Jamaica! Jamaica! I Love You!: October 2015

Jamaica’s Energy Profile

Jamaicans presently pay 40 cents (USD) per kwh for electricity which is one of the highest rates in the world. In comparison, residents in the state of Texas pay an average of 12 cents per kwh. The high cost of electricity in Jamaica puts a large burden on households and small businesses. The average citizen has to pay approximately 33% of their income towards electricity, resulting in many residents living without electricity with some resorting to electricity theft. With the current energy conundrum Jamaica faces, it’s government is exploring ways to reduce energy costs.

Jamaica’s current energy crisis is not reflective of its historic beginnings in energy. Jamaica started out as one of the energy pioneers in the Caribbean, and was one of the first countries in the world to receive electricity. However , 122 years later in 2014, Jamaica has fallen behind in the use of renewable energy, but there is still great potential for development. As the third largest island in the Caribbean, Jamaica has an area of 10,990 sq km (4,243 sq miles) and a population of 2.7 million people. Jamaica’s main industries that contribute to the GDP are Bauxite, Tourism, Agriculture and Manufacturing. Jamaica’s energy resources are managed by the Ministry of Science, Technology, Energy and Mining. The Energy Division works with two principal energy companies, namely the Jamaica Public Service Company (JPSCo) and the Petroleum Corporation of Jamaica.

The Jamaica Public Service Company (JPSCo) is the primary electricity distributer and provider and the Petroleum Corporation of Jamaica is the primary importer of petroleum and other energy products. Jamaica does not have it’s own energy resource and this has caused energy disruptions for example, in the 1973 oil crisis, and also causes increases in the cost of electricity. Jamaica is heavily dependent on foreign energy resources and imports most of it’s energy. Jamaica imports energy from Trinidad and Tobago, Venezuela, Ecuador and Mexico. Jamaica has a great potential to use renewable energy, but under utilizes this avenue. Some of the renewable energy sources that Jamaica currently uses include solar energy, mini-hydropower, wind, and biomass. Jamaica’s main energy sources come from oil, coal, hydro-electricity and biomass. Jamaica’s Bauxite industry uses a large percentage of the energy that is imported.

Jamaica is a pioneer in electricity, as it was one of the first countries in the world to receive electricity in 1892, supplied by the Jamaica Electric Light Company in the nation’s capital Kingston. In 1897, just five years after it’s historic rise to power generation, Jamaica made another important step towards green energy lead by the West India Electric Company. This company built a hydroelectric plant on the Rio Cobre River with an energy capacity of over 900 kilowatts. These advancements lead to industrial revolution in Jamaica and introduced new elements to the country including electric tram cars for public transport. Jamaica’s energy future was bright but not without challenges. In 1907, a major earthquake destroyed a section of the capital Kingston including the power infrastructure. This lead to a consolidation of energy services but resulted in significant improvements in service.

The consolidation formed the Jamaica Public Service company. The Jamaica Public Service (JPSCo) became a registered company in 1923. It started as a foreign owned private company. JPSCo has 603,350 customers and has a generation capacity of over 620 Megawatts. JPSCo also partners with the following Independent Power Producers (IPPs) in order to have access to an additional 820 megawatts of power: Wigton Wind Farm, Jamaica Energy Partners, Jamalco and Jamaica Private Power Company (JPPC). Eighty percent of (JPSCo) is owned by the private shareholders Marubeni Caribbean and Korea East- West Power Company, Nineteen percent is owned by the Government of Jamaica and one percent by minority shareholders.

Due to the fact that Jamaica produces no petroleum, the government of Jamaica created the Petroleum Corporation of Jamaica (PCJ) in 1979 to import petroleum, manage its use and distribution and to develop strategies for the exploration of oil and gas. The PCJ is comprised of the following companies: Petrojam limited, Petrojam Ethanol Limited, Petcom Limited, Jamaica Aircraft Refuelling Services, and Wigton Windfarm Limited. The Jamaican government has made alliances with other countries in order to receive concession on the price of oil. The Alliances are: The Venezuelan Oil Agreement, The Latin American Energy Organization (OLADE), Assistencia Reciproca Petrolera Empresarial Latino Americana (ARPEL), The San Jose Accord, and the PetroCaribe Agreement. The Venezuelan Oil Agreement, also known as the Caracas Energy Agreement supplies 80,000 barrels of oil per day to ten Central American and Caribbean States including Jamaica. Jamaica pays for 80% of the oil and repays the other 20% in a 15 year loan at a 2% interest rate. The Latin American Energy Organization (OLADE) was established in 1973 with the Lima Agreement which helps to ensure that the twenty six (26) Latin American and Caribbean member countries which includes Jamaica will have an economical means of receiving energy. In 1985, The Petroleum Corporation of Jamaica joined the (ARPEL) which is a forum made up of oil companies in the Latin American and Caribbean region. It promotes economical business among the countries that are members. The PetroCaribe agreement is an agreement between the government of Jamaica and Venezuela to also promote economical means of receiving energy.

In 2006, Jamaica imported US1.84 billion dollars worth of oil and in 2007 crude oil was imported for US $90 per bbl. During the period of 2006 to 2010, an average of 25.6 million barrels of petroleum was imported. On a daily basis, Jamaica consumes approximately sixty six thousand barrels of petroleum and sixty two thousand short tons of coal. In addition to this, approximately three billion kilowatt hours of electricity are used and as a by-product approximately ten million metric tons of carbon dioxide are emitted.

The major consumers of energy in Jamaica are the National Water Commission, the hotel and tourism industry, and the bauxite and alumina industry. The following data of petroleum consumption by barrel in 2010 was obtained from a table created by the Energy Economics and Planning Unit of the Ministry of Energy and Mining: Road and Rail Transportation-5,647,692 barrels, Shipping-1,868,525 barrels, Aviation-1,899,930 barrels, Cement Manufacture-5139 barrels, Electricity Generation-6,578,349 barrels, Bauxite/Alumina Processing- 2,884,978 barrels, Sugar Manufacturing - 15,045 barrels, Cooking and Lighting – 950,861 barrels, Other Manufacturing 52, 969 barrels, Other Activity-115, 324 barrels, Petroleum Refinery-268,039 barrels.

According to a report from The Jamaica Sustainable Energy Roadmap, energy loss is mainly due to inefficiencies in the national grid, but is also attributed to electricity theft. In 2013, JPSCo reported a system loss of 25.88% because of electricity theft costing US $43.5M. With an unemployment rate of 13.4%, and the average gross salary being US $2498, it is difficult for the average Jamaican to pay for electricity. To add to this, unlike the government, the all-inclusive mega resorts, and industries such as the bauxite industry, the average Jamaican has to pay an increased rate of 40 cents (USD) per kWH and cannot afford the huge burden of simply lighting their homes, and running necessary appliances such as the refrigerator. According to the US Department of Energy, the average per capita consumption of electricity in Texas was 5683 kWh in 2011 at a cost of around 12 cents per kWh. If the average cost of electricity in Jamaica which is 40 cents per kWh, were to be extrapolated to the average per capita consumption in Texas, this would yield an average yearly cost of US$ 2273.20 instead of US$ 681.96. These figures are excluding transmission, delivery and other charges which can add to the cost of electricity by as much as 45%. Bear in mind that in Jamaica, most homes do not have a water heater or air conditioning unit and the average Jamaican home is less than 500 square feet. A possible reason for electricity theft might be attributed to, the fact that the people cannot afford to pay for electricity because they have to spend their income on basic necessities like food, water and shelter. The Jamaican Ministry of Science, Technology, Energy and Mining is working to implement projects to decrease the cost of energy.

There is a lot of potential for Renewable Energy in Jamaica. The Renewable Energy and Energy Efficiency Department of the PCJ has lead initiatives to make buildings more energy efficient. They have started by implementing solar energy equipment in hospitals and schools to provide lighting and water heating. The Wigton Windfarm has collaborated with the University of the West Indies to do a Wind and Solar Development Program (W&SDP) in which feasibility studies have been done to determine possible future wind farm sites. The PCJ has also initiated a project to produce biodiesel. The PCJ has also created public education projects like the Energy Conservation Incentive Program for Schools and the Energy Seminar Series for businesses, householders and other consumers.

Jamaica has great solar potential with Global Horizontal Irradiance (GHI) ranging from 5 to 8 kWh per square meter per day. In comparison Germany, which has the most installed solar photovoltaic (PV) systems in the world, has an average GHI of 3.5 kWh per square meter per day. A JPS report based on the average Jamaican’s electricity consumption stated that a one square –kilometer solar PV farm would generate enough power for over 64,000 households. This indicates that approximately 10 solar farms could power the approximately 525,000 households in Jamaica. Ongoing energy efficiency and renewable energy pilot projects funded by the Development Bank of Jamaica reported that two particular hotels, Footprints on the Sand and the Sunrise Club Hotel implemented energy efficiency measures which included replacing electric water heaters with solar water heaters, installing a solar PV system and replacing old air condition units with more efficient units.

Jamaica also has great potential for Wind Power. The Wigton Windfarm in Manchester, owned by the PCJ and the Munro Wind Farm in St, Elizabeth owned by the JPSCo are two wind farms that are operated on a commercial scale. The Wigton Wind farm has an average wind speed of 8.3 m/s. Wigton started in 2004 with 23 wind turbines that generated a capacity of 20.7 MW. In 2010 Wigton added 9 wind turbines which added an additional 18 MW capacity, to contribute a total capacity of 38MW to the national electricity grid. The Munro Wind Farm which was started in 2010 has 4 wind turbines which generate 3MW capacity to the grid. Feasibility studies in 18 locations have being done by Wigton for the possibility of developing more wind farms. A report by the Worldwatch Institute stated that the development of ten (10) wind farms could contribute to supplying about half of the power needs in Jamaica.

Other renewable energy resources like hydropower, waste-to-energy power, biomass, wave and tidal energy and geothermal energy, also demonstrate great potential to be developed. Development of these resources would help Jamaica to off-set the cost of imported energy and be less dependent on imported oil.

The Jamaican government is working towards finding ways to reduce energy costs and depend less on imported oil. In January of 2012, Minister of Science, Technology, Energy and Mining the Honourable Phillip Paulwell stated that over the subsequent four year period he would reduce electricity rates by 50%. A National Development Plan called “Vision 2030” was implemented by the Jamaican government in 2005. This plan seeks to ensure that Jamaica will have fuel diversification. Past President of the Office of Utilities Regulation (OUR), J. Paul Morgan has been an advocate for the use of Liquified Natural Gas for Energy in Jamaica. He also stated the need for new electricity legislation. On October 4, 2013, the Ministry, on recommendation from the Office of Utilities Regulation granted a license to the Energy World International as part of an ongoing project to decrease the cost of electricity in Jamaica. Energy World International is an energy company which produces and sells natural gas. The Worldwatch Institute has also collaborated with the Jamaican government to create the “Sustainable Energy Roadmap” which is a methodology to help Jamaica to develop the energy resources. This project was funded by the German government through it’s International Climate Initiative. The Worldwatch Institute has done extensive, comprehensive research on ways to make energy distribution and transmission more efficient, analysed ways of having more environmentally responsible and efficient consumption of energy, and done feasibility studies for the better use and development of renewable energy resources.

Thursday, October 1, 2015

Jamaica’s Energy Profile