Country on Path to Reduce Dependence on Fossil Fuel

KINGSTON — By the year 2030, Jamaica should be well on its way to achieving a marked reduction in its dependence on imported fossil fuel that provides the energy the country uses.

To achieve this objective, strategies will have to be identified, developed and implemented with proven monitoring mechanisms in place to ensure success.

Billions of dollars are spent annually to import crude oil, which is processed by the State’s oil refinery, PETROJAM, to satisfy the country’s energy needs.  In 2010, Jamaica spent US$1.6 billion importing some 20 million barrels of oil.  This expenditure is higher than the US$1.3 billion the country earned from exports during the similar period.

To combat this disparity, the Government has embarked on a thrust to diversify the country’s energy base, through the use of a mix of renewable energy and natural gas.  It is through this mix that the goal of reducing the country’s dependence on fossil fuel by at least 20 per cent, as set out in the National Energy policy, should be achieved by 2030. This will be supported by energy conservation programmes in the public and private sectors.

Minister of Energy and Mining, Clive Mullings, tells JIS News that efforts are being pursued to introduce the relatively cheap Liquefied Natural Gas (LNG) to meet at least 42 per cent of the country’s energy needs by 2030. The plan is welcomed by the high energy consuming bauxite/alumina sector, as this would drive down their production costs.

There are also strategies being pursued in renewable energy, in such areas as wind, hydro and solar.

The Minister says that in 20 years or less, renewables are expected to meet 20 per cent of the country’s energy demand, which could result in savings of US$284 million at today’s purchasing rate.

"There really is no silver bullet, these things take resources, and it takes focus. It's also important for government to do the right thing. We have achieved some things in terms of renewables, net billing, and in lifting the cap from 15 Megawatts to 25 Megawatts without the need for competitive tender – those are concrete steps," he tells JIS News.

The Minister explains that all strategies being pursued must be done in concert with the environment. “We cannot be in contention with the environment, therefore we have to lower our carbon footprint and so the utilisation of LNG is part of the approach,” Mr. Mullings adds.

He notes that wind energy is a key component of the government’s thrust, citing the Wigton Wind Farm in Manchester which has already produced enough energy to save the country over $229 million in the first five months of the current fiscal year and a reduction of 27,000 barrels of oil. Hydro energy from the country’s rivers and water sources has also contributed some 24 Megawatts of electricity to the public grid.

The increased use of solar for electricity generation and water heating is also key in the campaign to reduce the oil bill.

Mr. Mullings, at the launch of CARICOM Energy Week on November 3, disclosed that several public institutions, such as schools and hospitals, have benefited from donations of renewable energy systems.   In fact, the Minister pointed out that from the installation of only five of these systems, the public purse will save some $6 million.

"It is in this way, in a strategic and sustained approach, that we will be able to meet the challenges that exist, and create a platform for growth into the future," the Minister said.

Some institutions have also been making it easier for persons to access loans to purchase renewable energy devices.

The National Housing Trust (NHT) and Capital and Credit Merchant Bank have announced the availability of loan instruments that the public can access to purchase solar energy equipment.                        

"If it is that you’d like to get away from the public supply all-together and be able to operate your electrical appliances without fear of a big bill later, we’re offering an alternative energy generating loan. We will provide you with up to $5 million for you to acquire your own alternative energy generating system.  We know this is a major capital expenditure and we will allow you to amortise it over 10 years, making the payment affordable,” Branch Manager (Kingston) at Capital and Credit Merchant Bank, Owen Ferguson, announced recently.

The NHT has two financial instruments to facilitate the purchase of renewable energy applications – a Solar water heater loan and a Solar panel loan. 

Acting Branch Manager (Kingston and St. Andrew), Ava-Ann Scott, points out that the facilities offered by the NHT are primarily targeted at persons who are in good standing with the Trust.

"For the solar water heater loan, we offer up to $250,000 at three per cent interest for a maximum of five years.  For the solar panel loan, it’s a maximum of $1.5 million at a maximum seven per cent interest over 15 years," she notes.

Several other financial institutions, including commercial banks and credit unions, have also been offering financing opportunities to their customers for the purchase of solar hot water heaters.

By Rodger Hutchinson