Energy Minister Phillip Paulwell (standing) and Joan Spencer-Ernandez, Board Chair of the Caribbean Maritime Institute (CMI), bear witness as CMI Executive Director Fritz Pinnock and Jamaica Public Service Company Chief Executive Officer Kelly Tomblin sign an agreement to retrofit existing street lights with light-emitting diode (LED) units. The manufacturing and assembly of the lights are to be done locally by engineers and technicians at the CMI.
The Office of Utilities Regulation (OUR) must quickly decide whether it is up to the job it is mandated to perform. If it is not, it must move over and let someone else get on with it.
We especially refer to the agency’s ability to determine Jamaica’s future energy needs, the fuel mix that will meet those requirements at the cheapest cost, and to evaluate bids that will deliver power most economically.
To be frank, this newspaper is not now sanguine of the OUR’s capacity to deliver. Nor are we any more convinced that the Government is appropriately seized of the importance of the urgency with which the matter needs to be resolved.
Or, maybe it is that our people are playing games, or have motives understood only by themselves. For when seemingly rational people engage in irrational behaviour, it is cause to wonder.
There, long ago, appeared to have been consensus on the energy question: that the cost of electricity, at around US$0.42 per kilowatt-hour, makes Jamaican businesses uncompetitive and is a major drag on the country’s economy. So, a substantial lowering of the cost of power, it was agreed, or so we thought, was a national priority.
NATURAL GAS AND HOT AIR
The issue was what would constitute a reasonable lowering of the price of energy, and how this was to be achieved. After more than a decade of haggling and procrastination, it was finally agreed, as official policy, that natural gas would be the fuel of choice.
In 2010, a 480-megawatt gas-fired plant, with appropriate facilities for the storage and regasification of liquefied natural gas (LNG), was put to tender. But that arrangement was abandoned when it was determined that the bidding process may have been affected by conflicts of interest and/or inappropriate behaviour.
Towards the end of 2011, the Jamaica Public Service Company (JPS), which has a monopoly on the transmission and distribution of electricity, was the sole bidder and selectee to build and operate a 360-megawatt plant. But by February this year, the OUR was withdrawing from the arrangement during differences over bond payments and the inability of JPS to source LNG at price points the regulator felt were tolerable.
PROPOSAL EXTENSIONS
In early February, the OUR announced it would accept unsolicited proposals for the power plant.
Five entities filed bids, comprising 14 proposals. The OUR shortlisted three companies, and a final recommendation to the Government should have been done by April 15. But before that time, the process was reopened to allow the consideration of a bid to the Government by a latecomer.
Since then, there have been two extensions to accommodate changes by the OUR to the instructions to the bidding entities. So, instead of completing an evaluation of the bids by August 28, the OUR now says that will happen by September 9.
Overall, the projection for completing negotiations with the successful bidder, by the OUR’s estimate, will be delayed by only a few weeks, thus allowing the construction of the facility to begin in early 2014. This newspaper, however, is not convinced.
At the very least, the entire process has been messy, overlaid by a whiff of amateurism – or worse.
Energy is too crucial to the economy for such sloppy management. Perhaps there is more that people should know than meets the eye.
General Manager for Loan Origination and Portfolio Management at the Development Bank of Jamaica (DBJ), Edison Galbraith (left), in conversation with Managing Director at FosRich Company, Cecil Foster, at a recent energy forum, held at the Montego Bay Convention Centre, in St. James.
The Development Bank of Jamaica (DBJ) is offering a special energy efficiency loan at eight per cent, for business operators to cut costs and advance the country
The regional think tank, Caribbean Policy Research Institute (CaPRI), is urging Caribbean governments to diversify the incentives being offered in the renewable energy market.
Presenting an update on its renewable-energy research that it expects will influence policies and inform potential investors on the way forward in the sector, CaPRI’s renewable energy programme manager, Dr Suzanne Shaw, said the research has revealed that the region should be aiming for greater diversification of incentives in the renewable energy market.
Shaw said though there were incentives dedicated to renewable energies, many of them were tax incentives.
She also noted that there were attempts to change this with the implementation of net-billing schemes in countries such as Barbados and Jamaica but more needs to be done.
“We are hoping to get to a stage where we have a more diverse policy mix that can really treat the needs of the various technologies we find in the Caribbean,” Shaw said.
Ja is ahead of the pack
She said the research, which started in 2011 and is expected to be completed in 2015, has also revealed that Jamaica is ahead of the curve in the drafting of renewable-energy policies.
“There are policies in place in many Caribbean countries and I think it is fair to say that Jamaica is ahead in the development of renewable-energy policies,” Shaw said
She said there were two parts to the research being conducted and these would help both regional policy makers and the private sector to push the renewable-energy sector forward.
“What we are trying to do is on one hand influence policies in Caribbean countries to create an enabling environment to allow renewable energy to emerge and occupy the place that it can occupy as an economic alternative to conventional energy sources,” Shaw said.
She added that CaPRI is trying to also make sure enough information is available to potential investors so that they can develop viable energy projects and increase implementation.
CaPRI’s research has also received high marks from the Ministry of Science, Technology, Energy and Mining.
Hillary Alexander, permanent secretary in the ministry, said the research was interesting and would add value to the work the ministry is currently undertaking.
She said CaPRI has been approached to share its preliminary findings with the ministry.
The regional think tank, Caribbean Policy Research Institute (CaPRI), is urging Caribbean governments to diversify the incentives being offered in the renewable energy market.
Presenting an update on its renewable-energy research that it expects will influence policies and inform potential investors on the way forward in the sector, CaPRI’s renewable energy programme manager, Dr Suzanne Shaw, said the research has revealed that the region should be aiming for greater diversification of incentives in the renewable energy market.
Shaw said though there were incentives dedicated to renewable energies, many of them were tax incentives.
She also noted that there were attempts to change this with the implementation of net-billing schemes in countries such as Barbados and Jamaica but more needs to be done.
“We are hoping to get to a stage where we have a more diverse policy mix that can really treat the needs of the various technologies we find in the Caribbean,” Shaw said.
Ja is ahead of the pack
She said the research, which started in 2011 and is expected to be completed in 2015, has also revealed that Jamaica is ahead of the curve in the drafting of renewable-energy policies.
“There are policies in place in many Caribbean countries and I think it is fair to say that Jamaica is ahead in the development of renewable-energy policies,” Shaw said
She said there were two parts to the research being conducted and these would help both regional policy makers and the private sector to push the renewable-energy sector forward.
“What we are trying to do is on one hand influence policies in Caribbean countries to create an enabling environment to allow renewable energy to emerge and occupy the place that it can occupy as an economic alternative to conventional energy sources,” Shaw said.
She added that CaPRI is trying to also make sure enough information is available to potential investors so that they can develop viable energy projects and increase implementation.
CaPRI’s research has also received high marks from the Ministry of Science, Technology, Energy and Mining.
Hillary Alexander, permanent secretary in the ministry, said the research was interesting and would add value to the work the ministry is currently undertaking.
She said CaPRI has been approached to share its preliminary findings with the ministry.
(From left) Professor E Nigel Harris, Vice Chancellor, University of the West Indies (UWI) in conversation at the launch of the Promoting Energy Efficiency and Renewable Energy in Buildings project, with Professor Anthony Clayton; Dr Camille Bell-Hutchinson; Edu Hassing and Professor Tara Dasgupta
BUILDINGS which generate as much or more power than they consume.
That is the future for Jamaica
(From left) Professor E Nigel Harris, Vice Chancellor, University of the West Indies (UWI) in conversation at the launch of the Promoting Energy Efficiency and Renewable Energy in Buildings project, with Professor Anthony Clayton; Dr Camille Bell-Hutchinson; Edu Hassing and Professor Tara Dasgupta
BUILDINGS which generate as much or more power than they consume.
That is the future for Jamaica
ENERGY minister Phillip Paulwell has set a deadline of January 2016 for the completion of the expansion and upgrade of the state-run oil refinery Petrojam.
Paulwell, guest speaker on Monday at two Constant Spring Road-based service stations which have introduced the eco-friendly Ultra Low Sulphur Diesel (ULSD) fuel, said the construction had to be along that timetable.
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A section of the government-operated oil refinery Petrojam.
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“We have been told the new generating capacity of electricity will be in place by January, 2016, so we have to finish the expansion and upgrade of the refinery by then,” Paulwell told Auto.
Paulwell, the minister of science, technology, energy and mining, said he would advance the argument at tomorrow’s PetroCaribe Summit in Nicaragua.
Jamaica is one of 18 countries which benefit from the PetroCaribe agreement, drafted by the now deceased
The Jamaican government says it will establish a “firm” schedule to implement the upgrading and expansion of the Petrojam refinery, as it seeks to make the operations more modern and efficient. Science, Technology, Energy and Mining Minister Phillip Paulwell, said the issue will be discussed at the 8th PetroCaribe Summit, scheduled for June 29, in Nicaragua. “We have been talking too long about the upgrade of this refinery, it has been producing for us for close to 40 years. We are now on a firmer path, especially since the new president of Venezuela has assumed office, to pursue some of the things that were not done, over the last five years, including the expansion and upgrade of the Petrojam refinery,” he said. Paulwell said the government is hoping to move this process a step closer to fruition, with the Venezuelan government having already committed, as part of the economic zone of PetroCaribe, a relationship which will see value added, along with efficiency. In May, during the PetroCaribe ministerial meeting in Venezuela member states agreed on an economic zone to boost regional development and Paulwell said that Jamaica will eventually produce its own ultra-low sulphur diesel, as this will be synchronised with upgrading of the refinery. “We are importing this fuel, and it’s not our intention that this will be a long-lasting activity. The day will soon come when we will be producing this fuel in Jamaica.” 2006 agreement In 2006 Jamaica signed an agreement with Venezuela for a 49 per cent stake in Petrojam, and as part of the agreement, production should have moved from an average of 30,000 to 50,000 barrels of petroleum products daily, starting in 2007, but this output has not yet been realised. “We are now back on track. We have to update some of the financials, and the first thing the Board has agreed to do, with the support of Venezuela, is to get that front-end engineering design project updated, so that we have figures that are more realistic than the2007/2008 figures,” Paulwell said. Paulwell said that many of the features of the expansion project are now more positive than they were in 2007, to justify the expansion and upgrading of the refinery. “It will enable us to produce those things that we use in Jamaica – LPG, gasolene, and low sulphur diesel – so that we will be almost self-sufficient, and be able to export some of it,” he said, pointing out that the by-product, petcoke, will enable the generation of 100 megawatts of cheap electricity. “What we will be doing this weekend in Nicaragua is to establish the firm schedule towards its implementation and funding,” the minister said. Upgrading of the refinery will ensure its viability in the long-term and allow for the installation of treatment facilities to meet new environmental specifications for diesel oil, and gasolene. Additionally, Paulwell said discussions will be held at the Summit on the trade compensation mechanism aspect of the PetroCaribe Agreement, which allows Jamaica to trade goods and services, as part of the process of repaying PetroCaribe loans. “We have a very significant development, which we hope will be crystallised this week, in Nicaragua,” he said. Under PetroCaribe, Jamaica and other Caribbean countries benefit from preferential rates on crude oil, refined products, and LPG or its energy equivalent, from Venezuela. The payment arrangement allows for purchase of oil on market value for 40 per cent up-front, within 90 days. The remainder of the payment can be made over a period of 25 years with one per cent interest, provided that oil prices are above US$40 per barrel. – CMC Read more:
