JPS to develop three renewable energy plants
Steven Jackson/ Senior Business Reporter
POWER UTILITY Jamaica Public Service Company, JPS, plans to add nearly 300 megawatts of energy to the national electricity grid in support of the government’s 50 per cent renewable energy target.
It has put out tenders seeking engineering and construction proposals for three plants: a 115 MW solar PV plant; a 171.5 MW BESS, or battery energy storage system; and a 12 MW onshore wind plant – totalling 298.5 MW of new capacity.
By December 2024, the JPS will choose an engineering firm to build the plants. That firm will oversee the construction activity until 2027. The solar PV plant is slated to start construction in 2025 to 2026, while the BESS and wind projects are start in 2025 to 2027.
Renewable energy plants align with the trend of moving towards cleaner and more sustainable energy sources.
“As the opportunities arise for new generation, we will pursue renewable sources,” JPS says in its ESG report posted to its website.
Jamaica aims to hit the of 50 per cent renewable energy target by 2030. Already, there are 187 MW of renewable power installed across the island. And renewable capacity is now said to be at 12 per cent of the grid.
Hitting the target assumes that the national energy grid remains at “1,042 MW of generating capacity”, which already increased from 789 MW earlier in the year, according to separate JPS tender documents.
Of the current capacity, JPS owns 541 MW, while the remaining 501 MW is owned by independent power producers that sell the electricity they produce to JPS under contract. While Jamaica has several firms that generate electricity, only JPS can distribute the power, due to its exclusive licence with the Jamaican government as operator of the national grid.
In September, ahead of JPS’ roll-out of its project, the stateoperated Generation Procurement Entity put out a tender seeking investors to develop 100 MW of renewable energy plants across Jamaica. The new office is performing a function that once resided with the Office of Utilities Regulation, the regulator of utilities and telecoms, under a
mandate by Cabinet in January 2020.
Jamaica’s energy grid is now dominated by liquefied natural gas and oil. The prices of those fossils have spiked since the onset of the pandemic. And within that time, the Jamaican government reset its renewables target from 30 per cent to 50 per cent.
The remix is expected to cut into the country’s fuel import bill, which rose to US$2.38 billion in 2022, up from US$1.54 billion the previous year, according to the Economic and Social Survey
Jamaica report produced by the Planning Institute of Jamaica.
The price spikes were linked to the Russian invasion of Ukraine and related sanctions.
Last year at an OUR energy forum, experts indicated that although the fuel source for renewables are freely available, the cost to construct such plants can run to multiples of a fossil fuel plant. Therefore, JPS customers could receive higher bills initially to cover the higher cost of the investment in renewables.
The energy mix, up to last year, was 59 per cent LNG; 28 per cent diesel fuel; and 12 per cent renewables. Seven years ago, diesel accounted for 95 per cent of the mix, while renewables was five per cent.
In a further breakdown of current renewable energy capacity, GPE put the mix at six per cent for wind power and three per cent each for solar and hydropower.
The tenders by JPS and GPE will serve to narrow the 38-point gap between the current renewable capacity and the government’s target.
While GPE has taken over the job of managing the renewable energy procurement process, it does so in tandem with OUR.
The process of issuing a renewable ‘ auction’ licence includes discussions between the JPS and OUR on the capacity required. That plan is submitted to the GPE, which prepares request for proposal and project agreements that must be approved by OUR prior to GPE advertising the tender and inviting bids.
After the bids are evaluated by a technical committee, GPE submits a bid evaluation report to the OUR for approval. The successful bidder then applies to the OUR for licences and tariffs.
The entire process up to the issuance of the licence is expected to take six months, GPE said.
Outside of its own plants, JPS has power-purchase agreements with four renewable energy producers that supply electricity to the grid, namely, Wigton WindFarm, which has a capacity of 63 MW; BMR Jamaica Wind, 36 MW; Content Solar, 28 MW; and Eight Rivers Energy Company, 37 MW of solar power.
JPS serves roughly 680,000 residential, commercial and industrial customers. The company owns and operates 20 generating units, 53 substations, and approximately 21,000 kilometres of distribution and transmission lines.
For three straight years, the power utility has generated record earnings, and is on track towards a new high this year, having recorded nine-month profit of US$47.2 million for the January to September 2023 period.