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Tag: Portia Simpson Miller

SolarBuzz Jamaica > Blog Classic > Portia Simpson Miller
Government JPS LNG News Oil

Dumped! Government to throw out LNG project

September 24, 2012

Prime Minister Portia Simpson Miller and Energy Minister Phillip Paulwell.-file
Prime Minister Portia Simpson Miller and Energy Minister Phillip Paulwell.-file

Lower light bills not coming anytime soon

Arthur Hall, Senior News Editor

The Sunday Gleaner has now confirmed that the Portia Simpson Miller-led administration will announce plans to abandon its long-stated intention to introduce liquefied natural gas (LNG).

After years of planning and millions of dollars in expenditure, the Simpson Miller administration has decided that it just cannot afford the cost of setting up the infrastructure and other requirements for the introduction of LNG.

Energy Minister Phillip Paulwell is scheduled to make that announcement early next month, but government sources say a new plan could be announced at that time as Paulwell continues his desperate push to reduce electricity bills.

“I can say that the numbers are not adding up,” a government source told The Sunday Gleaner late last week.

“As you would have suspected, we knew this was a likely outcome for some time now and had begun to support the offtakers (electricity and alumina producers) to rev up plans ‘B’ and ‘C’, and they are so doing,” added the source who asked that his name be withheld.

It is expected that plans ‘B’ and ‘C’ would see the Jamaica Public Service Company (JPS) being allowed to establish the LNG infrastructure and source the gas for the multibillion-dollar plant it plans to construct in Old Harbour, St Catherine.

The JPS would also sell LNG to the alumina producers which have long argued that the high price of electricity in Jamaica makes production uncompetitive.

“We have long told the Government that the introduction of LNG should be private sector-driven, but the People’s National Party administration before it lost the 2007 general election was adamant that it should be state-controlled and the Bruce Golding-led Jamaica Labour Party government followed that path,” said a source in the energy sector last week.

“If this was a private sector-led drive, EXMAR would have started construction in 2009 and, by this year or early next year, the country would have LNG and lower electricity bills,” added the source who asked not to be named.

Last year, The Gleaner first reported that a November 2010 report by a World Bank-recommended team of consultants suggested that the Government put on hold its plan to introduce LNG.

uncertainty with project

At the time, the consultants stated that there was ambiguity and uncertainties surrounding several aspects of the project which could make it a financial disaster for the Government.

According to the consultants, a focused economic and financial feasibility study should be completed quickly before a final design specification for the Floating Storage and Regasification Unit and pipeline system.

The consultants also warned that the Government could be exposed to great financial risk for future gas purchase.

But then Energy Minister James Robertson and members of the LNG Steering Team scoffed at the consultants’ report as they responded to the queries.

“That (consultants’) assessment report raised several valid questions of the project, for which comprehensive answers were provided,” Robertson told The Gleaner at the time.

Alternative Energy LNG News Oil

Energy: Cool wind and warm sun not just for tourists

September 14, 2012

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.

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Alternative Energy Government JPS LNG News Oil

Towards independence in electricity

August 30, 2012

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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News Oil

Forget Competition, Implement Better Electricity Regulations

August 20, 2012

THE EDITOR, Sir:

As a lifetime student of economics, I hasten to agree with Dr Carlton Davis that the size of the market for the consumption of electricity is too small for competition, and if there is going to be a second supplier, that supplier would have to satisfy the authorities of the viability of more than one supplier. What I think the public needs is the authorities to provide proper safeguards against injustice being meted out to it by any supplier.

I do not, however, agree that Dr Davis, as adviser to the Government, should have made his opinion public, while the relevant minister seems to think that competition is a perfect fit in this case, and perhaps in every case, and seems to forget all decisions must be in the best interest of the people.

In this case, it cannot be in the best interest of the people if because of competition, rivals become bankrupt and the people have no electricity.

Energy Minister Phillip Paulwell, we need some critical thinking here, for which you are well known. Mind you, I think you have always been a great minister, but you are wrong this time, because to err is human and so, you deserve forgiveness.

OWEN S. CROSBIE

oss@cwjamaica.com

Mandeville, Manchester

http://jamaica-gleaner.com/gleaner/20120818/letters/letters9.html

JPS News

EDITORIAL – Fumbling The Energy Run

August 17, 2012

 

There is never uncertainty when Shelly-Ann Fraser-Pryce rockets from the blocks in a 100-metre dash. Usain Bolt and Yohan Blake may get off a bit behind the competition, but they accelerate with such command that the prize is usually theirs.

The same, unfortunately, cannot be said for how the Jamaican Government manages the country’s affairs, exemplified this week by the confusion over energy policy.

Energy Minister Phillip Paulwell had long since declared his Government’s intention to break the monopoly in transmission and distribution (T&D) of electricity. That seemed to be settled policy. On Tuesday, Mr Paulwell was contradicted by Dr Carlton Davis, a senior adviser to Prime Minister Portia Simpson Miller. He favours a “regulated monopoly” and suggests that Mr Paulwell’s pronouncements were, for the Government, not conclusive.

Then, Prime Minister Portia Simpson Miller tiptoed between the raindrops. The upshot continued, if not deepened, uncertainty.

PROHIBITIVE COST

The policy tug of war might have been considered just another bit of Jamaican political theatre, but the fact is that the issue at hand is of great importance and urgency. There is clear consensus that, bad economic management apart, the high cost of electricity is the greatest constraint to the competitiveness of Jamaican firms and to growth in output.

Jamaicans pay upwards of US$0.40 per kilowatt-hour (kWh) of electricity, higher than the rate in most of its regional economic competitors. Policymakers have talked much, over many years, about strategies to reduce the cost of energy. They have achieved little.

Recently, though, we appeared to have been getting somewhere, with a plan to shift from expensive oil to cheaper fuels to generate power. The idea is to start with natural gas, although coal remains in the mix.

Several months ago, the Jamaica Public Service Company (JPS), the light and power provider, and its owners won a bid to establish a 360-megawatt power plant that is to be fired by natural gas. The Government is also about to rule on bids for a liquefied natural gas storage and regasification facility.

The projection is that using cheaper natural gas to fire this power plant, combined with its greater efficiency, will lead to a reduction in the cost of electricity of between 30 per cent and 40 per cent.

Paulwell’S AMBITIOuS TARGETS

At the same time, Mr Paulwell has been loudly promoting the break-up of the JPS’s monopoly on the grid, arguing that this could deliver the 60 per cent drop in the price of power that he has set as his benchmark.

The minister’s critics, however, argue that the energy minister’s focus on the power company’s T&D monopoly has introduced uncertainty into its operations – exacerbated by a recent court ruling against the exclusivity of the JPS’s operating licence – especially with the company being in the market for capital to finance the gas-fired plant.

The attention, critics feel, should be on fuel choice. Dr Davis agrees. He believes that Jamaica’s electricity market, with peak demand for under 700 megawatts, is too small for a competitive free-for-all.

The statement from the prime minister’s office acknowledges the market uncertainty engendered by the liberalisation debate and the need for continuity “in the short run”. But it makes no policy commitment.

We wonder what would have been the result of Jamaica’s record run in the men’s 4x100m relay at the Olympics if there was such uncertainty in the team.

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.

http://jamaica-gleaner.com/gleaner/20120817/cleisure/cleisure1.html


News

EDITORIAL – Mair Getting It Right On Energy

August 2, 2012

On the matter of energy, Gregory Mair has hit upon the right idea. Jamaica should be catholic in its approach.

We should not rule anything out, including, Mr Mair told fellow legislators last week, nuclear energy.

That last point is bound to be controversial, as it was three years ago when the Jamaica Labour Party (JLP), of which Mr Mair is a member, formed the Government and the case for nuclear energy was being pushed by the then Opposition. The suggestion was knocked down by then prime minister, Mr Bruce Golding.

The then proponents of nuclear power, Mr Phillip Paulwell and Mrs Portia Simpson Miller, are now, respectively, the minister of energy and prime minister.

They, clearly, are in a position to reopen and expand the debate. But, more important, Mrs Simpson Miller and Mr Paulwell bring urgency to the process of implementing a mix of available and cost-effective measures to deal with Jamaica’s energy crisis.

Indeed, the Government’s fiscal constraints apart, the cost of energy is perhaps the biggest drag on the Jamaican economy. At US$0.42 per cent per kilowatt-hour, the cost of electricity is not only substantially more expensive than most other countries in this region, but among the largest cost components of Jamaican firms. Expensive energy weakens their competitive positions.

Up to now, we have perceived the solution largely in terms of natural gas, to replace more expensive oil, to fire proposed, more-efficient power plants.

Indeed, the Jamaica Public Service Company (JPS), the light and power company, won a tender for a 360-megawatt power plant to be fired, primarily, by gas.

Further, the Government has just announced that Samsung, the Korean company, has emerged as the preferred bidder for an LNG storage and regasfication facility. It, however, remains unclear, who, and by what arrangement, will supply LNG for that facility.

JPS has projected that the use of natural gas will lower electricity by around 30 per cent, which some analysts say may not be enough to provide a competitive fillip to Jamaican firms.

However, with a new plant, if it is built, and other conversions, no more than 70 per cent of Jamaica’s existing power requirement will be met by natural gas.

Explore cheaper fuels

There is an opportunity, therefore, to explore other cheaper fuels to cover the rest of the island’s power needs and future growth. We agree with Mr Mair that nothing, in this regard, ought to be off the table.

The most immediate possibility is coal, a cheaper fuel than LNG, but with environmental issues that new technologies have substantially lessened. Jamaica must also be aggressive on renewables, such as solar and wind power, doing everything in its capacity to enhance the stability and feasibility of such technologies for the domestic environment.

Not too far in the future also, nuclear power, we believe, should be an option for Jamaica. The idea of small nuclear power reactors of the type that would be useful for a country like Jamaica was not so long ago being viewed with scepticism.

Recently, the United States announced the availability of US$450 million to support the engineering and licensing of small reactors. In this regard, the Americans are playing catch-up. But theirs is an imprimatur that Jamaicans don’t usually ignore.

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.

http://jamaica-gleaner.com/gleaner/20120731/cleisure/cleisure1.html

JPS News

Small Reduction In Light Bills This Month

June 12, 2012

Electricity charges are expected to drop by up to six per cent this month.

This after the Jamaica Public Service Company (JPS) lowered the fuel and IPP charges to customers by just over $2 per kilowatt hour (kWh), when compared to the rate used in May.

According to the JPS, this means that a typical residential customer whose usage remains constant at 200 kWh will see a reduction of approximately six per cent in their electricity bill.

In a statement last evening, the light and power company said the decision to reduce its fuel and IPP charges was based on the recent downward trend in oil prices.

JPS News

JPS News Release on GCT Removal

June 7, 2012

GCT Removed from Electricity Used by Residential Customers

 

June 6, 2012

Prime Minister, the Most Honourable Portia Simpson Miller, in her budget presentation yesterday announced the complete removal of General Consumption Tax (GCT) from the electricity used by residential customers. This reverses an announcement made earlier by the Minister of Finance that GCT would be applied to residential usage over 300 kWh. Business customers will still pay GCT on their electricity usage.

JPS is awaiting further details from the Ministry of Finance regarding the impact of GCT on related services, and will share this information with the public in due course.

In her presentation, the Prime Minister also spoke to initiatives to ensure a secure energy future for Jamaica, which she said was crucial and needs to be urgently addressed to enable the country to capitalize on opportunities. She made the following points:

1) Fuel Diversification: The Government is awaiting the outcome of bids and the associated negotiations for the provision of natural gas and the regassification infrastructure.

2) Renewables: Emphasis will be placed on the use of more renewables as well as waste and biofuels for generating electricity.

3) Conservation: The Government will be setting an example by implementing projects to reduce energy use. The Government will therefore be taking the lead in the national conservation effort, with its goal being a 30% reduction in the energy bill. The Prime Minister indicated that the pilot project for the conservation efforts would begin at the Office of the Prime Minister.

http://www.jpsco.com/

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