In the meantime, conceding that the cost of establishing alternative energy sources will be costly at the beginning, the tourism and entertainment minister also underscored the need to retrofit, among other solutions.
“We have entities of varying sizes and I realise the initial costs involved may seem daunting, but it may be that you need to retrofit your bulbs, install solar panels, implement waste water management systems plus a myriad of other solutions,” McNeill noted.
He further noted that energy strategies should form a major plank of each entity’s Environmental Management Policy.
“So today (Thursday) is a good time to once again seriously consider plans to implement energy solutions in a manageable form that will allow you to monitor the performance and provide real readings on the effect on your bottom line,” McNeill remarked.
“Let each and every one of us play our part in ‘Powering Sustainable Development‘ to the benefit of our sector, our society and nation at large”.
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The Government, or elements thereof, apparently felt it to be smart politics to allow weeks of confusion and speculation about liquefied natural gas (LNG) in Jamaica’s energy future. Such uncertainty, this mode of political communication presumes, dampens expectations and softens up the public for accepting less than what was initially promised.
So, the Government has announced that it isn’t abandoning natural gas, only that its introduction will now be driven by the light-and-power company, Jamaica Public Service (JPS).
JPS will build its planned 360-megawatt gas-fired power plant and promote an LNG storage and regasification facility as well as procure the LNG.
Essentially, having deemed Samsung’s bid for the LNG project would not cut the price of energy deeply enough to make a substantial difference to the Jamaican economy, the Government has withdrawn itself from promoting the venture.
The Government could have avoided the drama of recent weeks by being open and frank with the Jamaican people. We, however, have no fundamental problem with the new strategy. Maybe if the Government gets itself out of the way, then something positive will happen for energy, giving the economy a fighting chance.
Our broad support notwithstanding, we believe that there remain areas for clarification in Energy Minister Phillip Paulwell’s statement which, unfortunately, were not tested by MPs after his presentation to Parliament on Tuesday.
The first, and most apparent, of these is the scope of the project for the LNG to be promoted by JPS and its parent firms, Japan’s Samsung and East West Power of South Korea.
The original project on which the Government invited bids was for an LNG facility to handle 800,000 tonnes of fuel a year. Of this amount, JPS’s requirement would be around 250,000 tonnes, or 31 per cent.
The other presumed offtakers would be the alumina refiner Jamalco, with 350,000 tonnes or approximately 44 per cent of the total volume, and Jamaica Private Power, with 200,000 tonnes or 25 per cent. It was on these volumes, and acquisition of LNG at an appropriate price point, that the widely anticipated 30 to 40 per cent reduction in the cost of energy was predicated. Minister Paulwell said it will be delivered.
No strong commitment
However, with a project delivery deadline of 2015, we do not have the sense that there is any firm commitment by Alcoa to a deal with JPS, or that there is yet any substantial discussion between the parties. Jamalco, 55 per cent owned by Aloca, operates in a very competitive global market where Jamaica is in the second half of the efficiency table of alumina refiners. Alcoa has insisted on very specific price benchmarks if it is to join the LNG pool.
An obvious question, therefore, is what would happen to the project if an offtaker representing nearly half of the LNG requirement was not on board. This would seem to have implications for the price at which energy would be delivered.
Further, Mr Paulwell appears to have not much more than verbal undertakings from JPS to undertake the project and lower the price of electricity by at least 30 per cent. At some point, this will be put in writing.
But the minister suggested that regulatory oversight by the Office of Utility Regulations will not extend to pricing. That demands clarification.
It would make sense if, at this stage, the Government publish all the documentation on the LNG project.
The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.
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THE Government says that it is withdrawing from the fuel source selection process to focus on creating a legislative and regulatory energy framework this fiscal year.
However, Minister of Science, Technology, Energy and Mining Phillip Paulwell told the House of Representative yesterday that the Government has not abandoned plans to introduce Liquefied Natural Gas (LNG) into Jamaica by 2015.
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Minister of Science, Technology, Energy and Mining Phillip Paulwell |
He said that plans are well advanced for the introduction of LNG, but given the result of the bidding process, the Government has determined that it has taken the matter as far as it can go. He added that it was also the Government’s view that private electricity and alumina producers would have much more flexibility in procuring fuel supplies and use their international leverage to get the best possible prices.
However, “as a Government, we (will) continue to support and facilitate private investors as we work together to achieve the best possible solutions,” Paulwell said.
He stated that the LNG committee will be immediately disbanded and replaced with a body that includes members of the Jamaica Energy Council, the Office of Utilities and his ministry.
“With the termination of the work of the LNG steering committee, there will be no need to access the remaining US$2.6 million that was originally budgeted,” he explained in reference to the fact that the Government has already spent US$2.8 million of the US$5.4-million proposed budget for the LNG project.
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Mr Speaker, I rise to update this Honourable House on matters related to energy, and specifically the matter of LNG.
Electricity prices are the most important impediment to economic growth and job creation facing Jamaica today. Mr Speaker, there is no delicate way to repeat this: Jamaica will not move forward with electricity rates of 40 US cents per kilowatt hour. For us to achieve competitiveness in the global economy, we must reduce this burden on our manufacturers, our businesses and our people.
Mr Speaker, it is my goal to oversee the reduction of electricity costs in Jamaica, to between 15 and 18 cents per kilowatt hour, a rate that will allow Jamaicans to build industry, create jobs, and be competitive.
In November 2010, recognising the urgency of our nation
JAMAICANS are being encouraged to pay keen attention to energy efficiency when purchasing home appliances and other devices that utilise electricity.
The appeal was made yesterday by officials of the Development Bank of Jamaica (DBJ), which is spearheading a national project that seeks to promote the benefits of energy efficiency and conservation. The project also seeks to encourage Jamaicans to make greater use of renewable energy such as solar, particularly in small and medium enterprises.
In addition to funding from the DBJ, the US$807-million DBJ GreenBiz Energy Efficiency Project receives assistance from the Inter-American Development Bank.
According to DBJ officials, who were guests at the Jamaica Observer weekly Monday Exchange, a number of Jamaican consumers can be described as being penny wise and pound foolish when purchasing appliances such as television sets, air-conditioning units, light bulbs, and refrigerators.
Christopher Brown, energy project co-ordinator at the DBJ, cautioned Jamaicans to pay attention to what he cited as the life cycle cost of a product versus the up-front cost. “Although you spend X amount for a TV now, the cost of electricity for the TV should also be factored in. I know that in Jamaica we are driven by purchasing power, and so one TV might cost one and a half times another, and because of that high capital cost people don’t invest in it. However, at the end of the day, the person who bought the cheaper TV would have paid a lot more, over time,” Brown explained.
His point was endorsed by president of the Jamaica Society of Energy Engineers, Owen Gunning, who pointed to a major difference between the amount of energy consumed by an old refrigerator, as opposed to a newer one. “An old fridge for example would give you about 600 watts, a newer fridge would probably take you down to 250 watts,” said Gunning as he encouraged consumers to look for the energy star on appliances.
He added that the same principle applies to air-conditioning units, some of which continue to be dumped on Jamaica, despite their high levels of inefficiency. “You have what is referred to as an Energy Efficiency Rating and you have people dumping on us AC units that have energy efficiency ratio of 7.5, but you can get energy efficiency ratio of up to 18,” said Gunning, a University of Technology lecturer who explained that the higher the ratio, the less it will cost to operate the unit.
He also chided persons who continue to use electric water heaters and argued that they would save significantly on their electricity bills if they were to invest in solar water heaters.
Gunning also pointed to significant differences in the amount of energy consumed by older type television sets as opposed to LCD and LED televisions.
Meanwhile, the DBJ energy project coordinator explained that a marketing campaign has been launched to support the project. The campaign will appeal to all Jamaicans, but will target operators of small and medium enterprises and will also target school administrators, many of whom have been grappling with massive electricity bills.
Brown indicated that as part of efforts to promote the energy efficiency project a fair will be held on October 12 at Emancipation Park in St Andrew.
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THE country cannot continue to depend on oil if the island intends to make meaningful progress with its economy, a leading energy engineer has said.
Certified energy manager and energy auditor, Owen Gunning, who is also president of the Jamaica Society of Energy Engineers, wants a full-scale effort to be made to reduce Jamaica‘s dependence on oil as its base fuel and insists that a ‘more action, less talk’ approach should be adopted.
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Observer Monday Exchange guests (from left) Alando Terrelonge, partner at Bailey Terrelonge Allen; Edison Galbraith, general manager, loan origination, Development Bank of Jamaica (DBJ); Christopher Brown, energy project co-ordinator, DBJ; and Owen Gunning, certified energy manager, certified energy auditor and president of the Jamaica Society of Energy Engineers, continue the discussion on energy efficiency following the end of the Exchange yesterday at the newspaper
Zacca
WITH ENERGY Minister Phillip Paulwell scheduled to address the House of Representatives today, the Private Sector Organisation of Jamaica (PSOJ) says it wants him to provide clarity on the way forward for the implementation of liquefied natural gas (LNG). “We are looking for transparency and we are looking for some certainty because we feel this issue has got to be addressed in a way that the wider society buys into it and in particular, my constituency, the business sector needs to get that confidence booster out of it,” Chris Zacca, head of the PSOJ, told participants in a Gleaner Editors’ Forum at the the newspaper’s central Kingston head offices yesterday. There have been jitters in the society ever since |