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No Defying OUR – Paulwell To Grant 381MW Licence To EWI, Cites Fear Of Court Action

April 3, 2014 Webmaster

Energy Minister Phillip Paulwell. – File

Energy Minister Phillip Paulwell yesterday revealed he has no intention of going against an Office of Utilities Regulation (OUR) recommendation to grant a licence to Energy World International (EWI).

Paulwell, who returned to the island from St Lucia yesterday afternoon, said “once the OUR recommends to me a licence, I sign”.

He added: “They have taken me to court before, I won’t risk that again.”

Said Paulwell: “They have submitted to me, since I returned as minister (in January 2012), over 120 electricity licences, I have signed every single one of them. I am going to my desk now and I report in the morning.”

The OUR last Wednesday recommended that EWI be granted a licence to supply 381 megawatts of generating capacity using natural gas as the fuel source.

But several voices have come out in opposition to the licence being issued to the Hong Kong-based company, with the Office of the Contractor General, members of civil society, the Energy Monitoring Committee (EMC), and the private sector urging Paulwell to proceed with caution.

However, the minister yesterday indicated he has a legal obligation, under the OUR Act, to grant the licence.

“I am a creature of the law and rules, and there are certain rules that govern my operation and one of which is that you have a body called the OUR, and there are some regulations, and once they recommend to the minister a licence, it would be a serious matter to go against them,” Paulwell said.

LACK OF INFORMATION

In the meantime, the EMC said it remained concerned about the lack of adequate information provided by the EWI to support its application for a licence to construct the plant.

However, Peter Melhado, co-chair of the EMC, said the OUR was the body with the authority to make such recommendations and the committee has no choice but to accept it.

Melhado said the EMC would now turn its attention to ensuring that EWI adheres to all aspects of the licence.

“Our focus will definitely be on certainly commenting if we see any variant between … what is in the licence and the PPA (power purchase agreement) … and if there are any breaches,” he said.

Jamaica Gleaner;

Alternative Energy Electricity Energy Saving Government News Solar Energy

Has Mr Pickersgill been sidelined on Goat Islands?

March 7, 2014 Webmaster

AS the discussion about the building of a port at Goat Islands heats up, we note that the minister with responsibility for environment and climate change, Mr Robert Pickersgill, has been silent on the subject.

Minister Pickersgill’s absence from the debate is especially glaring because it was he, while on a five-day visit to China with Prime Minister Portia Simpson Miller and her team last August, who brought the matter into the public domain when he told representatives of China Harbour Engineering Company (CHEC) that the location was “now under very serious consideration”.

It’s glaring, too, given the environmental implications of building port facilities, with the accompanying infrastructure, in an area zoned for fish sanctuaries, game reserves, and housing what is perhaps the most pristine dry limestone forest in the region.

Housing, Transport and Works Minister Dr Omar Davies has been the one doing all the talking on this issue. To date, the most details the country has been fed about the much-talked-about project came in his presentation to Parliament last week Tuesday in which he outlined the basic scope of the works.

According to Dr Davies, the activities to be carried out under phase one include dredging and land reclamation, the construction of berths, warehouses, an industrial park, a container terminal, bridges, roads, pipelines, sewage lines and a sewage treatment plant.

CHEC intends, too, to build a coal-fired plant to avoid the high cost of electricity provided by the Jamaica Public Service Company.

While we maintain that environmental preservation and development do not have to be at odds with each other, we cannot overlook the effect of burning coal on air quality. In China, for instance, coal is used for about 65 per cent of its energy needs, but the Government is now seeking to cut its reliance on the fuel source by two percentage points a year.

Importantly, when coal is burned, it releases carbon dioxide, the main culprit in global warming and climate change.

On that basis, as Ms Dianna McCaulay rightly pointed out last week, the decision to allow such a plant in Jamaica is not in line with the country’s draft climate change policy. Neither does it appear to be in line with Vision 2030, which seeks to phase out fossil fuels to the point where 20 per cent of the energy mix will be supplied by renewable sources by 2030.

Surely, the apparent contradictions have not escaped Minister Pickersgill and the technocrats in his ministry. What, then, accounts for his silence?

Is the minister toeing the party line, or is he no longer committed to his oft repeated phrase “with climate change we must change”?

Jamaica Observer;

Alternative Energy Electricity Energy Saving Government News Oil Solar Energy

World’s Oil Will Run Out in Ten Years

February 11, 2014 Webmaster

The latest measurements confirm that the world’s oil and natural gas supplies are running out too fast. At some time between 2010 and 2020 the world’s supply of oil and gas will fall below the level required to meet international demand.

The US government is aware that we are about to endure a disastrous international energy shortage. According to Dr James McKenzie, a senior member of the climate change programme at the World Resources Institute in Washington, USA: “That’s why we went to war in Iraq.”

We always knew the world’s oil reserves would run out eventually. The oil was formed by natural geological processes which occurred over millions of years. Oil consumption presently exceeds 25 billion barrels a year and demand continues to spiral upward, out of control. The outcome is inevitable.

In the 21st Century we rely on oil (petrol) and gas for transport – cars, lorries, ships, aircraft – as well as electrical power. We cannot survive without oil and gas, and when the supply runs out the great engine of Western civilization will finally grind to a halt. We are heading for an event that will be remembered as one of the great disasters of human history, and life is going to get harder for everybody as the day of reckoning draws nearer.

In the years ahead, wars will be fought over oil and fuel as the oil-dependent superpowers struggle in vein to preserve our unsustainable way of life. We are entering a period of great change and there are be difficult times ahead. The process has already begun. Students of prophecy will be familiar with certain relevant verses from Christian scripture concerning the signs of the end times (Matt. 24.8; Mk 13.8, Rom. 8.22; Rev. 12.03, 21.1-4). As it was translated in 1961 in the New English Bible: “With these things, the birth pangs of the new age begin” (Mt.24:8; Mk.13:8). Whether you are religious or secular, you should be aware that the tide of history is turning.

In North America, where we use far more oil than anywhere else on Earth, the vast majority (71%) of electrical power generation is entirely dependent on fossil fuels – coal (52%), gas (16%), and oil (3%). The world’s natural gas is running out along with the oil, and the coal supply is not unlimited either. Nuclear energy contributes only one-fifth to the US power network, and 7% of power is hydroelectric. Only 2% of US electricity production is from renewable sources. As we continue to burning up the world’s dwindling fossil energy sources at a terrifying rate, we simultaneously unleash catastrophic damage to the natural environment.

The Insider recently reported a wave of four major electrical power outages which struck the US; then the UK; followed by Denmark and Sweden; and then Italy, Switzerland, Austria and France. The effects only lasted a few hours, but each case was the biggest power failure in the history of the affected country. These massive power cuts were separated by a matter of days. The governments were only practicing this time. This is just the beginning.

It would be prudent to pursue alternative energy sources before it is too late, but the oil corporations will never allow this to happen. So important is oil as a resource that it brings great wealth and power to those who control it. Consequently, our corrupt politicians, whose power is lavishly funded with oil money, prefer to serve the short-term interests of greedy oil executives than the long-term interests of ordinary people like you. But as long as we have food in our bellies and entertainment to keep us busy, why should we care? Thus, it is the immorality and indifference of our species that ultimately leads to our own demise.

Nothing lasts forever. Like all the great civilizations in the past, ours has a limited life-span. A few years from now the Westernized world will reach the point where there is no longer enough fuel to sustain civilization in its present form. This will literally be the end of civilization as we know it.

The Insider;

Electricity Government LNG News

Shake up, OUR

October 24, 2013 Webmaster

IN THE face of Energy World International’s (EWI) placement of its US$7-million security bond on the 360-megawatt power plant deal, it is opportune for the Government to take a hard look at the Office of Utilities Regulation (OUR) and take some serious decisions about the place. And they must be quick about it.

The first order of business is to find an obviously strong, competent and independent-minded head for the place, with a clear understanding that part of his or her mandate is cleaning shop, even as it gets on with the job of completing the energy project.

Putting this process in train lies squarely with Prime Minister Portia Simpson Miller. It is her obligation, under the OUR Act, to recommend the candidate for the post of director general of the regulatory body to the governor general. If, as we suspect, it was the case in the past that prime ministers allowed line ministers to effectively name the nominee, we recommend that Mrs Simpson Miller break with practice.

For ceding that responsibility, at this time, to Phillip Paulwell, would be to handicap the appointee, given the collapse of confidence in Mr Paulwell’s mining and energy ministry to get anything right, given the mess that has been made of the power plant issue.

To be fair, that is not all Mr Paulwell’s fault. Much, and perhaps most, of the blame rests with the OUR.

A CLUMSY HANDLING OF THE MATTER

That Jamaican consumers pay an unaffordable economic rent for electricity, which at US$0.42 per kilowatt-hour is among the highest in the region, is well known. Understand that it makes our firms uncompetitive, which, in turn, constrains economic growth.

Yet the OUR, which has been governing the responsibility for procurement of newer, and supposedly cheaper, generating capacity, has, at best, and perhaps charitably, been clumsy and bungling in its several attempts at the process. Its latest was the worse.

Delivering cheaper energy to Jamaica, which would be good for the economy, also coincides with Mr Paulwell’s political interest/ambition. It is understandable that when EWI declared an interest in Jamaica, with an apparently attractive proposal, that he would be keen to have that considered, notwithstanding that it was after the OUR’s initial deadline for unsolicited offers/expressions of interest.

THE OUR NEEDS A FIX

The response of those already engaged in the process, who might have felt they were in the most advantageous positions, was entirely predictable. The claim that the goalpost was being shifted was obvious.

But worse than Mr Paulwell was the OUR. The agency disagrees with the Office of the Contractor General that it breached the procurement rules; that EWI’s proposal should not have been entertained; and that if it was to be considered, the initial request for proposal abandoned and the process started anew. Beyond the technical issues of the procurement rules is the weak, or failed communication strategy on this issue, which has left the public uneasy about the basis of its decision.

The OUR is a critical regulatory agency. But it is need for an urgent fix. That is why we feel that a public-private sector oversight group should be part of the strategy for this energy project.

Mobile Jamaica Gleaner;

Electricity Government JPS News Oil

Cost of electricity rises to record high

October 20, 2013 Webmaster

The cost of electricity has risen to a new record this month on continued slide in the value of the dollar and higher cost of fuel.

Higher fuel and IPP charges have pushed the cost of electricity up by 3.5 per cent this month after a four per cent increase in September. Together both increases mean the cost per kilowatt hour of electricity is at its highest level ever for households.

RJR News;

Alternative Energy Electricity Energy Saving Government News Solar Energy

No Word On Bidders For Renewables Project

October 17, 2013 Webmaster

Up to yesterday, there was still no word from the Office of Utilities Regulation (OUR) on the security bond from the three selected preferred bidders for the 115 megawatts of electricity-generation project using renewable energy-based power-generation facilities on a build, own and operate basis.

On October 1, the OUR announced that it had selected three companies which would supply 78 megawatts of the required amount. They had until this past Tuesday to provide the OUR with the applicable proposal security.

The named preferred bidders were Blue Mountain Renewables LLC, to supply 34 megawatts of capacity from wind power at Munro in St Elizabeth; Wigton Windfarm Limited, to supply 24 megawatts of capacity from wind power at Rose Hill, Manchester; and WRB Enterprises Inc, to supply 20 megawatts of capacity from Solar PV through facilities in Content Village, Clarendon.

The proposed delivery price to the national grid for these projects ranged from US$0.1290 to US$0.1880.

Jamaica Gleaner;

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OUR Names Preferred Bidders For 115MW Electricity-Generation Project

October 2, 2013 Webmaster

The Office of Utilities Regulation (OUR) has selected three preferred bidders for the supply of up to 115 megawatts of electricity-generation capacity from renewable energy-based power-generation facilities on a build, own, and operate basis.

In a release yesterday, the OUR said from the proposals for energy-only, the evaluation panel recommended three entities as preferred bidders with capacity amounting to 78 megawatts. These comprise two projects offering energy from wind, amounting to 58 megawatts; and one offering solar, amounting to 20 megawatts.

The preferred bidders are Blue Mountain Renewables LLC, to supply 34 megawatts of capacity from wind power at Munro in St Elizabeth; Wigton Windfarm Limited, to supply 24 megawatts of capacity from wind power at Rose Hill, Manchester; and WRB Enterprises Inc, to supply 20 megawatts of capacity from solar PV from facilities in Content Village, Clarendon.

The proposed delivery price to the national grid for these projects ranged from US$0.1290 to US$0.1880.

The preferred bidders have been directed to provide the OUR with the applicable proposal security by October 15.

The OUR said on June 3 that it had received 28 bids from 20 interested entities, which submitted proposals to supply renewable energy electricity generation of greater than 100 kilowatts and up to 115 megawatts to the national grid.

The bids were tendered by both local and international entities, with eight proposals received from local companies. Two proposals were received for wind, one for biomass, and 25 for solar energy.

Jamaica Gleaner;

Alternative Energy Electricity Energy Saving Government News Solar Energy

PV Production Grows Despite a Crisis-Driven Decline in Investment

September 30, 2013 Webmaster

Global production of photovoltaic (PV) cells grew by 10% in 2012 in comparison to 2011 despite a 9% decline in solar energy investments according to the annual “PV Status Report” released by the European Commission‘s Joint Research Centre. Europe remained a leader in newly installed capacities accounting for 51.7% (16.8 GW) of the 30 GW installed worldwide.

Abundant solar resources in combination with zero emissions from solar installations have attributed to PV energy systems a key role in the transition to a low carbon energy supply. This potential has driven development of more efficient PV modules and transformed the sector into one of the fastest growing industries. Production of PV cells and modules has gone from 46 MW in 1990 to 38.5 GW in 2012. Statistically documented cumulative installations worldwide accounted for almost 100 GW in 2012 placing the EU in the lead position with its share of over 69 GW.

Within the EU, Germany has kept its leading position in PV installation with an additional 7.6 GW in 2012, while Italy‘s newly installed 3.5 GW have allowed it to reach an electricity production covering 7.3% of the total electricity demand during the first seven months of 2013.

A steep, 80% drop of solar modules prices between 2008 and 2012, triggered by an overcapacity of production, created serious financial problems for manufacturers, but led to a consolidation of the industry and fuelled an extensive growth for the PV market in Asia: 60% in 2012 and a projected 100% in 2013. The rise in annual production has resulted in China and Taiwan to accounting for 70% of the global production.

Even with the on-going difficult economic conditions, the number of the new PV markets is increasing. This, along with rising energy prices and the pressure to stabilise the climate will maintain a high demand for solar power systems. Electricity production from PV modules has already proved that it can be cheaper than current conventional consumer electricity prices in many countries. In addition, renewable energies which are not fuel-dependent, are, in contrast to conventional energy sources, among the technologies to offer the prospect of a reduction in prices.

Science Daily;

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The Future Of Power In Jamaica

September 25, 2013 Webmaster

Is there an energy problem in Jamaica? The growing energy crisis in Jamaica has been a cause for concern ever since the Government divested the Jamaica Public Service Company (JPS).

Consumers and producers complain about the high cost of energy. Firms often blame their low productivity, low output, high price for final goods and services, as well as low profitability, on the high cost of energy in Jamaica.

The lowest consumers pay in Jamaica is $40, or US39 cents per kilo watt hour, compared to the United States where energy cost is as low as 12 cents per kilo watt hour in some places.

Jamaica consumes approximately 605 mega watts of energy per day. The country has the capacity to produce in excess of 700 mega watts per day from the old, inefficient power plants across the island. However, plans are being put in place to replace 475 mega watts of our daily usage with cleaner, more efficient sources; a 360-mega watt plant and 155 mega watts from renewable sources including, but not limited to, solar, wind mill and hydro. These two projects combined, are expected to reduce the cost of energy to the consumer by 25 to 30 per cent by 2016.

What is being done about the issue?

The winner of the bid to establish the renewable-energy sources has not yet been announced, but Azurest Cambridge Consortium has won the bid to possibly build this new energy plant that will supply 360 mega watts of Jamaica’s daily usage.

The estimated cost, including buildings, barges, the plant and other infrastructure is US$690 million. Total cost, minus labour, is estimated to be US$580 million. In total, the plant will use three barges, the first barge will be delivered 17 months after Azurest and JPS sign off on a power-purchase agreement. Negotiation are expected to start within the next three weeks, and should take about three to four months.

Azurest plans to sell the energy to JPS, at a price between 13 and 22 cents US per kilo watt hour, earning no more than 20 per cent return on its investment.

The US$100 million core equity committed to project, with hopes of raising US$50 million locally, and the rest overseas, in a 78 per cent to 22 per cent debt-equity ratio.

How will they finance the rest?

The International Finance Corporation plans to raise funds to possibly support the establishment of the 360 mega watt-power plant project in Jamaica, by issuing bonds on the domestic market.

IFC plans to raise US$500 million, or J$51 billion, from the issue. The bonds will have a triple-A rating and will be targeted at pension funds, banks and other investors. The bonds will also carry lower interest rates than the Bank of Jamaica Treasury Bill Rates.

This strategy to raise funds is not new as it was employed in the Dominican Republic to raise approximately US $10 million to fuel two micro-finance operations in the country. The IFC is unsure as to the exact date these bonds will reach the market, but know it will occur during the course of Jamaica’s four-year agreement with the IMF.

Upon establishment of the plant, Azurest will sell all the energy it produces to the JPS, who operate both a monopoly and a monopsony market.

What is a monopoly market?

This is a situation where there is only one seller of goods and/or services in the market. There is no competition as other firms cannot enter the market freely due to barriers to entry.

In this case, based on JPS’s contract with the Government, no other firm can supply electricity in Jamaica.

Given that JPS is the only supplier in the market, if unregulated; it can charge any price it desires. The company usually charges a price higher and supply less than what is efficient.

What is a monopsony market?

A monopsony market is the other way around, instead of one sell such as the case with the monopoly, in this case there is only one buyer of goods and/or services.

JPS is the only company that buys energy in Jamaica. Any company can produce energy, but given that JPS is the only distributor of electricity, it is the only company that buys energy.

In this case, if unregulated once more, the JPS can push the cost price down because there are no other firms in this purchasers market.

Who regulates?

In Jamaica, The Office of Utilities Regulation monitors JPS’s activities.

It regulates and prevents any abuse of monopoly and/or monopsony power that the JPS might be tempted to exercise.

The Jamaica Gleaner;

Alternative Energy Electricity Energy Saving Government News Solar Energy

China Funding Street-Light Project In Dominica

September 19, 2013 Webmaster

Dominica is implementing a US$34-million solar street-light project with assistance from China, Public Works Minister Rayburn Blackmore has said.

He said the 33-month project would involve installation of 4,851 solar street lights across the country, and that Beijing would be providing 2,500 of those lights.

“The prime minister has been able to use his good office to seek funding and assistance from The People’s Republic of China. We are in the process of launching a comprehensive national street lighting project that will seek to bring solar lights to all our main roads in Dominica, including urban areas,” he said.

Blackmore said the project would be executed in separate phases.

“What we intend to do is first of all address our main roads. During the first phase, we intend to install 2,500 solar street lights. That will significantly improve the security and safety of our roads for pedestrians and persons who use the road,” he added.

Jamaica Gleaner;

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