LETTERS: 'A CLEANER ENERGY FUTURE FOR JAMAICA'

Dear Dr. Horace Williams,

UTECH.

Thank you for your insightful response to my article in the Sunday Gleaner of September 8th, 2024. I appreciate your keen interest in the diversification of Jamaica's energy sector and your thoughtful questions regarding distribution and governmental control. Regarding the diversification of electricity distribution, you've touched upon a critical aspect of energy sector reform. While production diversification is often the focus, distribution plays an equally vital role in creating a competitive and efficient energy landscape. Several approaches can be considered:

1. Unbundling: Separating generation, transmission, and distribution functions can introduce competition at various levels of the electricity supply chain.

2. Open Access: Allowing third-party access to the distribution network can foster competition and innovation in retail electricity services.

3. Distributed Generation: Encouraging small-scale, localized power generation (e.g., rooftop solar) can reduce reliance on centralized distribution networks.

4. Smart Grid Technologies: Implementing advanced metering and grid management systems can improve efficiency and enable more flexible distribution models.

5. Mini-grids: Developing community-based power systems that can operate independently or in conjunction with the main grid.

Regarding Costa Rica and Puerto Rico, both countries have taken steps to diversify their energy production, but their approaches to distribution differ:Costa Rica has maintained a largely centralized distribution system under the state-owned utility ICE, but has allowed for some private participation in generation. The country has focused on modernizing its grid infrastructure to accommodate its high renewable energy penetration. Puerto Rico, following the devastation of Hurricane Maria, has been exploring more decentralized models. The island is considering dividing its grid into regional mini-grids and increasing private sector participation in both generation and distribution. On the matter of governmental control, Jamaica's past experience as a majority owner of the electricity utility offers valuable lessons. Some pros of governmental control include:

1. Ability to prioritize public interest over profit

2. Potential for long-term planning and investment

3. Coordination with broader national development goals

However, the cons can be significant:

1. Potential for political interference in operations

2. Inefficiencies due to lack of competitive pressure

3. Limited access to private capital for modernization and expansion

To mitigate these cons while maintaining some level of governmental oversight, several strategies could be considered:

1. Partial privatization with government retaining a minority stake

2. Establishing an independent regulatory body to oversee the sector

3. Implementing performance-based regulation to incentivize efficiency

4. Encouraging public-private partnerships for infrastructure development

5. Promoting transparency and public participation in decision-making processes

The optimal approach for Jamaica will depend on our specific circumstances, including our energy resources, economic conditions, and development goals. It's crucial to strike a balance between ensuring reliable, affordable electricity access for all Jamaicans and creating an environment that fosters innovation and efficiency in the sector. I appreciate your engagement on this important topic, Dr. Williams. Your questions highlight the complexity of energy sector reform and the need for a comprehensive approach that addresses both production and distribution. I look forward to exploring these issues further in future articles and discussions. Thank you for your valuable input and for helping to advance this critical conversation for Jamaica's future.

Best regards,

Tank you for the benefit of your time

Dennis A Minott, PhD, MISES.

Verde Siempre and ENERPLAN Group