JAMAICA continues to agonise over the cost of electricity and the capacity to pay for its oil imports. This agony started with the first oil price shock in 1973 and the degree of agony has varied with the ebb and flow of oil prices. The country is in the throes of trying to reduce the cost of electricity and the oil import bill.
Much attention is now being devoted to finalising the outcome of the bidding process for an additional 360-megawatt (MW) of electricity at the most competitive price. The Office of Utilities Regulation (OUR) is being lambasted over its handling of the selection of the “best” bidder to undertake the construction of a 360MW-generating power plant to provide additional generating capacity to the national grid. The heightened anxiety is also due to the impending changes in the terms of PetroCaribe, an eventuality that should have been anticipated and prepared for.
Meanwhile, the productive sector continues to be stymied by the high cost of electricity and households are impoverished by their electricity bills. Jamaica has a very high price of electricity at 0.26 USD/kW h, which puts the economy at a substantial disadvantage in being internationally competitive. The cost of electricity has contributed to the deindustrialisation of the country, which is most evident in the manufacturing industry.
Jamaica has a peak daily demand of approximately 600 MW, which is provided through a number of steam and combustion gas turbine plants as well as a few small hydro plants. The Jamaica Public Service Company (JPS) has been the main supplier until fairly recently. About 25 per cent of this generating capacity (197 MW) is supplied by non-JPS sources. JPS has an exclusive franchise on transmission, distribution and retail supply. Almost half the generation capacity is over 30 years old and transmission losses are estimated at 23 per cent.
The real problem is not the JPS, the OUR or rapacious oil-exporting countries. It is the absence of a national energy policy aimed at lowering the cost of electricity by a combination of less expensive alternatives to oil and an increased reliance on renewable energy sources such as solar and wind.
The cost of oil imports during the last 40 years has had little success in prompting the exploration of alternative energy solutions in Jamaica, unlike many other countries for example Germany where solar and wind account for 22 per cent of electricity generation. Wind and solar contributed an insignificant amount of our energy needs despite its potential. In 1995, the PCJ was mandated to develop indigenous renewable energy resources. The Petroleum Corporation of Jamaica (PCJ) established a wholly-owned subsidiary, Wigton Wind Farm Limited (Wigton) in 2000. Wigton is the first commercial wind farm. Electricity purchase agreements allow Wigton to sell electricity to JPS. Solar sources have the potential to save on oil imports but not enough homes and business establishments have installed capacity. This is inexplicable because falling prices have made solar power competitive with conventional sources of energy. In the 1970s solar panels converted sunlight into electricity at a cost of US$70 a watt, but today that figure is less than 80 cents.
Jamaica’s energy crisis is an indisputable failure of successive governments of both political parties. The Jamaican people have paid a high price for this incompetence and mismanagement with little prospect for change for the better.
Kelly Tomblin, CEO of the JPS.
AS THE Office of Utilities Regulation (OUR) opened bids yesterday for the much-anticipated 360-megawatt electricity-generating project, it was revealed that three major companies have joined forces seeking to become the preferred bidder.
And in a late development yesterday, the Jamaica Public Service Company (JPS) said it will be partnering with three local entities in response to the OUR’s request for proposals for the procurement of new baseload generating capacity.
“While JPS is not submitting an independent bid, we are pleased to partner with other bidders to ensure that new power generation is added to the grid. We also plan to work with our partners to continue to bring much-needed fuel diversity to Jamaica,” said Kelly Tomblin, JPS president and CEO.
In its news release yesterday, the JPS did not specify the companies that it would be partnering with, but only three entities have established a limited-liability company, called Energised Jamaica Limited, to bid for the project. The companies are Amourview Holdings Limited, Tank-Weld, and Mussons Jamaica Limited.
Energised Jamaica Limited is proposing to establish a 360-megawatt dual-fuel selective-cycle reciprocating power-generation plant, using number-six heavy fuel oil and natural gas. If successful, the company will be spending US$586.7 million to set up the plant.
Nigel Davy of Energised Jamaica Limited told
Kelly Tomblin, CEO of the JPS.
AS THE Office of Utilities Regulation (OUR) opened bids yesterday for the much-anticipated 360-megawatt electricity-generating project, it was revealed that three major companies have joined forces seeking to become the preferred bidder.
And in a late development yesterday, the Jamaica Public Service Company (JPS) said it will be partnering with three local entities in response to the OUR’s request for proposals for the procurement of new baseload generating capacity.
“While JPS is not submitting an independent bid, we are pleased to partner with other bidders to ensure that new power generation is added to the grid. We also plan to work with our partners to continue to bring much-needed fuel diversity to Jamaica,” said Kelly Tomblin, JPS president and CEO.
In its news release yesterday, the JPS did not specify the companies that it would be partnering with, but only three entities have established a limited-liability company, called Energised Jamaica Limited, to bid for the project. The companies are Amourview Holdings Limited, Tank-Weld, and Mussons Jamaica Limited.
Energised Jamaica Limited is proposing to establish a 360-megawatt dual-fuel selective-cycle reciprocating power-generation plant, using number-six heavy fuel oil and natural gas. If successful, the company will be spending US$586.7 million to set up the plant.
Nigel Davy of Energised Jamaica Limited told
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.
The demo kit containing an A/C motor, two kilowatt meters and the green box.
THE need for lower electricity bills and a cheaper alternative to solar.
Those, primarily, were what led Mark Neita and business partner Dr Matthew Bird to the green box technology and to found Green Box Jamaica.
KINGSTON, Jamaica — Eleven people, including three women, were arrested by the police for illegal abstraction of electricity in Clarendon early Tuesday morning.
Jamaica Public Service Company (JPS) crews assisted by the security personnel pulled down 120 throw-up connections during the operation.
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Those arrested are from the Clarendon communities of Lionel Town, Sedge Pond and the