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Investors wanting to build out renewable energy capacity

INVESTORS wanting to build out renewable energy capacity in the latest round of investments in Jamaica will have to do so by early 2015.

Up to 115 megawatts (MW) are up for grabs.


Those who are interested to make bids will have to declare that to the Office of Utilities Regulations (OUR) by December 21.

But the request for proposal documents has set tariff caps, which could make investments in certain types of renewables lucrative, but could also mean higher electricity prices to consumers.

What’s more, even with the seemingly fast pace at which the regulator is pushing for renewables to come online — it closes off bids by next April and hopes to see generation plants up and running by May 2015 — the target will hardly dent Jamaica’s thirst for hydrocarbons.

The OUR’s request for proposal (RFP) said that proposals will be evaluated using “indicative maximum tariff rates” for the various types of renewables.

Hydro power carries the lowest ceiling of 11.13 US cents per kilowatt-hour (kWh), while utility scale photovoltaic carries a maximum cap of 26.73 US cents.

Wind, waste-to-energy, and bagasse had ceilings ranging from 13.36 US cents to 15.16 US cents per kWh.

Coming close to the upper limit of even the lowest rate — for hydro — would feed into higher rates to consumers.

The sole distributor of light, Jamaica Public Service Company (JPS), charges a separate rate for getting electricity to homes and businesses over its power lines.

The energy only rate ranges from 10 to 15 US cents now, depending on how much electricity is consumed.

Assuming it goes up, as has been the case historically, the minimum contribution of renewables to electricity cost to consumers may trend closer to 26 US cents per kWh.

Currently, approximately 64 MW of the 930 MW installed generating capacity in Jamaica is made up of wind and hydroelectric generators.

Another 6.4 MW hydro plant in Magotty, St Elizabeth, is set to come online next year. Adding another 115MW to that amount would substantially increase the proportion of electricity generated by renewables.

However, JPS’s owners are bringing 360 MW of capacity to be fired by natural gas on stream by 2015, to replace older and less efficient plants, which are rated at 292 MW, and add 68 MW to the grid.

The net effect is that just under 90 per cent of Jamaica’s capacity will still use carbon-based fuels. Moreover, even less of the actual power used will be from renewables.

The RFP is asking for 37 MW in firm capacity, to provide half of the added 416,956 megawatt-hour (MWh) to be generated by renewables.

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Category/ies:Jamaica News.
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