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US energy boost - Jamaica to benefit from US$90m clean-power project

Published:Tuesday | January 27, 2015 | 1:00 AM

The White House yesterday announced that the US Overseas Private Investment Corporation (OPIC) would intensify its focus on developing green-energy projects in the Caribbean and that Jamaica is to be the largest beneficiary.

The US Department of the Interior and the Department of State are working with Jamaica to facilitate commercial renewable energy on public lands.

OPIC, the White House said, will disburse the first tranche of approximately US$43 million in financing for Blue Mountain Renewables' 34-megawatt wind project.

As part of its push to fostering a cleaner and more sustainable energy future in the Caribbean, the Department of State has identified a team with specific responsibility for identifying and arranging financing for Caribbean projects.

When construction begins in June, the Blue Mountain Renewables project will be a tangible example of public and private sectors in both countries working in harmony - and nearly US$90 million of investment in Jamaica's economy, which also will ease Jamaica's dependence on fossil fuels, the White House said.

Three bidders have been selected by the Office of Utilities Regulation (OUR) to provide a total of 78MW renewable capacity to the national grid.

Blue Mountain Renewables LLC is to supply 34MW of capacity from wind power at Munro, St Elizabeth; Wigton Windfarm Limited is to supply 24MW of capacity from wind power at Rose Hill, Manchester; and WRB Enterprises Inc to supply 20MW of capacity from solar PV from facilities in Content Village, Clarendon.

First Energy Summit

United States Vice President Joe Biden had hosted leaders from across the Caribbean in Washington, DC, for the first-ever Caribbean Energy Security Summit.

Included on the agenda was a slew of new projects, led by a World Bank proposal to create a Caribbean Energy Investment Network to improve "energy and communication" between development partners in the region.

Jamaica will see the largest effort in that regard with the planned Jamaica Clean Energy Programme, which "aims to establish the preconditions for clean energy development".

Jamaica's Prime Minister Portia Simpson Miller, who, along with Energy Minister Phillip Paulwell, attended the summit, commended OPIC for financing the investment.

The project is one of the first investments from the new US$700-million OPIC fund to encourage clean energy.

Jamaica's Efforts

Simpson Miller pointed to Jamaica's ongoing efforts to respond to its serious energy challenges. This, she noted, includes the diversification of the fuel used to produce electricity and industrial steam power and increasing the use of renewables in the country's energy mix, primarily from wind and solar.

Jamaica is also increasing the efficiency of the generation, transmission and distribution of electricity, through, among other things, the replacement of outmoded units and the modernisation of others, the prime minister said.

She added that the Jamaican Government was promoting conservation in the use of energy in homes, offices, factories, farms and transport.

"Before the recent reductions in oil prices, energy represented more than one-third of our total import bill, accounting for more than 125 per cent of our total merchandise exports," Simpson Miller outlined.

She added that the adverse impact of high oil prices has been felt throughout the economy-constraining foreign exchange reserves and causing a lag in the competitiveness of major, energy-intensive industries such as bauxite and alumina, which is the largest industrial activity in the country requiring both electricity and steam for its operations.

"In respect of the mining sector, there has been the closure of two million tonnes of annual alumina capacity since 2009 as a direct result of the high cost of energy. This is equivalent to US$700 million of gross annual export earnings," Simpson Miller said.

"With the money spent on electricity, petrol and liquefied petroleum gas for cooking, the disposable incomes of individuals and businesses have been suppressed. This, in turn, adversely affects local economic activities, as people simply have less money to spend on both locally produced goods and services and imports."