Last month, Jamaica’s electricity regulator, the Office of Utilities Regulation (OUR), released recommendations for the country’s anticipated electricity wheeling program. Electricity wheeling has been proposed in Jamaica as a way to promote distributed power generation, especially from renewable energy sources. Under the proposed wheeling program, 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 transmission and distribution on the island, 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 program 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 solar power. A National Irrigation Commission project using wind energy to power irrigation pumps also wants to participate in the program.
At a recent public consultation however, OUR officials confirmed that the electricity wheeling program 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 (over 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 program to all renewable energy sources.
Prime Minister Portia Simpson Miller’s administration has publicly committed to the ambitious goal of 30 percent 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 programs such as net 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 program.
Commercial- and industrial-scale renewable electricity generation is a cost-effective way to meet the Jamaican government’s renewable energy targets. 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 program.
Guidance from the regulatory office is also needed to clarify eligibility criteria for a single entity under the wheeling program. For example, if the Sandals resort chain participates in a wheeling program, 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 finalized 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 percent 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 finalizing 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 Climate and Energy Research Associate at the Worldwatch Institute.