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LETTER OF THE DAY – OUR Must Revisit Renewable Energy Capacity Offer

 

THE EDITOR, Sir:The partial award of much-needed renewable energy capacity by the Office of Utilities Regulation (OUR) is nonsense. Minister Paulwell should be supported in his urging for the OUR to revise the decision (Gleaner, 4/10/13).

 

Given the overwhelming response to the renewable energy request for proposal (RFP), it passes understanding how the OUR has chosen to award only a part of the 115MW requested.

 

Other qualified bidders should be allowed to fill the gap in the award. A selection of more credible projects would mean better chances of having them implemented in the near future. The suggested retendering for the balance of 37MW will only delay the addition of this capacity by years and require further commitment of scarce government resources to administer a new process when we have qualified investors ready now.

 

REPEATING A FUTILE PROCESS

 

Why delay ready-to-go investors in the hope that another tender, exactly like the one that yielded no results, will be so different the next time? The OUR’s selection for the renewable energy RFP towards the development and greater use of domestic Jamaican renewable energy resources is laudable, but we need more now.

 

The OUR’s decision for the 115MW project has effectively crowded out private-sector investment. The selection is for wind from two companies amounting to 58MW, and solar from one amounting to 20MW – a total capacity of 78MW.

 

There is strong support for wind energy where appropriate, but why does the future development of a government entity, Wigton, need to compete with private investors when it can continue with its direct negotiation with the Jamaica Public Service Company?

 

While the country is living through the cuts demanded by the International Monetary Fund agreement, Government should not be spending resources to push out private investment from improving the ailing power sector. The desire for expansion of government entities need not come at the expense of private investors. Where energy is concerned, the need is so great and urgent that the country cannot afford to turn away private initiatives to wait for the development of domestic resources.

 

ON WEAK GROUND

 

A complementary folly is the decision on the 360MW project where the process is on weak ground. Regardless of one’s opinion of the selection of Azurest for the 360MW baseload process, the independent consultant has indicated that the financial strength of all of the 360MW bidders was tenuous and the projects might not move forward because of the weak financial capabilities of the sponsors.

 

Why not mitigate the loss from the very real risk that the 360MW efforts will be delayed yet again and look to a non-competing safety buffer? Awards sit unutilised at the same time as unqualified applicants bumble their way through project development and project finance.

 

The OUR must be mindful of the realities of the time and act appropriately.

 

FRANK PHIPPS (QC)

 

frank.phipps@yahoo.com

 

Source: http://jamaica-gleaner.com/gleaner/20131005/letters/letters1.html



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