Whatever else might have been the relevance of Venezuela‘s presidential election to Jamaica, the most immediate concern for Kingston was the future of the PetroCaribe energy agreement.
It is little wonder, therefore, that our Government – particularly the energy minister, Mr Phillip Paulwell – has hardly masked its glee at President
It is high time the Simpson Miller administration end the pussyfooting and come clean on the liquefied natural gas (LNG) project. For its policy-by-dribble is both confusing and confidence-draining and risks doing grave damage to the Jamaican economy. First, let us place things into perspective. It is our view that alongside credible fiscal policies – which, hopefully, are being sorted out in current negotiations with the International Monetary Fund (IMF) – energy is the potential economic game-changer for Jamaica. With the domestic price of electricity at upwards of US$0.41 per kilowatt-hour, Jamaican firms are difficultly placed to effectively compete with hemispheric and global manufacturers and service providers. Indeed, the higher price of energy has been a significant contributor to this country’s long period of anaemic advance in GDP. A substantial part of our problem, of course, is that the bulk of our electricity is generated by old, inefficient power plants that burn expensive oil. Changing the fuel mix, therefore, is a critical component towards reducing the cost of domestic energy. Settled on natural gas For more than a decade, Jamaican administrations have deliberated on the issue and appeared, in the end, to settle on natural gas as the fuel of choice. It is largely against this backdrop that the former Jamaica Labour Party administration, after a badly compromised initial tender process that it was forced to overturn, called for new bids for an LNG storage and regasification facility to begin to give effect to the fuel-conversion programme. Months ago, it was announced that Samsung was the preferred bidder for that facility. Previously, the Jamaica Public Service Company, an electricity generator and monopoly distributor of power, won the bid to establish a natural gas-burning, 480-megawatt power plant. The expectation was that with natural gas and enhanced efficiency, this facility would drive down the cost of power by a third – not sufficient, but a start. This newspaper has always felt, and argued, that coal, and other fuels, ought to be part of the energy mix. Our primary concern is for the delivery of the cheapest power to afford the economy a fighting chance at competitiveness. At the same time, we want to be assured of a predictability of supply, starting with the fuel. Project could be sidelined Unfortunately, the Government‘s poor communications strategy is injecting grave uncertainty and potential partisan rancour into the discourse. Dr Carlton Davis, the highly respected public servant who heads the Government’s energy task force, had hinted that the LNG project could be sidelined if the Samsung bid did not meet specific price points for the delivery of electricity. It has for weeks been leaking out that those price points, whatever they were, have not been met and that LNG might be abandoned. What, precisely, this means remains unclear. We would, for instance, wish to be told frankly whether Jamaica can find no supplier of LNG – the price of which has risen on the back of demand in Asia despite the collapse of the price of natural gas in North America – at a cost that makes sense. Or whether it is other elements of the pricing of the project that don’t compute, and which party they relate to. Or, perhaps there is another approach to the project, including a mix with other fuels. Uncertainty, ultimately, breeds apathy. 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. Read more: JAMAICA is blessed to be refreshed and cooled all year by winds mostly coming in from the Caribbean Sea. Yet we make virtually no use of the potential for wind generated energy. Today, Jamaica gets 95 per cent of its energy from imported oil and 0.1 per cent from wind. Wind-generated energy accounts for less than charcoal and fuel-wood, which account respectively for 0.6 per cent and 1.9 per cent. Solar energy our most abundant and inexhaustible energy source provides mostly hot water in some hotels, hospitals and private homes. Solar energy helps in a small way to save on electricity and imported oil. This is almost exactly where the country was when the first oil crisis of the early 1970s tripled the bill for imported oil in a one-year period, terminating the economic growth of the 1960s and igniting the implosion of the Jamaican economy from which it has never recovered. The need to finance the oil import bill which kept escalating with each rapacious increase by the merciless oil producers is the root cause of our external debt. Given the dependence on oil and the cost to the economy it was reasonable to expect all the Governments since the mid 1970s to make reducing dependence on oil a priority. If diversification from oil to alternative energy sources was a priority, nothing meaningful has been done about it. We contend that the objective of developing alternative energy sources has never been seriously and consistently pursued. The explanation for this manifest failure lies in the willingness for self-delusion by means of hoped-for panaceas. The first panacea was that there is oil and/or gas in the offshore waters of Jamaica. This figment of optimistic geologists has made the rounds several times. Next panacea was coal, which is plentiful and relatively cheap from many sources across the world. This has been mooted ad nauseam with a different proposed supplier each time ranging from Colombia to China. The latest miracle solution is LNG which members of the Portia Simpson Miller Administration seem disagree on in their public statements. While we are waiting to get to the long Promised Land, Jamaica must move aggressively on two alternative sources of energy which are local and inexhaustible. These are solar and wind; with the former as a means of saving on imported oil and the latter as a means of reducing dependence on oil and reducing the cost of generating electricity. No one disagrees that lower electricity costs would be good for consumers, producers and exporters. To date, Jamaica has developed only one of several coastal sites suitable for wind-generated energy. This successful Wigton Windfarm is a wholly-owned subsidiary of the Petroleum Corporation of Jamaica located in Manchester, a parish with two other suitable but undeveloped sites. We suggested that the Members of Parliament give up generating hot air in Gordon House and take a trip in a single bus (avoid 63 SUVs making the trip), tour the Wigton Windfarm and learn what the cool breeze of the Caribbean can do. If they understand the benefits of wind we will, hopefully, have less hot air on energy, less energy devoted to ventilating and more energy put into implementation. Jamaica is a land with limited wood and water, but it is a land of unlimited wind and sun. The cool breeze and the warm sun are not just there for tourists.
Read more: Kelly Tomblin, the new CEO of the Jamaica Public Service Company (JPS), the light and power company, has started well. Rather, in her first interview with this newspaper, she was soothing. But neither empathy nor intent to soften the hardened image of the JPS will be enough. If JPS is to be a player in Jamaica’s energy future, it has to be fully engaged in efforts for the efficient delivery of power to customers, which will require it to be a vastly more efficient operation. Put another way, it just won’t do for the JPS to use two barrels of oil equivalent to generate the electricity to light a simple 100-watt incandescent bulb for a year. Nor can it be tolerated that more than 70 per cent of the fuel, mostly expensive oil, it consumes goes to waste, producing nothing. Indeed, JPS has to convince Jamaicans that it can, and will, be a serious contributor to efforts to slash the price of electricity from around US$0.41 per kilowatt-hour to the US$0.10-US$0.15 required for the Jamaican economy to have a reasonable chance of competing with its neighbours. In this regard, the contribution of the Energy Think Tank at the University of the West Indies, Mona, to the energy debate, by making the issue accessible to most people – such as with the light bulb example – is important. The group bases its conclusion on the fact that the value of a barrel of oil equivalent is 1.7 megawatt hours, or 1,700 kilowatt-hours (kWh). A 100-watt incandescent bulb, burning continuously for 365 days, or 8,760 hours, would consume 876 kilowatt-hours, or 51 per cent of the electricity output of a barrel of oil equivalent. But at the rate at which JPS converts its fuel to electricity, the company gets only 35 per cent of its energy value. Old equipment and other inefficiencies mean that 65 per cent goes up in smoke – literally. Rethink both cost and technology Of the electricity generated by the little more than one-third of a barrel of oil that is actually converted to power, 23 per cent is lost in transmission and distribution, a combination of technical loss and consumer theft. So, only 27 per cent of the potential energy from a barrel of oil burned by JPS reaches its consumers, or, in this case, the Energy Think Tank’s 100-watt bulb. That’s untenable! We note Ms Tomblin’s allusion to the 360-megawatt gas-fired plant that JPS won a tender to install, which promises to cut the cost of electricity by a third. That is a start, but hardly the full solution to an energy-competitive Jamaican economy. For while fuel type is critical, it is not the only issue relevant to the delivery of competitive power in Jamaica. Plant technology, for instance, will be important, as well its financing cost. These matters need to be fully and honestly ventilated – from all angles. So, too, must be the matter of competition. On the latter point, given her assertion about the inefficacy of multiple grids in small countries, we suppose that Ms Tomblin has not yet been fully briefed on the competition model for transmission and distribution floated by the Government. We look forward to an informed discourse, but urgent action. http://jamaica-gleaner.com/gleaner/20120425/cleisure/cleisure1.html