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Jamaica’s energy policy: Obstruction or boost to wind and solar?

Government. Government could lead the transformation by example, mandating that all government-owned and -operated buildings, as well as the two international airports be powered by renewables. This, in addition to other measures articulated in my five previous pieces — including changing the power bidding policy-mandate to emphasise savings of fuel importation ahead of lowest cost of power, legalising income-producing crowd-funding for renewable projects by approved non-bank entities, and creating foreign exchange renewable energy investor accounts for taxpayers — would undoubtedly build investor confidence and attract low-cost capital. Other smaller policies are needed, but space does not permit.

Conversely, the greatest threat to speedy adoption of lots of wind and solar could be bad government policy. Already the clouds are gathering, driven by the old-guard fossil fuel-knowledgeable government and private sector moguls who grew up the technology, and who seem unable to free their minds from the old ways of thinking — baseload generation from centrally supplied generators with some renewables incorporated into the existing system. They lurch from fuel to fuel (“fuel flexibility” in their words) as the price competiveness of these fuels change (and flip-flop). The assumption here is that renewables cannot provide baseload, and if they did, the price would be too high.

 

Even the Office of Utilities Regulation (OUR) is infected with this erroneous thinking. They have put out separate tenders for auctions for large baseload replacement amounts, and relegate solar and wind to much smaller auction amounts. This bad assumption is promulgated by the old-guard JPS types, including a previous Regulator-General who before that was the managing director of JPS and who still thinks that coal is our lowest-cost and best alternative. He made this clear in his writings in Jamaica’s other daily newspaper. Go figure.

Coal is probably our worst nightmare, next to nuclear, as apart from high imported prices in Jamaica, it is the worst emitter of particles into the atmosphere. Over 40 per cent of all CO2 pollutants worldwide are due to coal from power plants. China, the emitter of 30 per cent of all global emissions, has come to terms with this and is now shutting down some coal-fired plants and replacing them with wind and solar, the clean technologies that have the ability to ramp up installations the fastest and cheapest. Over 16,000 megawatts (16 GW) of solar was erected in China last year alone, and even larger amounts of wind installations. India, the third largest global emitter and a major coal producer, is doing likewise.

Now, if rumours (and I have to say rumours since the Government is stubbornly refusing to divulge details of its plans) are true that the Chinese investors interested in Goat Islands intend to build a coal-fired plant there are true, it would be a major contradiction of China’s actions in its own country. I mean, why would China be jettisoning coal power on its shores, but building costly, polluting plants here? Why would we allow them to do that? Why are we waiting for multilaterals to dictate the way, while we pack our energy councils with old-style proponents?

There may, however, be a light at the end of tunnel as recently, Jamalco did an about-turn on its previously announced plans to build a coal-fired plant to supply its bauxite processing operations in Clarendon.

I note with great dismay, though that the OUR’s independence is being taken away. The recent move by Government to legislate that our regulator be brought under “supervision” or “oversight” or whatever other terminology they choose to use. Simply put, no longer will an independent body with trained, objective-minded expertise determine the course of future action for JPS. They will now come under political direction. Keep the oversight, yes, but for rational and economic review, not political decision making.

This loss of independence is potentially our greatest step backward for energy direction in the island. Where there are independent regulators everywhere in the world, governments set broad or specific policy direction through the parliament, and the regulator interprets those policies and find the best courses to follow. No more in Jamaica, it seems. Even the determination of capital rates in energy is being dictated to the OUR as reported in the local press, forcing them to use BOJ figures. So the thinking of JPS and their proponents could likely continue to prevail, slowing down and deferring solar and wind adoption into the future. We have done this with the complicity of our private-sector organisations, who flex their muscles even though they have no up-to-date specialist knowledge in energy matters. Our private-sector trade group leaders know more about energy than the OUR? – Pun intended.

The Jamaican Parliament is notorious for not “grandfathering” existing legislation and contracts when enacting changes to same, leading to unstable and reversible back-dated policy for investors who can suddenly awake one morning to find their existing investment terms have been altered to their detriment, having already spent their monies.

Be mindful of the experience of Spain in this regard, which up to then was the world leader in large-scale solar thermal, as well as then solar-booming Italy and their neighbours in the sunny southern regions of Europe. Developers that do large-scale solar now avoid these countries like the plague, due to bad and shifting policy that resulted when new parliaments retroactively slashed the prices of pre-existing renewables contracts. Yes, they did! Only parliaments have that power, independent regulators do not. Frustratingly, all litigation by use of the power of parliament. We all know how fickle our parliament has been through the years. I personally bear the scars of numerous bad Jamaican Gov’t policies.

Be afraid, be very afraid!

There is also bad governmental policy in Australia that ironically has caused their domestically sourced fossil-fuelled electricity to be as high as Jamaican prices. Here, they instituted “pay-even-if-we-don’t-take” policies for mainly indigenously sourced large coal and natural gas plants — assuming lowest cost at the time. Now that cheaper renewable alternatives are available and producing in preference to older fossil plants, this continued payment policy has resulted in electricity prices in the mid-thirty cents range. Natural gas in Australia is not low cost, even though they produce their own NG. So they continue to pay full-price for electrical output of these old contracts that produce no electricity but are technically “not shut”, from mainly Australian-mined coal-fired plants. Go figure!

These bad occurrences are not limited to a few countries. There are numerous cases in regional and State governments in the USA that have used bad policy to weaken or stall the adoption of renewables there. I could give you innumerable instances, largely instigated by two brothers that channel their fossil fuel dollars to disrupt the adoption of competing renewables via ALEC and other well-sounding organisations, funding government legislators at all types of government (similar to our MP’s) who feel constrained to do their bidding. These brothers are now funding the 2016 presidential Republican candidates to the tune of over US$950 million by their estimation. In Republican-governed Florida, the Sunshine State, the words “climate change” have been made illegal for government employees who could be fired for uttering them, right along with banning solar until just a few months ago …and it took grass-roots petitions to overturn the solar ban even at the household level.

My “pumped storage leading expert” reported high levels of scepticism from international pumped-storage developers about doing business in Jamaica, due to doubts about stable regulatory policies long before this OUR occurrence.

Bad policy prevails when we remove the independence of regulators and substitute political control. We could quickly lose our leadership position in the Caribbean — where our 2030 energy plan and adoption of some wind and solar to date have made us a shining beacon of hope — as a result of bad government policy.

Remember our former government attempts at taxing already existing satellite dishes in the 1980s? Talk about bad policy!, If for no other reason than ensuring we retain our individual independence, I strongly recommend the adoption of your own solar wherever and whenever possible. Adios for now.

Source:  http://www.jamaicaobserver.com/environment/Jamaica-s-energy-policy–Obstruction-or-boost-to-wind-and-solar-_65002



Category/ies:Jamaica News, News, Renewable Energy, Wind energy.
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