Jamaica must bring energy costs down if it is to achieve sustained economic growth from now on and into the future...
(PRWEB) May 26, 2014
Executive Chairman of Cool Group of Companies and the largest indigenous distributor of petroleum products in Jamaica, Joe Issa, says in an interview that cheaper, sustainable and environmentally friendly energy is urgently needed for Jamaica’s growth agenda in 2014 and beyond, and every viable option must be vigourously pursued as the country seeks to increase energy efficiency and conservation for enhanced competitiveness in the regional and global markets.
Issa’s statement comes in the wake of the cancellation of a license given to Energy World International (EWI) to construct a 381-megawatt power plant for the Jamaica Public Service Company (JPSCo), the country’s distributor of electricity. The new plant, which is to replace some of JPSCo’s ageing facilities, is widely touted to significantly reduce Jamaica’s energy cost by some 30% through increased efficiency in fuel use.
“Jamaica must bring energy costs down if it is to achieve sustained economic growth from now on and into the future, and we must continue to search for the best, most efficient and effective solutions to the problems, and to do so with alacrity,” says Executive Chairman of Cool Group of Companies, Joe Issa.
Noting that JPSCo is hindered in reducing electricity costs because half of Jamaica’s generation capacity is over 30 years old and that they use the more expensive diesel-oil rather than the cheaper LNG (Liquefied Natural Gas), Issa underscores the urgency for the construction of new power plants.
“Right now much of the inefficiencies is caused by our old plants and they are the ones consuming most of our imported oil, so we are doomed if we do not replace them ... we need improved efficiencies in the conversion of primary fuels to electricity and we need efficiencies in its transportation, distribution and use,” Issa stresses.
He says the new plant will be a welcome relief for Jamaican consumers reeling from the high energy cost, especially manufacturers, who are paying over US$0.40 per kilowatt, which makes their products uncompetitive compared to our neighbour Trinidad and Tobago with a per-kilowatt cost of about US$0.12.
In expressing confidence in Jamaica’s new energy cost consciousness, Joey says, “I trust we in Jamaica will pursue a solution with the utmost urgency as the current JPSCo plant is drinking away precious and expensive oil.”
Jamaica is said to have lost much of its competitiveness over the years due to a number of factors, including the high price of oil, the volatility of which has left the country’s energy future precariously perched, according to a Jamaica Report prepared by Professor Clayton for the IANAS Energy Program Workshop in April 2012.
Traditionally dependent on petroleum supplies from Venezuela, Mexico, and Trinidad & Tobago, supplemented by purchases on the spot market, Jamaica has suffered immensely from oil price increases in the early 1970s and more recently, beginning in 1998 when the price of oil was just US$10/barrel. By 2008, it had reached US$147/barrel.
At the same time Jamaica was grappling with the global financial crisis, and the oil import bill that year was 49.6% higher than in 2007. For the first time, oil import cost surpassed Jamaica’s export earnings of US$771.3 million for the year.
Jamaica’s 2009-2030 National Energy Policy promised a period of reduced dependence on high-price imported oil by diversifying the energy base as well as significant improvement in energy efficiency. But Issa says five years later the price of energy is still very high, Jamaica’s appetite for oil is insatiable and increased energy efficiency remains an elusive dream.
In 2009 the significance of such inefficiencies was huge as oil imports was gobbling every dollar Jamaica earned from all foreign exchange sources and its energy intensity index of 21,152 BTU/US$1.00 was more than four times the global average of 4,600 BTU it took to produce US$1.00 of output.
The urgent need for the construction of the new power plant is further highlighted by the fact that the share of the three largest consumers of oil amounted to a massive 79.2% in 2008 - bauxite/alumina, 34.6%; power/electricity generation, 23.1%; and transport, 21.5%.
And with most of the aging plants being operated by the biggest consumers Issa, who had spoken of the centrality of energy in Jamaica’s development thrust, in his maiden address as chairman of the Petroleum Marketing Committee of the Private Sector Organization of Jamaica (PSOJ) in June 2010, says targeting energy efficiency will pay off big time in terms of economic growth.