JAMAICA NEEDS to remove its heavy dependency on expensive imported oil, replace ageing oil burning production assets and diversify to more economical fuel sources and modern technology if it intends to break the stranglehold of high-energy cost.
This, according to Valentine Fagan, power system engineer and vice-president of generation expansion at the Jamaica Public Service Company.
Fagan was speaking on Tuesday at the first in a series of conversations about energy: Finding Jamaica's Optimal Energy Solutions for Growth, hosted at The Jamaica Pegasus hotel in St Andrew.
He noted that in order to achieve optimal efficiency and resolve Jamaica's plaguing energy problem, the country needs the 360-megawatt base load natural gas plant to come on stream according to schedule; conversion of the Bogue 120-megawatt plant from combined cycle to natural gas; and an additional 121-megawatt of renewable energy plants.
Fagan said a realistic energy mix for Jamaica would be 66 per cent liquefied natural gas (LNG), 25 per cent heavy fuel oil and nine per cent renewable energy by 2016, and by the year 2022, 85 per cent LNG, seven per cent coal/petcoke and eight per cent renewable.
"As a small country, we have just a few real choices. These include efficient conventional project and economic renewable solutions. Considerable amount of capital and expertise are needed to develop bankable projects and the nature of energy investment is such that they require long-term commitment, economic and social environment, given that the investments are usually irreversible," noted Fagan.
leading factor in business failure
Jamaica's electricity sector is the major user of fuel. Currently, more than 90 per cent of electricity is produced by imported fuel oil.
He noted that over a 10-year period, Jamaica's fuel tariff increased to just under 300 per cent, moving from 6.4 per cent in 2001 to 23.6 per cent in 2011.
Christopher Zacca, president of the Private Sector Organisation of Jamaica, noted that the high cost of energy was the leading factor in business failure among medium, small and micro enterprises.
"Energy has absolutely been one of our key concerns and we are very painfully aware that the high cost affects our ability to be internationally competitive and negatively impacts the productivity of our business sector," Zacca said.
"It is without a doubt, therefore, one of the most serious impediments to growth and job creation facing our country today."