Shelly-Ann Thompson, Staff Reporter

THE JAMAICA Public Service Company (JPS) has decided to use two renewable energy sources for its plant, gradually reducing its dependence on oil for electricity generation.

The light and power company said work is to commence on the two projects, which involves the use of hydro and wind power, by January, with implementation slated to begin in 2011.

Winsome Callum, head of corporate communications at the JPS, said any renewable energy addition to the grid would generally reduce the dependence on oil.

"We are very optimistic about the impact this will have on the overall fuel costs to customers and to the JPS," she said.

Callum, however, cautioned that with regard to customer billing, final negotiations on tariff rates and other project details on the use of renewable energy are to be finalised.

These projects will result in the addition of more than nine megawatts of new generating capacity.

Benefit in the long run

Meanwhile, the Office of Utilities Regulation (OUR) has said that customers may not see a direct impact on their bills for some 10-15 years after implementation.

"This will benefit customers in the long run because the rate will fall with very little overhead in about 10 years," said David Geddes, director of consumer and public affairs at the OUR, adding that renewable energy would benefit the nation overall.

However, he pointed out that the JPS, even after implementing the project, would still have to pay energy charges, a premium of 15 per cent added to its cost for not using fuel.

While the switch to renewables would not affect billing immediately, Geddes pointed to some of the benefits that would immediately accrue, among which are a cleaner environment, less dependence on foreign exchange and imported fuels.

The total amount of oil imported in 2007 was 29.9 million barrels compared with 30.9 million barrels the previous year.

Even with this reduction in import volume, the cost to import oil increased from US$1.84 billion to US$2.01 billion.

The JPS says, since January, it has incurred more than J$37 billion in fuel costs.

The projects being undertaken by the JPS are a 6.3-megawatt hydroelectricity power plant in Maggoty, St Elizabeth, and a three-megawatt wind farm in Munro of the same parish.

Geddes said in keeping with the Government's energy policy, the OUR periodically, will invite persons to bid for up to 60 megawatts of renewable energy.

Energy policy

The energy policy outlines that about 15 per cent of the national grid should be supplied by renewable energy.

Recently, the light and power company and about seven other entities, a few operating outside of the island, submitted bids.

Of three bids submitted by the JPS, only one was rejected, said Geddes.

The other bid that may be approved is a renewable energy project sourced from waste, proposed by HGC Corporation out of The British Virgin Islands (BVI).

"We indicated to them that we had conditionally approved their bid," said the director.

The BVI firm needs to satisfy six conditions, among which are financial arrangements and how the waste would be acquired.

While the the new hydro project will involve the expansion of an existing hydroelectricity plant, the wind farm project will be the first to be implemented by the JPS. A three-megawatt turbine is being built as a pilot, with plans for future expansion.

Both renewable energy projects are expected to cost an estimated US$38.7 million (J$2.94 billion).

The company said it was also exploring a number of other initiatives as part of its efforts to reduce dependence on oil. These include the recent partnership agreement with Petrojam for the construction of a Petcoke plant at Hunts Bay in the Corporate Area. Additionally, the JPS is working to implement a project to convert the Bogue combined cycle plant in Montego Bay to use compressed natural gas, and the rehabilitation of the Constant Spring hydro plant in St Andrew.