Reducing the cost of energy in Jamaica

In light of recent issues with the 381 MW project, I want to add my take to this age old problem of high energy cost. The cost of electricity is estimated at 36 cents/kWh, some estimates are as high as 43 cents/kWh. Either way, Jamaica would be ranked among the highest in the world where electricity costs are concerned. Jamaica's installed power generation capacity exceeds 800 MW, this includes approximately 600 MW from Jamaica Public Service Company Limited (JPSCo) and approximately 200 MW from Independent Power Producers (IPPs).

Figure 1: Chart showing the cost of electricity in Jamaica compared to the rest of the Caribbean. Source of image: The Caribbean has some of the world’s highest energy costs – now is the time to transform the region’s energy market

What is the main contributor to Jamaica's high electricity costs? Here's a quote from the Petroleum Corporation of Jamaica:

Jamaica has one of the highest energy intensity rates in Latin America and the Caribbean and is almost totally dependent on imported oil, accounting for over 90% of its total energy use. The total cost of imported oil to Jamaica increased from  US$ 344 million in 1998 to approximately US$ 1.84 billion in 2006. In 1998 the average cost of crude oil was US$ 14.17 per bbl and by 2007 the price has risen to over US$ 90 per bbl.

It is now evident that Jamaica needs to diversify its energy mix. Possible inclusions into Jamaica's energy mix are: waste to energy, geothermal energy, solar energy, hydroelectric energy, wind energy, coal and natural gas.

Waste to Energy

It is estimated that Jamaica's waste disposal sites receive approximately 1.2 billion tons of garbage annually. Energy conversion from waste would limit the calamitous impact the garbage is having on our ecosystem. Notably evident from past and recent fires at Jamaica's largest dump, Riverton City. It seems as if our policy makers are heading in this direction, as per this recent article: Government Finalising Waste to Energy Policy

Most recently, Mr Phillip Paulwell, is hinting at the possibility of going to the market to secure investors for a 30-40 MW waste to energy power. This move would definitely help to put us on the path of energy diversification. 

Geothermal Energy

Geothermal energy is essentially heat energy that is found within the earth. But large scale development is usually limited to volcanically active regions. Despite such a limitation, it seems as if Jamaica will have its first geothermal power power up and running within the latter part of the current decade. You have a look at this September 18, 2013 article: Geothermal Energy Project Sites Narrowed to Six.

Solar Energy

Jamaica lies within a region that makes it a suitable location for the implementation of solar energy projects. The generating capacity as it relates to Jamaica is quite limitless, making solar an option that will foster a reduction in the price of electricity. Solar energy would also limit our carbon footprint and significantly cut our annual energy bill, in excess US$ 2.2 billion. Despite the various positives, there are a few limitations. Limitations include: high upfront costs, lack of solar radiation at nights (fossil fueled power plants are needed as back up) and large areas are needed for industrial scale solar projects; about 5 acres are needed for each MW of electricity generation. Take for example a 400 MW solar PV (Photovoltaic) project, approximately 2000 acres would be needed to implement such a project. If we're able to attract cash rich investors, the benefits will no doubt outweigh the negatives. Speaking of projects, WRB Enterprise Inc will be implementing Jamaica's first solar PV project, to supply 20 MW in Content Village, Clarendon.

Hydroelectric Energy

Jamaica's hydroelectric potential is relatively limited. We have approximately 24 MW in installed generating capacity, with the potential for an additional 100 MW. There have been recent suggestions about damming Bog Walk gorge as well as provisions to development hydroelectricity. Let's hope that investors will be sought to develop small scale (5-10 MW) projects across the island. 

Wind Energy

Jamaica has approximately 41.7 MW in installed wind energy capacity, this can be tripled as evident from this recent article: Jamaica Can Triple Wind Energy Output. 58 MW of wind energy will be added to the grid by 2015, more than twice the current capacity. 24 MW of additional capacity will be installed by Wigton Windfarm LTD and 34 MW by Blue Mountains Renewables LLC.

Coal Energy

Coal is a touchy subject in Jamaica, largely due to the various negative impacts. These negative impacts include: Significant air pollution, massive release of fossil fuels, Blackwater,...etc. While we cannot fully mitigate against some of these negatives, modern coal-fired power plants would have less environmental impacts than the old (in excess of 30 years old) heavy fuel oil plants that we are currently operating. Coal would also provide the greatest reduction of all the fossil fuel sources. If done properly, coal could be a viable option, especially in the short term.

Natural Gas

Natural gas is classified as the cleanest fossil fuel, at least relatively. Going forward, it seems as if natural gas will be the primary source of fuel. Jamaica is looking to secure a 30% reduction in the cost of electricity by 2016, especially with natural gas as a fuel source. Natural gas has to be shipped to Jamaica via LNG (Liquefied Natural Gas) tankers, this will increase the cost of delivery. These costs will determine the feasibility of a large scale natural gas project. However, with the recent failure to construct a 381 MW power plant, this could possibly change. 

If all these fuels sources are incorporated simultaneously, then Jamaica could significantly reduce the current cost of electricity. This would no doubt, foster job creation and economic growth. But most significantly, reduce our risks to external shocks.