Savings of US$1.2 Billion Per Year From Energy Services Companies Project

Jamaica stands to realize savings of an estimated US$1.2 billion per year once the Government’s Energy Services Companies (ESCO) project has been fully implemented.

Minister of Labour and Social Security, Hon. Derrick Kellier, said consultants have identified potential savings of US$370 million per annum from oil refinery upgrade; US$286 million from power generation; industry, US$212 million; transportation (rail and road), US$120 million; residential customers, US$97 million; bauxite industry, US$75 million; and the public sector, US$23 million.

Minister Kellier, who was speaking on September 9, at the opening of the ESCO Capacity Building Workshops in Kingston, said consultants also reported that a 4.7 per cent per annum reduction target for electricity in the public sector is possible.

“Recall that in 2009 the public sector consumed 411,000,000 kilowatt hours (KwH) of electricity. Utilising the ESCO model, however, a 4.7 per cent savings would translate to 19,317,000 KwH,” he said.

Being funded by the European Union and the Government of Jamaica (EU/GOJ), the ESCO project seeks to develop a sustainable ESCO industry in Jamaica by raising the level of awareness and understanding of the business of energy efficiency (EE) and renewable energy (RE); introducing new business models to enable increased levels of investment in and implementation of EE and RE projects; and increasing dialogue, trust, and confidence in the industry among stakeholders.

The workshops are aimed at building the technical and non-technical capacity of players in the energy industry.

According to Minister Kellier, Jamaica’s high dependency on high-priced energy, which is among the highest in the Latin American and Caribbean region, makes it an attractive market for establishing ESCOs to undertake energy-efficiency projects.

He pointed out that more than half of the available energy in imported fuel in Jamaica is wasted and this is reflected in the relatively high energy content per unit of Gross Domestic Product (GDP).

“We, in this country, use about two Barrels of Oil Equivalent (BOE) to produce each US$1,000 of GDP”, he said noting that it was in radical contrast to more energy efficient countries, such as Costa Rica and Japan.

The Labour Minister said that at the end of the workshops participants would have increased their capacity to manage technical as well as commercial aspects of energy performance contracting businesses; be exposed to important concepts and practices of energy performance contracting; and appreciate the importance of the international best practices for reducing risk and creating greater certainty in energy performance contracting businesses.

Principal Director, Energy Division in the Ministry of Science, Technology, Energy and Mining, Fitzroy Vidal, in his address, stated that the workshops are a very important step towards Jamaica achieving energy security.

He urged Jamaicans to develop a culture of energy conservation and efficiency, which would translate into “taking the power into our own hands”.

“If we solve our energy problem here in Jamaica then we would have solved the economic problems and by extension, the health issues, our education and agricultural systems. So much of our financial resources go towards importing energy and until we solve that problem we will not have the …resources [needed] for social development,” Mr. Vidal said.

Head of Infrastructure and Rural Development, Delegation of the EU to Jamaica, Thomas Opperer, said the organization remains committed to assisting developing countries like Jamaica to reduce high energy costs.

“The EU has turned its pledge to reality through (providing) funding aimed at helping developing countries to secure access to modern, affordable and reliable energy services in order to meet the basic needs of daily life, accelerate economic growth, and improve the livelihood of people,” he said.

An ESCO is a business that combines renewable energy, energy efficiency and energy conservation techniques to develop an energy saving project.

The workshops will continue until September 16 in Kingston and Montego Bay.