Dear Editor,
In 2000 Jamaica was on the verge of implementing a coal power plant project. All the engineering had been done and negotiations with the equipment supplier and the financier were essentially complete.
That project would have been financed by China Ex-Im Bank at a very low interest rate of two per cent. However, we moved away from that project and started to look at LNG as an alternative fuel. In the intervening years there have been several occasions when we have come close, oh so close, to actually implementing a major fuel diversification power plant project with LNG, coal and petcoke as the possible fuels for these projects.
However, every time we have come to the brink of actually commencing one of these projects, like a commitment-shy bachelor or runaway bride, we have aborted the project and instead flirted with seemingly attractive alternatives. Consequently, since 2000 we have achieved nothing of significance in respect of fuel diversification despite the many grandiose announcements in this regard. Instead we have added almost 300 megawatts of new-oil fired capacity. With the benefit of hindsight, it is abundantly clear that had we simply taken the plunge and moved forward with any of these aborted power projects, the country would today be enjoying lower electricity prices.
However, every time we have come to the brink of actually commencing one of these projects, like a commitment-shy bachelor or runaway bride, we have aborted the project and instead flirted with seemingly attractive alternatives. Consequently, since 2000 we have achieved nothing of significance in respect of fuel diversification despite the many grandiose announcements in this regard. Instead we have added almost 300 megawatts of new-oil fired capacity. With the benefit of hindsight, it is abundantly clear that had we simply taken the plunge and moved forward with any of these aborted power projects, the country would today be enjoying lower electricity prices.
Despite the clear lessons of recent history, the country is about to abort yet another power project that is almost ready to break ground. News reports suggest that the energy minister is about to abandon the 360-megawatt natural gas-fired power project. This is despite the advice of JPS that this project, which can be implemented in 27 months, would lower electricity prices for Jamaican consumers by 20 per cent.
Having to go through a tender process, commercial and financial negotiations, environmental permits and construction, it is highly unlikely that any feasible alternative can be implemented in less than five years. Therefore any move away from the 360-megawatt project will undoubtedly further delay the prospect of lower electricity prices for Jamaicans.
For many years Jamaica has been behaving as if we have the luxury of time to deal with our energy situation and thus we willy-nilly cancel projects that are in advanced stages. The fact is we have no such luxury. It is frightening that successive governments have failed to appreciate the urgency of dealing with our energy crisis in a context where our oil bill exceeds the value of all our exports combined.
IMF agreements will be of little use if we don't take important steps to restructure our economy, such as reducing our energy import bill. Especially in a situation where the future of the PetroCaribe arrangement is in doubt due to President Chavez's ill health, it would be an act of gross stupidity to pin Jamaica to oil for an extra three years. The best option is to move forward with the 360-megawatt project now in train while holding JPS to their commitment that this project can lower our electricity bills by 20 per cent. Moving forward with the 360-megawatt project now does not preclude us looking at alternatives such as coal and petcoke for future implementation.
It is a fallacy of successive administrations that our fuel diversification options are mutually exclusive. There is no reason why we can't have a mix of LNG, coal and petcoke. If we had not aborted that coal project back in 2000, we would now be well on our way in this regard. We should not again make the stupid mistake of aborting a certain project for uncertain prospects.
Stephen Wedderburn
stephen.wedderburn@gmail.com
Let's have the right fuel mix
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In 2000 Jamaica was on the verge of implementing a coal power plant project. All the engineering had been done and negotiations with the equipment supplier and the financier were essentially complete.
That project would have been financed by China Ex-Im Bank at a very low interest rate of two per cent. However, we moved away from that project and started to look at LNG as an alternative fuel. In the intervening years there have been several occasions when we have come close, oh so close, to actually implementing a major fuel diversification power plant project with LNG, coal and petcoke as the possible fuels for these projects.
However, every time we have come to the brink of actually commencing one of these projects, like a commitment-shy bachelor or runaway bride, we have aborted the project and instead flirted with seemingly attractive alternatives. Consequently, since 2000 we have achieved nothing of significance in respect of fuel diversification despite the many grandiose announcements in this regard. Instead we have added almost 300 megawatts of new-oil fired capacity. With the benefit of hindsight, it is abundantly clear that had we simply taken the plunge and moved forward with any of these aborted power projects, the country would today be enjoying lower electricity prices.
However, every time we have come to the brink of actually commencing one of these projects, like a commitment-shy bachelor or runaway bride, we have aborted the project and instead flirted with seemingly attractive alternatives. Consequently, since 2000 we have achieved nothing of significance in respect of fuel diversification despite the many grandiose announcements in this regard. Instead we have added almost 300 megawatts of new-oil fired capacity. With the benefit of hindsight, it is abundantly clear that had we simply taken the plunge and moved forward with any of these aborted power projects, the country would today be enjoying lower electricity prices.
Despite the clear lessons of recent history, the country is about to abort yet another power project that is almost ready to break ground. News reports suggest that the energy minister is about to abandon the 360-megawatt natural gas-fired power project. This is despite the advice of JPS that this project, which can be implemented in 27 months, would lower electricity prices for Jamaican consumers by 20 per cent.
Having to go through a tender process, commercial and financial negotiations, environmental permits and construction, it is highly unlikely that any feasible alternative can be implemented in less than five years. Therefore any move away from the 360-megawatt project will undoubtedly further delay the prospect of lower electricity prices for Jamaicans.
For many years Jamaica has been behaving as if we have the luxury of time to deal with our energy situation and thus we willy-nilly cancel projects that are in advanced stages. The fact is we have no such luxury. It is frightening that successive governments have failed to appreciate the urgency of dealing with our energy crisis in a context where our oil bill exceeds the value of all our exports combined.
IMF agreements will be of little use if we don't take important steps to restructure our economy, such as reducing our energy import bill. Especially in a situation where the future of the PetroCaribe arrangement is in doubt due to President Chavez's ill health, it would be an act of gross stupidity to pin Jamaica to oil for an extra three years. The best option is to move forward with the 360-megawatt project now in train while holding JPS to their commitment that this project can lower our electricity bills by 20 per cent. Moving forward with the 360-megawatt project now does not preclude us looking at alternatives such as coal and petcoke for future implementation.
It is a fallacy of successive administrations that our fuel diversification options are mutually exclusive. There is no reason why we can't have a mix of LNG, coal and petcoke. If we had not aborted that coal project back in 2000, we would now be well on our way in this regard. We should not again make the stupid mistake of aborting a certain project for uncertain prospects.
Stephen Wedderburn
stephen.wedderburn@gmail.com
Let's have the right fuel mix
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