Power surge for cheaper electricity

Phillip Paulwell, Guest Columnist

I write in reference to a letter headlined 'Tired of smoke and mirrors, Mr Paulwell' that appeared in The Gleaner and www.jamaica-gleaner.com publications of Wednesday, January 8, 2014.

The writer, Mr Robert Forbes, seems to have some misunderstanding of the statements I have made concerning the reduction in price of electricity during my term as minister. I wish to state my position once more for the record.

Our vision for Jamaica's energy sector is one in which we transition our electricity-generation fuel sources from liquid fuels, specifically heavy fuel oil (HFO) and diesel, to cheaper and more abundant fuels. Those include: natural gas, solid fuels such as petcoke and coal, and fuel from renewable sources, such as solar, wind, hydro energy and energy from waste or biomass.

The underlying goal of this transition is to reduce the retail price of electricity - the price the consumer pays - to between US$0.15 and US$0.18 per kilowatt-hour, the price we have determined will enable Jamaica to be globally competitive.

Gradual overhaul

The transformation of our energy sector will take some time, and the corresponding reductions will also happen over time. In the medium term, the completion and commissioning of the 360MW plant will result in a reduction in price of no less than 30 per cent.

That 30 per cent reduction will be realised because natural gas is a more efficient and cheaper fuel than HFO/diesel, and because the new plant will retire some 292MW of aged, inefficient capacity. Ground will be broken on the site of the new plant before the end of this financial year, and it is scheduled to be commissioned in 2016.

Also, the addition of 78MW of clean, renewable solar and wind energy, expected to come on to the grid in 2015, will deliver additional reductions in the medium term.

In the longer term (2016 to 2018), more reductions will be realised as the entire country's energy infrastructure is transformed. As we transition our electricity generation from expensive liquids to cheaper solid, gas and renewable fuels, there will be attendant reductions in cost.

Currently, there are three plants using expensive diesel/HFO - Bogue, West Kingston and Dr Bird II - which will be converted to use natural gas instead. During the period as well, the power-purchase agreement governing the supply of electricity generated by Jamaica Private Power Company to the JPS will expire, presenting an opportunity to negotiate for a better wholesale electricity price.

renewable sources

Beginning this year, the Government will begin to put great focus and insistence that the JPS improve the efficiency of its operations. We will be relentless in ensuring the reduction of losses by the company because of technical inefficiencies of the transmission and distribution systems. In addition, the Government will continue to work with the JPS to reduce electricity theft, a major source of losses.

Finally, increasing the percentage of our energy generated by renewable sources we have right here at home will also deliver more reductions in the price of electricity.

When all these measures are considered, a 40-50 per cent reduction of the price of electricity is highly achievable. It will take tedious negotiation, political will, some risk-taking and dogged determination to make it happen, but I am committed to seeing Jamaica on a path to that transition.

An affordable, reliable energy sector has long eluded Jamaica, and has been the main reason for our lack of competitiveness, growth and development.

For the first time, the Government of Jamaica is taking the strong leadership role required to make a major transformation of that expensive, inefficient sector, and I am confident that we will achieve our goals.

Phillip Paulwell is minister of science, technology, energy and mining. Email feedback to columns@gleanerjm.com.