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CARICOM Spotlights Energy: Citizens Urged To Support Efforts

November 10, 2016 Webmaster

The painting by Candice Henry of Trinidad and Tobago, which placed second in CARICOM Energy Week art and photo competition last year.

THE CARIBBEAN Community (CARICOM) Secretariat is this month drawing public attention to the energy realities of the region while helping individuals to identify how to better conserve while cutting costs.

They are doing it through a slew of activities, all of which are being celebrated as part of CARICOM Energy Month and under the theme “Sustainable Energy for Sustainable Development”.

“There are really two main things we are trying to do. One is to really build awareness among the general citizenry around energy matters so people understand what energy conservation means and what are some of the things they can do to take better control of their energy system,” said Dr Devon Gardner, programme Manager for Energy at the CARICOM secretariat.

“The second thing is for them to really understand the energy situation in the region and what is being done on the macro scale to provide the right-size solutions that can be used to support the sustainable development of the countries of CARICOM,” he added.

To make that happen, among other things, there are three knowledge webinars planned on the subject, all of which target the regional public and a number of key stakeholders.

There are, too, a number of competitions one of them a photo and art competition and another a regional news reporting competition intended to get people thinking through energy issues as they affect them and the likely solutions.

According to Gardner, the observation of CARICOM Energy Month which also takes account of national-level activities, including kilo walk events set for, for example, Guyana and St Lucia is important. And this, at a time when CARICOM countries are collectively using some 13,000 Btu of energy to produce one US dollar of gross domestic product (GDP) compared to 4,000 Btu of energy used by Japan, for example, to produce the same one US dollar of GDP and the global average of 10,000 Btu.

“We live in an age where there is great participation in energy; energy investments and energy solutions are no longer top down. Thirty years ago, the utility made the decisions about what kind of power plants to use, determined how to deliver the energy and a person took what was provided. If you did not have it, you simply waited for the utility to give it to you, which is why you heard of rural electricity programmes and so on,” Gardner noted.

“We are in an age now where technology has changed; there a lot of options available for or small, individualised power generation systems as well as energy services that can be provided directly and in a cost-effective ways, such as solar water heaters. There is also greater awareness of people around what is possible though they might not know what those solutions are. It is incumbent on us to give them the options,” he added.

“It is a part of good governance, it is a part of what modern society requires,” Gardner said further.

Critically, he said information and exchanges this month will afford Caribbean stakeholders the chance to shape their climate future.

“Over the last twenty years or so, the whole issue climate protection and of sustainable development practice has risen to the fore on the global agenda. There is recognition that the climate fight can be impacted by an aggregation of climate actions at the micro level,” he said.

“The role of each individual in being able to fight or mitigate various climate effects has drive a lot of what energy month wants to provide, which is that each individual, in their own space, can do something, which when aggregated with the global efforts, is part of significant tool,” he added.

Gleaner

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Holness: ‘Get It Right’ On Energy

October 27, 2016 Webmaster

Prime Minister Andrew Holness addresses the opening ceremony of the Organisation of Caribbean Utility Regulators Conference in Montego Bay, St James, yesterday.

Asserting that “we must get it right”, Prime Minister Andrew Holness has urged utility regulators to take seriously their role in helping the Caribbean ease its dependence on oil and embrace technologies and renewables key to energy diversification.

The regulators’ role, he said, is linked to the creation of partnerships with investors who want returns, consumers and governments pushing for the economic development of their countries.

Holness was addressing the opening ceremony for the 14 Organisation Of Caribbean Utility Regulators (OOCUR) conference at the Secrets Resorts & Spa in Montego Bay, St James.

A variety of issues are set for discussion over three days by the more than 160 regional and international experts.

However, Holness, noting the importance of energy to the region’s development and the current high levels of dependence on oil, made it clear that the issue should be at the top of the agenda.

“Energy is clearly the mission-critical frontier,” he said, pointing to the role of Jamaica’s Office of Utilities Regulation (OUR) in helping Jamaica introduce liquefied natural gas (LNG) as part of the energy mix.

“The OUR approved the funding for the conversion of the Jamaica Public Service Bogue plant to enable the move from heavy dependence on oil to diversifying to LNG. I applaud the OUR in this regard for being a strong regulator and helping to make this move a reality – to take Jamaica on this new platform. This is a great example of collaboration among Government, regulator, and utility,” Holness added.

A shipment of LNG supplies arrived in Jamaica last week Saturday, and in two weeks, is expected to be in full use.

TAKE ROLE SERIOUSLY

The prime minister emphasised that regulators have to take seriously their role in helping the Caribbean Community implement the Caribbean energy policy that was approved in 2013.

That policy promotes a shift in sustainable energy through increased use of renewable energy sources and energy efficiency, among other things.

“OOCUR, you have your work cut out for you as not only is Jamaica focused on diversifying its energy mix, so, too, is CARICOM, and we must get it right in the region. Access to affordable energy is a necessary requirement for addressing sustainable development in the region,” Holness said.

He also argued that while there is need for partnership with all stakeholders in the provision of utilities, the providers must insist on self-regulation to ensure that standards are upheld and service delivery is at a high quality.

Earlier, Albert Gordon, chairman of OOCUR, said the conference was happening at a time when regulation was becoming more important for sustainable development.

The conference schedule has placed heavy emphasis on renewable energy and investment.

Jamaica and many other small-island states of the Caribbean are heavy importers of oil, which increases their vulnerabilities to external shocks such as sharp oil price rises. Except for Trinidad and Tobago, the only net exporter of oil and natural gas, all other Caribbean countries are net oil importers.

“For importers other than Suriname, around 87 per cent of primary energy consumed is in the form of imported petroleum products. Imports are mostly diesel fuel for electricity generation, gasolene for transportation, and liquefied petroleum gas used as cooking gas in households,” experts noted in a paper titled ‘Caribbean Energy: Macro-Related Challenges’ released in March by the International Monetary Fund.

This, they said, has led to consistently high electricity rates, which affects the competitiveness and development of CARICOM nations.

Gleaner

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World Bank Raises 2016 Oil Price Forecast

April 27, 2016 Webmaster

Amid improving market sentiment and a weakening dollar, the World Bank is raising its 2016 forecast for crude oil prices to $41 per barrel from $37 per barrel in its latest April 2016 Commodity Markets Outlook, as an oversupply in markets is expected to recede.

The crude oil market rebounded from a low of $25 per barrel in mid-January to $40 per barrel in April following production disruptions in Iraq and Nigeria and a decline in non-Organization of the Petroleum Exporting Countries (OPEC) production, mainly US shale.

A proposed production freeze by major producers failed to materialise at a meeting in mid-April, the World Bank said in a release.

“We expect slightly higher prices for energy commodities over the course of the year as markets rebalance after a period of oversupply,” said John Baffes, senior economist and lead author of the April 2016 Commodity Markets Outlook.

“Still, energy prices could fall further if OPEC increases production significantly and non-OPEC production does not fall as fast as expected,” he added.

All main commodity indices tracked by the World Bank are expected to decline in 2016 from the year before due to persistently elevated supplies, and in the case of industrial commodities – which include energy, metals, and agricultural raw materials – weak growth prospects in emerging market and developing economies.

Energy prices, including oil, natural gas and coal, are due to fall 19.3 per cent in 2016 from the previous year, a more gradual drop than the 24.7 per cent slide forecast in January. Non-energy commodities, such as metals and minerals, agriculture and fertilisers, are due to decline 5.1 per cent this year, a downward revision from the 3.7 per cent drop forecast in January, the World Bank said.

COST PROBLEM

According to a March 2016 International Monetary Fund (IMF) working paper titledCaribbean Energy: Macro-related Challenges, the single most important cost problem is the region’s heavy dependence on expensive, imported fossil fuels.

As in the United States, the cost of using petroleum to produce electricity is several times higher than alternative fuels, it said.

Excluding Haiti, biomass represents around 11 per cent of Caribbean energy supply, mostly concentrated in Jamaica, the paper said.

It noted that Jamaica is the second-largest electricity consumer, after Trinidad and Tobago, with aggregate consumption of three billion kilowatt hours in 2012. That represents 32 per cent of total regional electricity consumption, excluding Trinidad and Tobago.

The IMF estimated that the net benefit to Jamaica from a decline in oil prices as a per cent of gross domestic product was four per cent.

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Trinidad Confronting Major Shock From Fall In Oil Prices — IMF

March 21, 2016 Webmaster

Trinidad & Tobago is confronting a major shock with the sharp fall in energy prices that accelerated early this year.

In a statement following the conclusion of a mission from the International Monetary Fund earlier this year, head of the IMF mission Elie Canetti said that based on available information, including that of job losses and continued supply-side constraints in the energy sector, Trinidad’s economy is expected to contract one per cent this year.

The mission also said that declines in energy-based revenues will constrain the government’s ability to act as an engine of growth.

Still: “With substantial financial buffers and low, albeit rising levels of public debt, Trinidad and Tobago is not in a crisis. Nonetheless, in recent years, taking into account the size of energy revenue windfalls, the country has under-saved and underinvested in its future,” the IMF said.

“As a consequence, the imbalances that are now starting to build up could lead the country to uncomfortable levels of debt and external financial cushions absent further action. The new Government agrees that policy adjustments are needed.”

The fund noted that in the half-year since they took office, the Keith Rowley-led administration has already taken “some difficult but necessary steps”, such as widening the value tax base, cutting fuel subsidies, and cutting the number of ministries.

BUDGET DEFICIT

Despite these measures, the IMF said it projects a 2016 Budget deficit at some 11 per cent of GDP. However, if asset sales were to be counted as revenue rather than financing, the deficit would be equivalent to about five per cent of GDP, it said.

“Continued projected deficits of this size call for further fiscal consolidation, perhaps of around 6 per cent of GDP over the next few years,” said the multilateral agency.

Trinidad has agreed to conduct a wide-ranging expenditure review, and will seek the assistance of the World Bank to rationalise and reverse the unsustainable increases in spending on transfers and subsidies over the last several years.

“We support the Government’s intent to conduct a national dialogue on fuel subsidies with a view to phasing them out over time,” said the fund. “The country’s external situation has been very challenging. Against a backdrop of foreign exchange shortages that have intensified since the beginning of 2015, the recent sharp falls in energy prices are further reducing the available supply.”

During the recent visit, the mission met with government officials, banks, and private-sector representatives to assess the foreign exchange market. The fund noted that the current shortage appears to be driven by business uncertainty but also speculative trades.

“While it is appropriate that the central bank paused in its interest rate hiking cycle in January, there is little scope, as the bank agrees, to cut interest rates, at least until shortages of foreign exchange are ameliorated,” the IMF said.

Gleaner

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Don’t ignore the Leucaena project

January 3, 2013 jrobinson

A perfect example of the shortage of vision affecting Caricom governments is their dropping of the ball on the Leucaena project in the early 1980s.

Ambassador Byron Blake, former Caricom assistant secretary general, reminded us of that last month during a sitting of the Jamaica Observer Monday Exchange.

For those who missed it, the Leucaena project was established in response to the energy crisis of the late 1970s. Essentially a group of scientists and energy experts from Jamaica, Barbados, Haiti, Trinidad & Tobago, and St Lucia started producing energy as well as animal feed from the Leucaena plant, which is referred to in some parts of the world as the ‘miracle tree’ and in Jamaica as the ‘wild tamarind’.

The initiative received support from colleague scientists in the region as well as from Caribbean governments and several international donor organisations.

At the height of the project, companies such as Enerplan Limited

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The LNG volte-face

October 3, 2012 Webmaster

The government’s unexpected abandonment of Liquefied Natural Gas as a possible alternative to national fuel came as a surprise, following negotiations involving multiple participants dealing with the different aspects of the ambitious concept. We bemoan the significant financial loss related to the hyperactivity over the years involving experts – both foreign and local – with bids and counter bids, all of which, at the end of the day, determined that the project was unaffordable. It was naturally anticipated that impact and feasibility studies at the start of the evaluation process would have indicated the viability of the project. It must be speculated, therefore, that a new influence has come to bear on the project rendering it redundant.

This occurrence has changed Jamaica’s long-standing approach with the objective of obtaining LNG from Trinidad and Tobago as an entitlement, according to the Revised Treaty of Chaguaramas (RTC) and invoking the principle of “national treatment“. It seems that the GOJ would no longer need to press its case to buy LNG at the same FOB Port of Spain price, as granted to the T&T manufacturing sector. Jamaica’s case now rests on equalising the cost differential enjoyed by T&T manufacturers due to the low preferential cost of their electricity, which is alleged to be subsidised.

HYLTON… had talks in June with two Trinidadian energy ministers

This tectonic shift in direction requires a revised appraisal of GOJ’s posture towards the defence of domestic manufacturers and exporters competing with duty-free imported T&T goods which are very competitively priced due to their low manufacturing costs enjoyed at home. The GOJ may now consider adopting a defensive mode regarding the ever-growing trade deficit with Caricom and T&T in particular. This necessitates identifying the alleged subsidy granted to the T&T manufacturing sector by the provision of preferentially priced electricity.

As reported in the media, on July 19 two Trinidadian energy ministers visited Minister Anthony Hylton for talks dealing with a possible solution to the perennial deficit problem with T&T. It was stated that the visitors agreed to get back to Minister Hylton in about a month with suggested ways to deal with the problem. To date nothing further has been heard.

Consideing the protracted period that the trade deficit with T&T has been endured by Jamaica’s private sector, the time has come for a “red line” to be drawn on the questionable practice of alleged subsidised goods being imported duty-free, and causing material injury to domestic manufacturers experiencing serious difficulty in competing against such preferentially priced merchandise.

Where such adverse effects take the form of material injury to a domestic industry in the importing country, the Subsidies & Countervailing Measures (SCM) Agreement authorises that country to levy countervailing duties to offset the subsidy. Such duties can be levied only if, after duly conducted investigations, the investigating authorities are satisfied that there is a causal link between subsidised or dumped imports and material injury to the industry concerned. Furthermore, such investigations can normally be initiated only on the basis of a petition from the affected industry alleging that such imports are causing it damage.

The second development, due to the reversal of GOJ’s interest in T&T LNG, is the possibility for Jamaican private sector extractive and power generation industries, considering conversion to LNG sourced from T&T and elsewhere, possibly together with other interested local businesses. As the GOJ would not be involved, such a private sector industrial group may have to negotiate directly with Atlantic LNG which own the four gas-producing trains. However, Atlantic LNG has indicated that its entire product is currently committed to long-term contracts, therefore arrangements would have to be discussed with Atlantic’s existing customers. Such a relationship would be a company-to-company initiative that excludes governments. The base price therefore would be determined by Atlantic LNG’s customer, using one of the four international gas-pricing models.

The question of “national treatment” then arises. As stated by a former T&T energy minister, in coming to a Caribbean price, it would have to be the price as determined by the net back position at the well head. This refers to a pricing mechanism that shares the end market value of gas with all parties in the value chain. The netback pricing formula is a common feature of most, if not all LNG contracts. The well head value of gas is the residual amount after subtracting from market value, the cost of liquefaction, transport, storage and re-gasification. To comply with T&T’s market value as granted to their manufacturing sector, that price could only be obtained from the T&T owned National Gas Company, and it is doubtful if such a price would be acceptable to an Atlantic LNG customer in a company-to-company price negotiation. However, as a Caricom product, the LNG should be duty-free when landed in Jamaica, according to the certificate of origin, for LNG purchased from both the National Gas Company or an Atlantic LNG customer.

Time and space do not permit a full examination of this complex situation dealing with the basic solution to Jamaica’s alternative energy dilemma. It is widely believed that Jamaica’s future prospect for alternative energy rests with the private sector. Now that government has withdrawn from the exploratory exercise with LNG, it is time for the private sector companies to get involved with the LNG option.

Meanwhile, the GOJ is expected to proceed with its negotiations to equalise the cost of Jamaica’s locally produced goods with those imported from T&T.

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EDITORIAL – Electricity Free-For-All

September 3, 2012 jrobinson

It’s one of the costliest crimes plaguing Jamaica, but few people recognise the scope and gravity of this parasitic add-on.

The Jamaica Public Service Company (JPS), the monopoly distributor of electricity across the island, lamented this past weekend that it has lost US$30 million to electricity theft so far this year, and spends another US$30 million annually on technology to curb the piracy. Combined, that represents the equivalent of J$5.4 billion that inflates the cost of power to Jamaican households and businesses teetering on the edge of survival.

“About 14 per cent of the electricity produced by JPS is stolen, and the cost of this theft is shared by both JPS and our customers,” says Kelly Tomblin, JPS’s president and CEO.

Of course, that’s not the whole story. Jamaica’s electricity costs are meteoric because of JPS’s outdated plants, which deliver energy inefficiently.

Energy cost, as this newspaper has repeatedly emphasised in these columns, is the most crucial factor behind the uncompetitiveness of the Jamaican economy. This handicap puts Jamaica at a severe disadvantage internationally and against regional neighbours such as Trinidad and Tobago, on which misplaced rage has been directed for its one-sided trade relationship, on which Jamaica is running a deficit of nearly US$1 billion on mostly oil imports.

Scores, if not hundreds, of businesses that have foundered name electricity cost to be among the main reasons, if not the primary one, for their collapse. Jamaica pays up to US$0.40 per kilowatt-hour for energy – JPS will be quick to remind that August’s rate was eight cents cheaper – six times that of Trinidad and Tobago.

Phillip Paulwell, the energy minister, has been a vigorous cheerleader for the dismantling of the monopoly, which he believes will drive down costs to consumers.

Mr Paulwell predicates his vision for a liberalised electricity sector on foreign investors indulging their appetite among a Jamaican population willing to give its hand to the suitor with the sweetest proposal. But Mr Paulwell’s romanticised notions seem to ignore the compelling reality that investors may not gamble money on Jamaica’s unreliable national security structure.

LAW AND ORDER ON HOLIDAY?

The maintenance of law and order is the fundamental role of government, the glue that holds society and the economy together. It is on that score that the Jamaican Government has been found wanting.

JPS, which has decades-old roots in the Jamaican economy, may be less minded to disengage because of the breadth of its capital investment, even if it has to spend an extra US$30 million a year. A new company, however, may be less inclined to yawn at such write-offs for crime.

Politicians of both the ruling People’s National Party and the opposition Jamaica Labour Party have generally winked at the problem of electricity theft. Most inner-city communities are cobwebbed with illegal connections. And unscrupulous business operators and wealthy suburban householders are big on the gig. The police do little to prevent it.

The numbers bear the tale. According to JPS, “Since the start of the year, 38 persons have been arrested for illegal abstraction of electricity, over 5,700 meter irregularities have been discovered, and 14,000 illegal ‘throw-up’ lines removed across the island.” But that’s a drop in the bucket.

Government had better get serious about electricity theft. Or its overtures to investors might be equated with wooing a lover without the vow of protection.

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.

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News

Ja-T’dad LNG Talks At ‘Ground Zero’

April 23, 2012 jrobinson

JAMAICA HAS once again approached its Caribbean neighbour, Trinidad and Tobago, to secure a supply of liquefied natural gas (LNG)

Energy Minister Phillip Paulwell said the advances were made by the new Government as early as February. He said he has had discussions with his Trinidad and Tobago counterpart on the issue.

“We are trying to see if there can be an agreement at this stage in relation to the supply of LNG,” Paulwell told

News

Trinidad Govt looking into solar panel plant

October 1, 2010 jrobinson

: Image via Wikipedia

The Government of Trinidad& Tobago is exploring the possibility of establishing a facility to produce glass and photovoltaic or solar cells, used to convert sunlight energy into electricity.

Energy Minister Carolyn Seepersad-Bachan said the People’s Partnership Government was looking at importing silica from Guyana to provide raw material for the glass and PV cell plant.

She was speaking earlier this week at a BG luncheon, hosted by energy company BG Trinidad and Tobago, in partnership with State bank First Citizens, at the Hilton Trinidad in Port of Spain.

Seepersad-Bachan said the project could cost around US$2.5 billion.

There is a huge export market for PV systems, solar and wind power systems, she said, adding it was critical the country moves towards energy efficiency.

Finance Minister Winston Dookeran said in the September 8 national budget, in Parliament, the Government would explore the development of alternative energy such as solar and wind energy and explore the prospect of developing a regional effort for the long-term sustainability of the country’s energy supply.

Seepersad-Bachan said the Government was also reintroducing the Petroleum Pricing Committee to ensure there was a system of transparency in the determination of energy prices.

She said the committee will be reintroduced after consultation with the Finance Minister.

Jamaica Observer