It was National Hero Norman Washington Manley who said that the mission of his generation was to achieve political independence. He further said that the mission of the next generation would be to achieve economic independence. But economic independence is clearly a harder task to achieve than political independence. And a main ingredient in the achievement of economic independence is in having independence in electricity.

In the days before the world oil crisis which began in December 1973, independence in electricity was not an issue as oil was cheap. But since that time there has been talk of having alternative sources of energy because of increasingly higher prices. The oil-producing countries then played their underselling game and Jamaica dropped its plans of creating alternative energy because of temporarily cheaper oil prices that sky-rocketed to very higher prices once the alternative energy plans were dropped.

In the 1990s the government of the day decided that our light and power company, the Jamaica Public Service, would be best divested to private people. Government could not manage JPS in such a way that there were not constant power cuts caused by breakdowns of the generators. But private owners are only interested in profit, which is one reason for higher prices. Another reason is the rising prices caused by the US Gulf War. From the 1990s the JPS has been using a certain amount of windmill energy. Then came 9/11 in 2001. The United States of America needed alternative sources of energy to fight their war in the Middle East as the oil available was not enough.

In any case, the available oil was being used by both sides of the war to fuel war planes and whatever else. As a result of all this, oil supplies dwindled and as a consequence oil prices went up. This has brought to the fore once again the argument for greater use of alternative energy, and more important its actual implementation to some extent. It is true that we may be stuck with JPS for many more years as suggested by the headline of Mark Wignall’s column on August 16.

But it does appear that despite all the obstacles listed in Wignall’s column, independence in electricity is slowly but surely coming. Already it is being done by using solar, windmill or a combination of both without going through the red tape, trauma and rigmarole and whatever other delays of attempting to share the grid with JPS. Indeed, solar panels on roofs of houses are becoming very common. Is it the JPS that has gone into solar energy with the street lights on the Highway leading into Portmore, St Catherine, or is it the foreign contractors? Incidentally, JPS also has some hydro-electric power plants and has always had them.

My interest in solar, hydro and windmill is partly out of concern for our political and economic independence and partly subjective. I am an asthmatic and am affected by the smoke from oil generators and also from coal energy – which is being marketed as safe for health due to improved technology, but I am not convinced. I am not really in favour of any source of energy that requires burning for its effectiveness.

And I am aware that in Jamaica, just about everyone has a relative who is asthmatic if they do not themselves suffer from the condition. In other words, “is nuff a wi”.

That aside, both coal and Liquid Natural Gas would be imported, if we went that route. So imported cheap coal as well as cheap LNG would lead to a similar dependence on outside supplies leading to the spending of precious foreign exchange.

I believe that coal and LNG are now cheap because the owners of such commodities are attracting buyers. But both might become expensive if we are put in a position where we cannot do without it because we have nothing else. Indeed, I believe that it is the age-old game of undersell, put the competitor out of business and then jack up the price afterwards.

But to politicians, cheaper electricity translates into more votes at election time. Energy minister Phillip Paulwell promotes cheaper energy, even if it is more hazardous and even if it encourages dependency. But has anyone in the People’s National Party guessed that by the time election comes around the cheap coal and cheap LNG may skyrocket to the point where the voters swing away from the PNP? Or is there a plan by Prime Minister Portia Simpson Miller to call a snap election the minute the electricity prices fall?

Our aim should be to avoid any form of energy that increases dependency and detrimental to health. We should instead be looking towards complete independence in electricity, even if the capital outlay in its initial years is costly, especially with regard to solar energy. And with all the hurdles listed by Mark Wignall, the quicker we move on this the better. To our credit, we have started already.

ekrubm765@yahoo.com

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One of the devices found inside a ceiling.

THE Jamaica Public Service Company (JPS) is reporting an increase in the discovery of sophisticated meter bypass devices used in the illegal abstraction of electricity.

This while the company continues to carry out regular investigations to clamp down on the activity.

Just last week, investigations in separate locations, including the Corporate Area and St Catherine, led to the discovery of sophisticated bypass devices hidden in various parts of houses, including ceilings and kitchen enclosures, the utility said.

Meanwhile, teams from the utility who were operating in sections of Waterhouse, St Andrew, last Thursday, discovered 17 irregularities and removed 84

TREVOR Heaven, president of the Jamaica Gasolene Retailers’ Association (JGRA), has said that service stations will be revamping their operations in a bid to save the sector from extinction.

“We are facing an unprecedented financial challenge,” he told Auto. “At this point, there are four stations in the Corporate Area that are already closed. These are the Total service stations in Harbour View, Half-Way-Tree, shortwood, and Red Hills.”

HEAVEN… four stations in the Corporate Area are now closed

“I intend to seek audience with the management of the French-owned Total Jamaica to see how we can best resolve the issue,” he said.

When contacted, Paula Duncan, HR manager for Total Jamaica, said she could not comment as the company’s managing director, Dr Michael Faulkner, was off the island.

However, the JGRA president said he has been advised that another two service stations in St Catherine and one in Manchester were on the verge of closure, but refused to name the brands.

Heaven, who met with retailers at the JGRA’s Constant Spring Road headquarters on Wednesday, attributed the current downturn in the gasolene retail business to high operational costs, shrinkage due to temperature changes, reduced gross income (low margins and reduced throughput) and increased bank and credit card charges.

The JGRA president said a raft of new measures would have to be implemented.

“We’ll be moving away from full service to self service. We’ll will have discussions with the unions to see how best we can transition,” he said. “While we [the dealers] develop other income streams, we can divert our employees into other areas of activities rather than dislocate them.”

Heaven said dealers would discontinue accepting Master Cards and Visa Cards at service stations as the bank charges are sometimes greater than the profits made.

“Only the NCB Key Card and debit cards will be accepted,” he said.

Heaven said he would also be seeking a meeting with Dr Peter Phillips, minister of finance, planning and the public service, as well as Anthony Hylton, minister of industry, investment and commerce, regarding an amendment to the Weights and Measurement Regulation.

The JGRA comprises 160 members and celebrated its 61st anniversary in April, 2012.

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At the risk of revocation of poetic license, allow the liberty to suggest that Shakespeare’s Hamlet, faced with Jamaica’s high energy charges, would have voiced his soliloquy thus:

“To conserve, or to produce: that is the question:

Work crews from Turning Mill Energy install 245-watt solar panels from the ET energy company, made in China, in West Barnstable, Massachusetts (Photo: AP)

Whether ’tis more arduous on the pocket to suffer

The slings and arrows of outrageous energy bills,

Or to produce from the abundance of sun and wind,

And, by such deed, oppose the tide of oil importation?”

A simple example will explain. If your energy consumption was 500KWh (kilo-Watt Hours) per month (equal to about 42 barrels of oil over five years) and a cost of about $220,000 annually and if, somehow, you had access to a facility of up to $1.5 million to resolve this, what are your options?

A renewable energy system (RE) – solar panels and/or wind turbine using the full $1.5 million could be installed. Or, for about $450,000, the solution could be energy conservation measures (EC) such as changing out bulbs to LEDs, tinting windows, photo cell switches, insulating the roof, use of inverter technology for fridges air-conditioners and practicing stringent energy management etc. If the strictest EC measures are adopted up to 175KWh per month may be saved and so, after expenditure on EC, there would still be an annual electricity bill of about $145,000 for 325KWh (27 barrels of oil over five years) saving $75,000 annually. This is a best case (or wishful thinking) scenario which assumes flat or stable oil prices over the next five years

At the end of EC however, your electricity bill may only be reduced by 35 per cent and so, when you take the inflation in energy charges into account, you may have saved some oil but you could be back to square one financially!

Conservation may not therefore be the answer and so consideration must be given to another option to answer the question “to produce or to conserve”? As it is in so many instances in life, the answer is in the grey area – neither EC nor RE but a combination of both.

If, after EC, consumption is reduced from 500KWh to 325KWh then install a 325KWh RE system and use a portion of the annual savings to carry out the EC measures – a combined approach. An achievable target could be to reduce consumption by an average of about 44KWh annually over five years after commissioning your RE system. Nothing would be done to attract expenditure until the end of the first year after accumulating the savings in electricity bills and the expensive EC measures would be accomplished over years two to five.

After one year the consumption would be reduced from 500KWh to 455KWh. After two years consumption is reduced from 455KWh to 410 KWh while production remains at 325KWh. At the end of five years consumption equals production. At the end of year one, savings is about $140,000 and this increases annually until the end of the fifth year when the electricity bill becomes zero and $220,000 is saved that year and afterwards. In five years the energy rates would have increased and the savings would be more in dollars and cents. Oil used by this combined approach would be about 7 barrels compared to about 27 barrels if only EC were employed but after 5 years of RE plus EC no oil would be used at all!

Excellent from the economic viewpoint but the financial reality is that, the combined approach demands repayment for the $1,500,000 capital cost of the RE system. At the most concessionary rate over 10 years this would be near $192,000/year. Therefore, for the first three to four years (depending on how much energy cost increases), the monthly repayment for the RE system plus energy charges from the electricity provider would significantly exceed the original electricity charge. This reason is that after five years the savings in electricity bills would be about $900,000 of which about one-half would have been expended in EC measures leaving only $450,000 to pay the $960,000 finance charges. But this does not mean that RE is not financially feasible!

Now, if EC only were employed the expenditure would only be about $450,000 which, under the above conditions would attract a finance charge of under $60,000 annually against saving $75,000 each year. Financially feasible but there is still the question of the continued use of oil.

This is a classic case for government intervention – brilliant economic gains (including oil savings and carbon credits) but significant negative financial consequences if attempted under conventional banking practices. The solution is a combination of creative, out-of-the-box initiatives including bulk purchases by the Government and loans with a two to three year moratorium ideally from the petrocaribe fund which appears to have been set up for just such a situation.

And so, back to the revised Hamlet, who, in his time, only appeared to have bigger problems because he was not faced with Jamaica’s high energy charges. Be not be inspired by what he was talking to himself about however, as a means to escape expensive energy regimen.

“Thus independence does make heroes of us all;

And thus the self-generation revolution

Is strengthened with creative thought,

And enterprises of great pith and moment

Will flourish throughout the land

And doff the yolk of fossil oppressors.

Be all their sins remember’d.”

Robert Evans is a practicing engineer.

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TREVOR Heaven, president of the Jamaica Gasolene Retailers’ Association (JGRA), has said that service stations will be revamping their operations in a bid to save the sector from extinction.

“We are facing an unprecedented financial challenge,” he told Auto. “At this point, there are four stations in the Corporate Area that are already closed. These are the Total service stations in Harbour View, Half-Way-Tree, shortwood, and Red Hills.”

HEAVEN… four stations in the Corporate Area are now closed

“I intend to seek audience with the management of the French-owned Total Jamaica to see how we can best resolve the issue,” he said.

When contacted, Paula Duncan, HR manager for Total Jamaica, said she could not comment as the company’s managing director, Dr Michael Faulkner, was off the island.

However, the JGRA president said he has been advised that another two service stations in St Catherine and one in Manchester were on the verge of closure, but refused to name the brands.

Heaven, who met with retailers at the JGRA’s Constant Spring Road headquarters on Wednesday, attributed the current downturn in the gasolene retail business to high operational costs, shrinkage due to temperature changes, reduced gross income (low margins and reduced throughput) and increased bank and credit card charges.

The JGRA president said a raft of new measures would have to be implemented.

“We’ll be moving away from full service to self service. We’ll will have discussions with the unions to see how best we can transition,” he said. “While we [the dealers] develop other income streams, we can divert our employees into other areas of activities rather than dislocate them.”

Heaven said dealers would discontinue accepting Master Cards and Visa Cards at service stations as the bank charges are sometimes greater than the profits made.

“Only the NCB Key Card and debit cards will be accepted,” he said.

Heaven said he would also be seeking a meeting with Dr Peter Phillips, minister of finance, planning and the public service, as well as Anthony Hylton, minister of industry, investment and commerce, regarding an amendment to the Weights and Measurement Regulation.

The JGRA comprises 160 members and celebrated its 61st anniversary in April, 2012.

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JAMAICA won’t grow unless its energy cost is halved within three years, by Chris Zacca’s reckoning.

The Private Sector Organisation of Jamaica (PSOJ) head aims to push national energy policy in this direction.

Chris Zacca

“We are strengthening our energy committee at the PSOJ, and I will chair the new committee,” he said. “The PSOJ will need to play a mediating role in bringing all the parties together on this issue to forge an indivisible national consensus and strong action.”

Zacca believes that lack of economic growth reflects a failure of national leadership, and not just politically.

“We at the PSOJ must critically reflect on our motto Free Enterprise and Watch Jamaica Grow,” he said, while questioning why the lobby group has not succeeded in making our motto a reality.

“This reflection must consider whether the private sector itself has not been united,” Zacca told an audience attending the panel discussion at the SALISES Fifty-Fifty conference at the Pegasus hotel on Monday.

He also questioned whether some sectorial lobby groups have been pushing their agendas over national interest.

“Has this contributed to an economy where there are painfully few examples of Jamaican entrepreneurship?” he asked.

His response: “I think so”.

Zacca proposed major steps that the group would take towards a comprehensive approach to national development, starting with efforts to unite the lobby groups towards this end.

“Once united, we need to partner with the Government and civil society to promote the creation of a policy framework that enables competiveness and productivity, and a business-friendly environment,” he said. “On this front I am happy to say that the Honourable Prime Minister has told me that she intends to restart the Partnership discussions between Government, the Private Sector and Civil Society.”

Other thrusts will be focused on reducing the ABCs of bad governance

REALITY check 101. Our conquests at the Olympics are behind us and the economy is close to a flat line. This means that about eight months ago patient Jamaica changed hospitals, and although the patient is still ailing and complaining of even greater pain than before, the doctor cannot say if the patient is likely to get better.

Relatives and friends have been badgering the medical officer in charge to level with them. “Listen,” states the doctor as he attempts to rush away from them. “The patient is still alive, but take heart that he is not dead. We know what is wrong with him, but with the medication that we have available and have given him, he doesn’t seem to be responding positively to it.”

Head office of the JPS in Kingston

“What can we do?” ask the relatives.

“First, pay the amount outstanding for the many months that he has been here. Without that, we cannot administer the needed medication,” says the doctor.

“But doctor, we are willing to pay, but what guarantee do we have that you will be able to source the medication, if we do pay?”

The doctor pauses and turns to stare them in the face. “Why don’t you try to get a loan? The hospital has been trying for eight months now to negotiate its own loan, but so far, we do not know whether we are coming or going.”

The hospital has just built a multi-million dollar wing called Consultants’ block. The equipment there is state-of-the-art but the beds are empty. The doctor bids them goodbye and walks away whistling. His swanky new 2013 Audi is parked outside. The relatives head outside to take their chances with public transportation.

It is accepted that if Jamaica is unable to solve its problems of high energy costs, we will be forever in the hospital. We cannot trade on fairly equal footing with our partners in the region, and outside where energy rates are even cheaper, it is a losing game.

A friend from my days at KC, an electrical engineer living and working in Canada, attempted to explain to me some of the realities that would face any other player who would want to compete with JPS under the “rules” that are likely to be implemented in the wake of the much publicised CURE victory in the courts.

Said he, “It is not feasible or necessary for the competition to install a separate Transmission and Distribution (T&D) network. But they may be required to do the necessary upgrade to the existing system at the injection point from the new generation station. A systems analysis would be required to determine this upgrade, most likely in collaboration with JPS. This most likely would result in:

“(1) Higher capacity transformers, circuit breakers and power lines on the existing sections of the grid to cope with the new fault current levels associated with the increased generation as the systems analysis determined.

“(2) A metering and synchronising scheme to measure the amount of power injected and allow connection unto the existing grid.

“(3) Devices and equipment to detect, isolate and protect both systems in case of faults.

“A reliability benefit would also accrue since the new generation would allow flexibility to split the system and supply customers in the area of the new generators.

An operating protocol would have to be determined, perhaps by OUR, as to which entity is the principal power supplier with respect to varying customer demands and other aspects of operating the expanded grid. For example, when demand is low, who gets to sell power? How is the maintenance cost for the grid shared? How are the T & D losses shared? The fuel supply to the new entity?

“If this ruling stands, it may be quite some time before it can be effected on the ground.”

The CURE victory which determined that JPS’s sole source of electric power (monopoly) licence was illegal has generated much emotional heat but little light.

Let us assume that the government is able to negotiate, by purchase, ownership of the distribution network (poles, lines), what happens next?

If we accept, for example, that the grid will be split in two to accommodate the entity competing with JPS, who decides which section is held by JPS and which part is leased to the competition?

It is accepted that the market is stable at less than 600,000 customers. If, as my engineer friend states, the new player would want to install, in addition to new generation, new and improved lines and transformers at the outset, would that new entity not want to recover on its capital outlay as quickly as possible? Under such a scenario, it is possible that JPS, at its section of the grid, could undersell the new entrant and force it to close down. In time, it would be forced to sell to JPS, and we would be back at the proverbial square one.

In public discourse it sounds politically correct to speak of a multiplicity of smaller players competing with JPS, but as we examine the mechanics of setting up these systems, some harsh realities begin to stare us in the face. It is not a simple matter of just dropping a generating system in, say, Manchester, and after disconnecting a certain section from JPS, plugging into the new system of lines. Upgrades will have to be made and the capital outlay will be significant.

JPS has an advantage in that the present system is ancient and JPS is best able to operate that old system. A new player or new players will step in with modern equipment and that will force them to outfit the system with new transformers and lines.

Are the Jamaican consumers prepared to deal with the unpleasant permutations that could arise? Much more needs to be fleshed out on this matter which has so far generated considerably more heat than light.

observemark@gmail.com

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Gary Barrow -File
Gary Barrow -File

Gary Barrow will join the Jamaica Public Service Company (JPS) on September 3 as a senior vice-president in charge of customer operations and support services.

Barrow was once the president of telecom LIME Jamaica, when it traded under its old name, Cable & Wireless Jamaica.

His track record, however, spans other disciplines, including finance, business transformation, government relations, power systems and process re-engineering, said JPS.

Barrow’s appointment comes as JPS is attempting to re-engage Jamaicans and put some polish on its tarnished image. Jamaicans are upset at the more than 40 US cents they are paying to consume power provided by the monopoly distributor.

JPS President Kelly Tomblin is shooting for “a total transformation” of JPS culture.

In that vein, Barrow will have “overall responsibility for transmission, distribution and our parish operations, and so will play a key role in helping to change the way we serve our customers. Gary’s extensive leadership experience, along with his track record of successful business transformation, will definitely be an asset during the culture change process at JPS,” Tomlin said.

business@gleanerjm.com

http://jamaica-gleaner.com/gleaner/20120822/business/business3.html