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Jamaica’s OUR gets ready for more renewable energy

The Office of Utilities Regulation (OUR) is awaiting the tabling of an energy green paper in Parliament before inviting proposals for the production of an additional 60 kilowatt-hour (kWh) of electricity.

 

Energy Minister James Robertson is due to table the green paper on energy this week. The paper is expected to signal Government’s preference for liquefied natural gas as the preferred choice of fuel today.

 

“We have almost completed our request for a proposal to build new capacity, and as soon as we have the green light, we will immediately open up,” Zia Mian, director general of the OUR, said during a Gleaner Editors’ Forum last week.

 

Already, there are plans to add an additional 60 megawatts of electricity to the national grid. The OUR has said it expects this additional capacity to be available within the next 36-42 months.

 

The national development plan – Vision 2030 – speaks to the desire to increase the amount of renewable energy being used from 4.7 per cent in 2007 to 10 per cent in 2010. The development blueprint also indicates the desire to commission new renewable energy projects with a total capacity of up to 70 MW by 2012, and increase renewable energy to 15 per cent of energy mix by 2020.

 

Could be expensive

 

However, Mian, an energy guru, has warned that the policy to increase renewable energy could be an expensive venture.

 

“Renewable will never be cheap and the Government must understand that,” Mian said.

 

He added: “You make a policy, you say you want 20 per cent renewable, then the consumers must be prepared to pay for that. This is not America, this is not Europe.”

 

Jamaica began its major push towards greater use of renewable energy in 2004 when the Government opened the Wigton Wind Farm.

 

However, despite massive investment, Wigton has barely been able to pay its bills. When the company began operations, it entered into a 20-year power-purchase agreement with the Jamaica Pubic Service Company to sell all the electricity generated by the wind farm at US$5.5/kWh.

 

Earlier this year, Dr Ruth Potopsingh, director general at the Petroleum Corporation of Jamaica (PCJ), said the price being paid for renewable energy was a disincentive to potential investors.

 

“Our wind farm has been losing money because we are not able to secure a good enough return on the investment because of the low power-purchase agreement,” Potopsingh said.

 

“If you don’t get good returns, you are not going to get private investors,” she added.

 

Robertson has said that the new energy policy would drive a return to investment.

 

“It allows the OUR to set rates that will encourage investments,” the energy minister said.

 

The OUR head has already signalled that the country needs new power investments. Mian has said that the national grid is in need of 300-400 megawatts in order to make up for inefficient power production at some old plants.


Source: Jamaica Gleaner



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