The public discourse on the 360-megawatt project, fuelled mainly by an abundance of misinformation, has the ability to sap the energy of all well-thinking Jamaicans who have been set up by successive governments to expect a 40 per cent reduction in electricity cost.
Jamaica is currently paying US$0.42 cents per kilowatt-hour for electricity, and the problem-plagued 360-megawatt plant is expected to engineer a drastic reduction in the cost of power to consumers.
Last week, the Office of Utilities Regulation (OUR) announced that the Hong Kong-based Energy World International (EWI) posted its bid security as a condition of its selection as the preferred bidder in the baseload-generating capacity project.
The US$7.37-million bond represents one per cent of the total cost of the project, which is US$737 million. Having paid the bid bond, EWI will now have to commence negotiations with the Jamaica Public Service Company Limited (JPS) with a view to signing a power-purchase agreement, finalise a fuel-supply agreement for the project, as well as meet and present all the statutory requirements needed to achieve financial closure to allow for the commencement of construction.
According to an OUR report, EWI, during its first two years, will use heavy fuel oil to produce electricity at US 14.56 cents, which is nearly seven cents cheaper than what Energize Ltd - a consortium that includes the Jamaican firms Tank-Weld and Mussons Jamaica - said it can provide power.
After the first two years of operation, EWI says it would switch to gas and produce power at a cheaper rate.
But even if EWI is able to deliver on the project in the manner in which it has said, there are no guarantees that Jamaicans will see the much-promised massive reductions in the price of electricity.
The Government has been seeking to add 480MW of new generating capacity to the grid, and in the process replace 292MW of capacity which is being provided by obsolete plants, some more than 30 years old. Energy Minister Phillip Paulwell has said that Jamaica has no future unless energy prices are reduced to between US$0.15 and US$0.20 cents. The possibilities, as served up by EWI, do not offer much hope, especially when one considers that distribution losses are not yet taken into account.
Also, one will need to compute the cost of providing power through renewables, as well as the cost of running the Bogue and west Kingston power plants on diesel and heavy fuel oil.
In this context, The Gavel believes Minister Paulwell has no choice now but to enlighten our darkness. The minister should stop hiding behind the OUR and the Energy Council and commit to, in short order, a debate in the Parliament to clearly outline to Jamaicans how much they should expect to pay for electricity in the future.
The debate for which we call should not be an emotional one. Paulwell, as well as all other participants in the debate, must come to the country with real numbers, real projections, and a real plan to reduce the cost of energy.
We also hope that Karl Samuda, the chairman of the Economy and Production Committee, will find it more than useful to have his team subpoena all relevant parties and to consider the issue. Samuda should write to players such as the Petroleum Corporation of Jamaica, Wigton Windfarm, the JPS, the OUR and all private power providers with a view of putting together a matrix on the potential price for electricity.
We want to be relieved that this bag of talk about expecting 30 to 40 per cent reduction in power cost is not grounded in facts, but is rather a figment of the imagination.
Surely, The Gavel wants to be proven wrong, and we hope Paulwell will find it necessary to disabuse our minds of the suspicions we harbour.
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