On Tuesday October 2, 2012, Energy Minister Philip Paulwell, included in his statement to Parliament:
“………….. there is no delicate way to repeat this: Jamaica will not move forward with electricity rates of 40 US cents per kilowatt hour. For us to achieve competitiveness in the global economy, we must reduce this burden on our manufacturers, our businesses and our people.
File photo of the Caribbean Sea off Pedro Cays, Jamaica. A power solution that is gaining global popularity is linkage by undersea electrical cable and tapping into the natural resources of other countries.
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Mr. Speaker, it is my goal to oversee the reduction of electricity costs in Jamaica, to between 15 and 18 cents per kilowatt hour, a rate that will allow Jamaicans to build industry, create jobs, and be competitive………”
The Minister is spot on. He was successful in reducing prices in the telecom sector. Can he do it again? Very high energy prices, driven by rising oil prices, will irretrievably destroy the economy of Jamaica. Excessive energy rates will kill production, reduce job opportunities and contribute to security issues. Foreign investment can only thrive in a stable and predictable cost climate. Jamaica must find a sustainable methodology reduce energy expense by half. Note, too, that since GDP calculation includes the balance of trade, the more imports exceed exports the lower the GDP. If a significant quantity of fuel is removed from the trade deficit then GDP increases and perhaps, without lifting a straw, Jamaica could show increased positive growth.
Electricity generation employs machinery to convert a fuel to electricity. Given the volatility of the already high oil based fuel prices and the increasing difficulty in mining oil, the answer cannot be found in fossil fuels. The alternative, among known technologies, includes nuclear, hydro, wind, solar, geothermal or ocean surface waves. Jamaica may not have the proven potential to utilize any of these technologies in the near or short term to produce a sustainable electricity supply and the quick, simple solution is to import electricity from across the sea.
A power solution that is gaining global popularity is linkage by undersea electrical cable and tapping into natural resources of other countries. This technology has been in use for decades. Existing undersea cables include Germany-Sweden 260 km (160 mi); in Australia, Victoria to Tasmania 290km (180 mi); England to Netherlands 260km (160 mi); France to England; Eastonia to Finland; Italy to Greece; Japan to Japanese Islands; Denmark to Germany and Sweden and the NorNed cable connecting Norway to Netherlands 580 km (360 mi).
Noteworthy projects presently being studied include a 1,000 km 2,000 MW cable, in up to 2,000 meters water connecting Asia and Europe (Israel-Cyprus-Greece); Spain to France; Puerto Rico to the Virgin Islands; India to Sri Lanka; Norway to Germany 1,400 MW by 2018 and UK to Iceland. (Iceland produces about 30 per cent of the world’s geothermal energy.)
There is an obvious plan to link Europe’s electricity supplies to UK, North Africa and Iceland.and create and electrical “supergrid” to increase competitiveness and reduce prices. A similar approach exists in our region. In 1996 SIEPAC (Spanish for Central American Electrical Interconnection System) initiated an Interconnection Treaty signed by Panama, Honduras, Guatemala, Costa Rica, Nicaragua and El Salvador. Guatemala is already linked to Mexico and Colombia is linking to Panama – effectively interconnecting North and South America through Central America. (Mexico, Central America, and Colombia possess massive existing and potential hydro and geothermal energy. Mexico, Nicaragua, Costa Rica and El Salvador together produce over one-half the world’s geothermal energy. Colombia’s energy cost 9.75 cents per kWh compared to over 40-cents in Jamaica.) This region could have its own “supergrid” through connection from Mexico to Cuba to Florida and Cuba to Jamaica to Hispaniola to the Lesser Antilles to Venezuela and to the SIEPAC network.
Clearly, if at all possible, Jamaica’s solution is to interconnect with Latin America. A direct link from Colombia to Hispaniola is about 620 km (385 mi), to which Jamaica could connect through Haiti, has been studied but may not be feasible because of the water depth (over 3,000m). Another option would be to connect at Honduras or Nicaragua just over 650 km (400 mi) to the south-west with water depth no more than 460m (1200 ft). This is similar to the NorNed cable (currently the longest in the world) which measures 580m and is in 410 metres of water.
The NorNed business case (capacity 700 MW and completed cost US$800 million in 2007 – not far from what Jamaica spends on oil annually) expected annual income of $85-million. If one projects Jamaica electrical demand at 6-billion kWh, estimates the Jamaica cable cost to US$1-billion with expected income of $120-million, this equates to about 2-cents per kWh to bring power to Jamaica via the sea. An additional benefit is that the Latin American power is largely renewable or clean energy. Given electricity costs in Latin America, power landed in Jamaica would be about 12-cents. One must add local costs for transmission, distribution and supply and, of course, a cost for JPS to keep their equipment in readiness in case of a cable failure.
So, you see, one may not have to think too far out of the box (only 400 miles to the south west) to find a plausible solution to cut our electricity energy spending in half.
Robert Evans is an Engineer.
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