Dennis Minott | Are JPS and other interests deliberately slowing renewable energy?

In this 2019 photo, a man walks past the Jamaica Public Service offices on Knutsford Boulevard in New Kingston.

Jamaica’s transition to renewable energy is a critical discussion, with the Jamaica Public Service Company (JPS) at the centre. While JPS has made public commitments, some argue their actions may very deliberately impede progress. This article explores this tension: could JPS, for understandable commercial reasons, be intentionally slowing the development of renewable energy in Jamaica?

JPS ROLE AND COMMITMENTS

JPS has pledged to reduce fossil fuel reliance and increase renewable energy in the national grid. It has invested in wind and solar farms, with plans for nearly 300 megawatts of additional renewable capacity. These initiatives align with the government’s 2030 target of 50 per cent renewable energy generation.

Despite these commitments, easily removable obstacles hinder widespread renewable energy adoption. Kenton Palmer, in his article in In Focus of July 14, ‘Is JPS unwittingly an obstacle to alternative energy?’, identifies key barriers suggesting JPS’s policies might not fully support renewables.

High import duties on solar equipment: Despite some government efforts, high import duties, particularly on solar batteries (up to 40 per cent of installation costs), create financial risks and deter investment.

Grid connection costs and red tape: Connecting solar systems to the grid is expensive (around J$150,000) and involves extensive red tape. This, coupled with technical requirements for grid-tied systems, discourages consumer adoption.

Net billing system: The current system disproportionately benefits JPS. It buys energy from solar or other green customer/suppliers at a significantly lower rate than they sell, leading to financial losses for those who invested in solar or other renewables.

POTENTIAL MOTIVATIONS

Given these challenges, it’s worth considering if JPS has vested commercial incentives to slow renewable energy:

Profit margins: JPS’ current model relies heavily on fossil fuel sales. Transitioning to a model where consumers generate their own electricity could reduce their revenue and profit margins.

Infrastructure investments: Investing in large-scale renewable projects requires significant capital. The high initial costs and long payback periods deter JPS from accelerating the shift away from fossil fuels.

Regulatory environment: The National Renewable Energy Policy (2009-2030) can be criticised for lacking concrete action plans. Slow implementation of promised incentives further complicates the situation. JPS, as a key stakeholder, would be sorely tempted to leverage this environment to maintain its commercial interests.

PROPOSED SOLUTIONS

To accelerate renewable energy development, several solutions are proposed:

Remove duties on solar equipment: Eliminating these duties would make green investments more affordable and encourage wider adoption.

Implement net metering: Switching from net billing would allow consumers to receive full credit for their energy production, making green power more financially viable.

Financing through National Housing Trust (NHT): The NHT, and even indirectly via the hallowed Consolidated Fund, could act as one-stop shops, retailing public and private funds for renewable energy projects. Government guarantees could further reduce costs.

Incentive programmes for businesses: Programmes encouraging businesses to fund renewable projects could stimulate investment. Models where companies lease equipment or provide financial assistance could be effective.

Public sector commitment: Leading by example, the Jamaican public sector could, with great facility, transition to full reliance on renewable energy. Given their scale, the payback period could be as short as two years, leading to significant long-term savings.

INTERNATIONAL EXAMPLES

There are indeed several successful examples of countries where the primary electricity provider actively supported renewable energy development. Here are nine notable cases:

Sweden: The country reached its target of 50 per cent renewable energy eight years ahead of schedule in 2012 and is on track to achieve 100 per cent fossil-free renewable electricity production by 2040. This success has been supported by the country’s main electricity providers leveraging a combination of wind, bioenergy, solar, and even innovative solutions like using body heat from commuters to heat buildings.

Costa Rica (of stable democracy, progressive social policy especially in education, ecology and ecotourism fame): Little Costa Rica’s primary electricity provider, El Instituto Costarricense de Electricidad (ICE), has been instrumental in achieving an impressive 98 per cent of electricity production from renewable sources for over eight consecutive years. They utilise a mix of hydro, geothermal, wind, biomass, and solar power.

Costa Rica’s 98 per cent renewable energy achievement since 2014, comes from a mix of hydropower (67.5 per cent), wind power (17.0 per cent), and geothermal power (13.5 per cent) See Ranked:Latin American Countries by Green Energy Use.. They already have the operational capacity to replace all geothermal with power from biomass. To, like Uruguay already does, export power to neighbouring countries because of their dogged adherence to wise human-friendly policies.

United Kingdom: The UK’s primary electricity providers have actively supported the country’s transition to renewable energy, particularly in offshore wind. The UK is now the global leader in offshore wind energy, with plans to increase capacity fourfold by 2030.

Iceland: The country’s main energy companies have leveraged Iceland’s unique geothermal and hydropower resources to provide almost 100 per cent of the country’s electricity from renewable sources. Geothermal power (not a renewable) alone heats nine out of 10 homes in Iceland.

Germany: The country’s major utilities have been pivotal in Germany’s renewable energy transition. In 2022, renewables accounted for 46.9 per cent of German power consumption, with ambitious targets set for 80 per cent by 2030 and close to 100 per cent by 2035.

Uruguay: The state-owned electric company, UTE, has been a key player in Uruguay’s renewable energy revolution. The country now generates 91 per cent of its electricity from renewable sources, with a significant increase in wind power from 1 per cent to 34 per cent of its electricity mix in just five years.

Denmark: The country’s main energy providers have been instrumental in making Denmark a world leader in wind energy. Vestas Wind Systems, a Danish company, is one of the world’s largest wind turbine manufacturers and has played a crucial role in the country’s renewable energy success.

Spain: Achieved over 81 per cent of grid-supplied electricity purely from renewables earlier this month, and is well on its way to achieving over 100 per cent by the end of 2025.

Norway: Almost all of the country’s electricity is produced from renewable sources, mainly hydropower, thanks to robust government policies and proactive efforts from the country’s main electricity providers.

While JPS has made some dainty PR moves yet significant removable obstacles and objectionable matters remain, suggesting the company and government may be slowing the development of green renewable energy sources. Addressing these issues through policy reforms, financial incentives, and public sector leadership is crucial to accelerate Jamaica’s transition to a sustainable energy future. Whether JPS is deliberately slowing progress or navigating a complex environment, the need for decisive action and policy reform is as clear as day.

Dem JPS smaddy really need fi stop chat wid wata inna dem mout’! All a wi ah no fool.

by Dennis A Minott, PhD.

July 17, 2024

Dennis A. Minott, PhD, is the CEO of A-QuEST-FAIR. He is a renewable energy specialist and worked in the oil and energy sector. Send feedback to columns@gleanerjm.com