Worldwatch's Shakuntala Makhijani presents early findings of the Sustainable Energy Roadmap for Jamaica.
Recently, members of Worldwatch’s Climate & Energy program traveled to Kingston, Jamaica to conduct a Stakeholder Consultation for the ongoing Sustainable Energy Roadmap project. The workshop comprised a morning session where the Roadmap’s early findings were presented to members of the country’s electricity sector followed by an afternoon dialogue addressing some of the key questions at the heart of the team’s ongoing research. The consultation came at a very key time as Jamaica is in the midst of some significant changes in the electricity sector while it faces an ongoing energy crisis.
The Sustainable Energy Roadmap for Jamaica is part of a multi-year project sponsored by the International Climate Initiative of the German Ministry of Environment. Worldwatch is examining recently assessed renewable resource potential, current energy policy frameworks, the potential for adding energy efficiency measures, technical challenges to renewable energy integration and underlying economic factors to try and help decision makers understand the choices available for making the country’s electricity sector more sustainable. Not surprisingly, the country has a tremendous solar resource, an average of 5 to 7 kilowatt-hours per meter squared per day (kWh/m2/day), similar to the Southwest of the United States. It also has strong wind potential including some significant locations off the Southeast coast of the island.
Early results of a Levelized Cost of Electricity for Jamaica using the World Bank's ESMAP modeling tool.
Early research has also yielded some interesting economic results. Using the Model for Electricity Technology Assessment (META) from the World Bank’s ESMAP program, Worldwatch has generated a levelized cost of electricity (LCOE) showing the cost of energy from various fuel sources. However, the model also allows for calculating external costs associated with fossil fuel use. This analysis shows wind coming in at a very competitive price (around US $0.11 per kWh) as opposed to oil and diesel generation (ranging from about US $0.22 to $0.35 per kWh). Comparatively, liquefied natural gas (LNG) comes in at around US $0.12 per kWh and, as Worldwatch has mentioned previously, is a likely solution to the persistent problem of variability that comes with renewable energy generation.
The workshop concluded with a look at the policy framework that will be necessary to achieve the aggressive – but doable – goal of seeing 30 percent of Jamaica’s energy mix come from renewable sources by 2030. Obviously renewable energy generation should be at the heart of all future planning and, with the country’s forward-looking energy plan, Jamaica has a solid long-term plan in place. However, an efficient and well-planned structure to carry out the energy plan will also have to exist, and right now, it appears the country is having difficulty in this area.
Earlier this year, the government of Jamaica removed itself from the process of bringing 480 megawatts (MW) of LNG capacity to the island. The project, which has been talked about for more than ten years, is intended to replace old, inefficient generation plants with newer technology that requires a much more economical fuel source. The island’s lone electricity utility, Jamaica Public Service Company (JPS), won the bid to move the project forward and is now trying to resolve the dilemma of securing a gas source at a price competitive enough to make the project profitable. Having waited so long, it appears that will not be resolved soon and the LNG capacity, which was supposed to come online this year, is now being estimated to arrive in 2015.
The renewable energy policy landscape for Jamaica was further complicated when the Jamaican government rescinded an order that gave the Petroleum Corporation of Jamaica (PCJ) exclusive right to develop renewable energy projects. Shortly thereafter, Jamaica’s Office of Utility Regulation (OUR) was given the responsibility of procuring 115 megawatts (MW) of renewable energy generating capacity through a request for proposal (RFP) process. In an effort to satisfy the quota as quickly as possible, the OUR suspended a provision that exempts from a public tendering process renewable energy projects smaller than 25 MW and whose electricity would be sold to JPS. This decision has received considerable pushback from some local groups who claim it will only add to the bureaucracy of bringing renewable energy investment to the island. The OUR feels its decision will lead to a more competitive bidding process and better management of meeting the 115 MW quota.
These changes took place while a proposed Feed-In Tariff, which had been making its way through the Jamaican Parliament, was quietly shelved. This policy instrument would have set a price floor for electricity generated from various renewable sources and provided more certainty for potential investors. Instead, the prices designed for the tariff are now being used as a cap. The OUR is expecting that projects, subject to the fore mentioned competitive bidding process, will come in under the defined price ceiling.
Another level of uncertainty was added to the electricity sector when the Jamaican Supreme Court invalidated the transmission and distribution monopoly enjoyed by JPS. The utility and the Jamaican government are appealing the ruling even though Energy Minister Phillip Paulwell has openly called for dismantling the monopoly. While not directly related to renewable energy, this adds to the confusion that keeps renewable energy investors at bay.
Clearly, Jamaica still has a long road to travel to realize a more sustainable energy future. Fortunately our Sustainable Energy Roadmap continues to strengthen the argument for a more proactive and aggressive pursuit of renewable energy use in the country. What remains to be seen is if larger factors like government coordination and legal frameworks can be implemented to make the transition as smooth and as efficient as possible.