THE MAIN REASONS WHY JAMAICANS PAY SOME OF THE HIGHEST ELECTRICITY COST IN THE WORLD (2015)

Can't understand the persistent high electricity prices in Jamaica. “On his 2015 visit to Jamaica President Obama and his administration took the strategic decision to license Jamaica as the first country outside the North American Free Trade Area (NAFTA) for the export of US LNG and for Jamaica to become the Hub for America’s Energy Exports to Latin America and the Caribbean.”

JPS generates some 474 MW of electricity with net sales of 344 MW. It is currently building a 310 MW (120 MW in Montego Bay and 190 MW in St. Catherine) LNG capacity at different stages of development. This is equivalent to 9.3 million BTU's or 2.7 Million MWH at an average spot price of US$5.00/mmbtu or fuel cost of US$42 Million. In full operation, this is a reduction in fuel cost by US$702 Million or around 94%

The high electricity cost in Jamaica has to do with the fact that JPS loses close to or the equivalent of 1.9 million barrels of oil from having an energy infrastructure that is inefficient and nearing its useful economic life; remaining economic life of 12-14 years. The Plain Truth is JPS's Operating Statement only tells half the story. The Company loses some 3,074,410 Megawatt Hours of Electricity or 346 MW, equivalent to 1.9 million barrels of oil through some of the most inefficient generating systems. In fact, they produce around 820 Megawatt or Just over 7.1 Million Megawatt Hours and only deliver 474 Megawatt. From the 474 Megawatt produced they lose another 1,095,811 Megawatt Hours or equivalent to over 670,000 barrels of oil.

If renewable energy projects are to be built at larger scales and contribute a greater portion of the islands’ energy portfolio, JPS must institute measures to support the integration of variable generation sources onto their grids. The majority of island networks are old, with the average diesel generators more than 20 years old. Furthermore, the power supply is relatively inefficient with high system losses. There is a need to identify technical criteria and designs that will allow grid stability to be maintained. Two power issues of particular concern are power output and frequency smoothing. Power generation infrastructure requires high reserve capacity to provide adequate reliability, and most of this capacity currently comes from inefficient and outdated diesel generation.

JPS's goal should be to discover and implement the most efficient solution possible. The first stage would be to upgrade existing power plants to high efficiency and quick response turbines with the ability to deploy fast-acting reserve capacity to cope with the voltage fluctuations created by variable generation sources. The second stage would be for grid operators to integrate energy systems, such as battery solutions.

The Government and the Energy Sector have to plan and provide a concrete set of measures for voltage and frequency stabilization or a dedicated spinning reserve capacity to prevent power fluctuations from affecting grid stability. While different grid stability solutions are possible, generally speaking, there are two overall approaches: project-level or grid-level solutions. If battery systems are engaged, such systems can be installed along with each individual project or larger battery solutions can be integrated at the grid-level to manage and smooth the grid electricity.