KINGSTON — A study conducted by the Jamaica Productivity Centre (JPC) has found that Jamaica could realise billions in savings annually from greater efficiencies in the distribution and generation of electricity, which could have implications for the productivity sector.
The study titled: 'Generation and Distribution of Electricity in Jamaica: A Regional Comparison of Performance Indicators,' was unveiled at a symposium held yesterday (July 28) at the University of the West Indies, Mona. It compares and benchmarks the cost and performance of the electricity sector with similar regional and local companies.
Chairman of the JPC Advisory Board, Joseph Matalon, who revealed the findings, said that an estimated $7.43 billion could be saved annually, by reducing systems distribution losses from the current 23.9 per cent to the 16 per cent average for the Net Oil-Importing Countries (NOIC).
He noted further, that by improving the conversion of fuel to electricity from the current 10,400 to 8,100 kilojoules per kilowatt hour (KJ/KWh), which is the conversion rate of the Jamaican private power companies, "we would save an estimated $7.86 billion annually in consumer benefits and fuel price pass-through."
The study also found that by implementing the quality of service or Q-factor requirements under the licence, consumers could have saved an estimated $130 million in 2009 and $440 million cumulatively, from 2005 to 2009.
In terms of power generation, the research found that the Independent Power Producers are outperforming the Jamaica Public Service (JPS) in both KWh/barrel of oil equivalent and KJ/KWh. "As such, JPS needs to realise significant fuel efficiencies to eliminate the measured productivity gap," Mr. Matalon said.
He noted that on the distribution side, JPS showed deficiencies for technical efficiency and quality and end-user price. "In this context, the greatest challenge for Jamaica's electricity sector is how to bring end-user prices in line with those of the net-oil importing countries of the region," he stated.
Mr. Matalon said one significant finding from the research, was the fact that Jamaicans were using far more electricity than most countries in the region captured in the study. At approximately 2,400 kilowatt hour per capita (kwh/capita) local electricity consumption is higher than Mexico and Brazil and just below Argentina. "This level of consumption is consistent with countries whose Gross Domestic Product (GDP) per capita is US$10,000, about 2½ times our stated GDP per capita," he informed.
Minister of Labour and Social Security, Hon. Pearnel Charles, in a message read by Chief Technical Director in the Ministry, Errol Miller, said the information gathered is critical for the competitiveness of the nation's enterprises.
"The study also identifies opportunities that can position the electricity sector as a key vehicle for productivity improvement and economic growth by highlighting issues, which can significantly reduce the cost of electricity to Jamaicans," he stated.
The symposium was hosted by the JPC, the Mona School of Business and the Office of Utilities Regulation (OUR).
The JPC is a tripartite national productivity organisation, comprised of representatives of the public and private sectors and trade unions, with a mandate to raise the productivity levels of firms, industries and sectors and by extension, improve Jamaica's national productivity.
By Chris Patterson, JIS Reporter