Daraine Luton, Senior Staff Reporter
Energy World International Limited (EWI) will be selling power generated from the soon-to-be-built 360 megawatt plant to the Jamaica Public Service company (JPSco) at the base price of US$0.12.88 cents per kWh.
The price, which has been agreed, is 56 per cent less than the approximately US$0.30 cents on average which it costs to generate power. The total cost for generation and distribution of electricity is approximately $US$0.40.
Phillip Paulwell, the Minister of Science, Technology, Energy and Mining, said he understands that the agreed price is a ceiling, and if the price of natural gas falls, power could be sold to the JPS cheaper than US$0.12.88 cents per kWh.
"I think that is a tremendous win for the Jamaican consumer," Paulwell told The Gleaner.
Jamaica's peak demand for electricity is 600 megawatt, but Paulwell notes that the power produced by the 360 megawatt plant will be dispatched first.
The OUR approved the power purchase agreement on Wednesday, and Director General Albert Gordon said the regulators were working within an aggressive timeline, and so, "EWI will be pinned down to specific performance targets".
"The reduction in the price of electricity is a national imperative, so we look forward to the commencement of the construction of the plant at the earliest possible time," Gordon said
Work to start next year
Upon approval by the JPS' board of directors, the power purchase agreement will be formally executed, paving the way for the start of the project.
Construction of the plant is expected to begin in early 2014 and completed within 24 months.
Kelly Tomlin, president and CEO of the JPS, told The Gleaner yesterday that the inking of the agreement is good news for Jamaica.
"We have agreed to the base price of US$0.12.88, but our job in this environment is more to work out the technical terms of integrating the grid online," Tomlin said.
Paulwell said the building of the new power plant will lead to about 30 per cent reduction in energy prices and Tomlin said it will go a far way in lowering power prices.
"It will certainly help lower energy prices. I hate to give a percentage because there are so many things happening at once. People are going off the grid, doing wheeling, going solar, which drive up certain prices for the rest of us," Tomlin said.
She added: "When large scale users go off the grid, the overall price has to be distributed among the rest of us."