Worldwatch Institute highlights next steps for CARICOM region to
Shakuntala Makhijani , Guest Columnist
By Shakuntala Makhijani , Guest Columnist
Last month, electricity regulator, the Office of Utilities Regulation (OUR), released recommendations for Jamaica‘s anticipated electricity wheeling programme.
Electricity wheeling has been proposed in Jamaica as a way to promote distributed power generation, especially from renewable-energy sources.
Under the proposed wheeling programme, a company or individual could generate electricity in one part of the country and pay the grid operator – the Jamaica Public Service Company (JPS) – a fee to transport that power to another location where it will be used.
Because JPS currently has a monopoly on electricity distribution, a company would only be able to send electricity over the grid to be consumed at a location that it also owns. For example, a sugar company that generates electricity at a sugar refinery using bagasse can send excess power to its offices in Kingston to avoid paying high electricity bills there, but cannot sell electricity to another entity.
Several of Jamaica’s large energy consumers are considering participating in the forthcoming wheeling programme to support investments in renewable energy.
Hotel chain Sandals, the Caribbean’s largest poultry producer Jamaica Broilers, and the National Water Commission, the largest single electricity consumer in the country, all have plans to wheel power.
A National Irrigation Commission project using wind energy to power irrigation pumps also wants to participate in the programme.
Only for firm generation capacity
At a recent public consultation, however, OUR officials confirmed that the electricity wheeling programme will be intended only for firm generation capacity – meaning it will exclude variable renewable-energy sources such as solar and wind.
Electricity wheeling provides an opportunity to promote distributed renewable generation, especially at the large commercial or industrial scale (more than 100 kilowatts to several megawatts).
For this reason, Worldwatch has submitted a public comment to OUR recommending, based on our research in renewable energy transition in Jamaica, that the regulator reconsider its exclusion of variable capacity and open the electricity wheeling programme to all renewable-energy sources.
Prime Minister Portia Simpson Miller‘s administration has publicly committed to the ambitious goal of 30 per cent renewable energy by 2030. In our view, the Jamaican government has every reason to ensure that Jamaica can meet these targets by allowing all renewable-energy sources to participate in programmes, such as electricity wheeling.
For its own economic development, Jamaica’s Government would be well advised to mandate that the utilities regulation office and the national utility continue and expand ongoing efforts to strengthen Jamaica’s national electricity grid in order to accommodate new, variable renewable generation in accordance with national targets.
In the meantime, however, Jamaica’s electricity generation mix is dominated by diesel and fuel oil – and planned liquefied natural gas capacity – which can be rapidly fired up or down in response to variable renewable generation and changes in electricity demand.
So long as JPS and OUR undertake precautions to address grid congestion, voltage regulation, and other issues associated with distributed generation, Jamaica’s grid should be capable of integrating variable renewable capacity through the wheeling programme.
Commercial and industrial-scale renewable electricity generation is a cost-effective way to meet the Jamaican Government’s renewable energy targets.
Fees should be an incentive
Electricity wheeling should, therefore, include variable-generation capacity in order to promote development of solar and wind-energy technologies at this scale.
For this to be successful, it is critical that regulators assure that fees are reasonable enough to insure that distributed generators will have an incentive to participate in the programme.
Guidance from the regulatory office is also needed to clarify eligibility criteria for a single entity under the wheeling programme. For example, if the Sandals resort chain participates in a wheeling programme, why should it not be allowed to send electricity generated at one resort to another? However, each resort in the Sandals chain is registered as a separate entity, creating uncertainty as to whether such use of the wheeling system would be permitted.
Resolving this issue before electricity wheeling guidelines are finalised will help avoid potential delays and allow ready projects to be implemented on schedule.
As Jamaica’s electricity regulator, it is the responsibility of the utility regulatory office to ensure that the national electricity grid is prepared to accommodate the new renewable electricity capacity – both firm and variable – needed to meet the Government’s 30 per cent target.
Given the high cost of the current petroleum-based electricity system and the country’s strong renewable-energy resources, Jamaica can transition to a secure and reliable renewable-energy system while still reducing electricity costs for consumers.
The Worldwatch Institute is currently finalising a Sustainable Electricity Roadmap for Jamaica that details Jamaica’s abundant renewable energy potential and recommends grid integration and policy solutions for reliably harnessing these resources to help achieve the country’s long-term sustainable energy goals.
Shakuntala Makhijani is a representative of Worldwatch Institute, which is currently working on sustainable energy roadmaps for the Dominican Republic, Haiti, and Jamaica. mkonold@worldwatch.org business@gleanerjm.com
JAMAICA should pursue the investment opportunities presented by renewable energy rather than focus on fossil fuels like LNG, says a global think tank.
“There is great potential for local economies in investing in renewable energy,” said Mark Konold, head of the Washington-based Worldwatch Institute, which is identifying opportunities for low-carbon, energy developments in the Caribbean.
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Caribbean Project Manager for the Worldwatch Institute Mark Konold says Jamaica should invest in its untapped energy potential. |
Worldwide figures for investment in renewables has shot up steadilly, said the organisation. Countries around the globe put over US$200 billion ($17.4 trillion) into non-carbon-based energy projects last year, as compared to the US$40 billion invested in oil, coal and gas.
Developing nations have led the pack in financing these projects, underscoring the growing recognition of how the cost of traditional energy sources eat into a country’s GDP, said Konold.
“Acting rapidly and ambitiously will not only serve social needs, it is also an economically superior approach to ‘we’ll wait and see’,” he said. Being more aggressive up front, taking more action immediately, “gets more results than being cautious”.
The government’s target for increasing the use of renewable energy to 30 per cent by 2030 is a ‘bold’ move, said Konold, as long-term vision is necessary to foster growth in the industry.
“If I’m an investor, I know how long this project will be and that lets me know how well it will do for me economically,” he said. “That kind of certainty is important.”
Konold is head of the Worldwatch Institute’s assessment of the energy sectors in Jamaica, Haiti and the Dominican Republic, which is aimed at helping the countries reduce dependence on fossil fuel imports. His group will present a low-carbon energy roadmap for Jamaica to the ministry of energy, which will focus on the underuse of natural resources such as solar and wind power.
The market alone cannot lead the process, Konold said, underlining how important it is that the Government be streamlined.
“Government has to play a very strong role,” he said. “For example, Germany doesn’t have as many natural resources as Jamaica, but renewable energy has succeeded there because of strong leadership in terms of policies.”
The group will be back in Jamaica before the end of the year to present their findings to the ministry. The project