Forbes: Jamaica’s Energy Insecurity

By: Caribbean Journal Staff - July 25, 2012

By Marcia Forbes, PhD
CJ Contributor

Heavy Burden of Imported Oil

The figures stunned me. Anthony Hylton, Minister of Industry, Investment & Commerce and Julian Robinson, State Minister in the Ministry of Science, Technology, Energy & Mining both spoke at a seminar recently hosted by the Jamaica Public Service, monopoly distributor of electricity in this island. Listening to them, I realized that the country’s expenditure on petroleum imports represents close to 30 percent of this island’s gross domestic product (GDP).
The burden of imported oil is also a significant contributor to Jamaica’s overall trade deficit, which Minister Robinson said ran at over US$2 Billion for 2011. Almost half of this he said “was attributable to mineral fuel imports (oil).”

While all Jamaicans are aware of the heavy burden of the cost of electricity, many are not aware of how, as taxpayers, we bear the brunt of this, since the government of Jamaica, through its Ministries and Departments, is a major consumer of imported oil and its products.
Even with the “demise” of Air Jamaica and the “lock-down” of sections of the bauxite industry, the transportation sector and bauxite are still major consumers.

Revamp of Energy Sector Needed

A revamp of Jamaica’s energy sector is regarded as a top priority strategy in realizing sustainable socio-economic development for all Jamaicans and making Jamaica globally competitive. This is critically needed against a background of long established energy-related factors which retard the country’s growth. In addition to those mentioned earlier, they include:

1)High oil imports – About 19.8 million barrels in 2011. At US$102 per barrel, this is valued at J$191.4 billion;
2)Vulnerability to oil price shocks – In 2008, Jamaica’s overall oil bill amounted to US$2.7 billion or 18 percent of GDP. By 2011 this has ramped up to close to 30 percent of GDP with oil at US$102 per Barrel;
3)About 95 percent of Jamaica’s electricity is generated from imported oil;
4)Jamaica’s monopoly supplier of electricity, the Jamaica Public Service Company, is very inefficient in its delivery of energy;
5)Jamaica has one of the highest electricity rates in Latin America and the Caribbean.

Energy Insecurity

The foregoing combination of oil/energy related factors is widely viewed as the reason Jamaica is uncompetitive at regional and international levels. Whereas the cost of electricity in Jamaica is approximately U$0.40/kw hr, in Trinidad and Tobago it is approximately U$0.06, about seven times less than Jamaica. While power generation capacity is adequate to cover current demand, Jamaica’s quasi-exclusive reliance on a fossil fuel dominated matrix of imported petroleum products – primarily diesel oil and Heavy Fuel Oil (HFO) – for power generation, together with high levels of inefficiency in power generation, and high transmission and distribution losses (23 percent in 2009) lead to very high electricity costs and tariffs in this country.

Repositioning for Growth

The National Energy Policy, approved by Jamaica’s Parliament in November 2010, seeks to develop: “A modern, efficient, diversified and environmentally sustainable energy sector, providing affordable and accessible energy supplies with long-term energy security and supported by informed public behavior in energy issues, and an appropriate policy, regulatory and institutional framework.”

The NEP takes cognizance of Jamaica’s existing challenges and is intended to help to reposition the country for growth. In a nutshell, the key goals of this policy are to:
1.Enhance Jamaica’s economic competitiveness by reducing energy consumption, improve the efficiency of the energy sector and minimize the cost of energy to end users;

2.Increase Jamaica’s energy security by diversifying the energy matrix, with focus on renewable, sustainable sources toward a Green Economy;

3.Delineate and implement a well-defined institutional and regulatory framework with Government Ministries and Departments as models in energy best practices.

Scoring Goals

These goals, if realised, can revolutionize the revenue-generating capacity of individuals, organizations and the country at large. The intention is to deal with both the supply and demand sides of the energy challenge — to provide more affordable and sustainable energy supplies to Jamaican consumers and industries so as to facilitate growth and development, while at the same time encourage energy efficiency at all levels. Can and will Jamaica achieve these admirable, if lofty goals?

Dr Marcia Forbes, a Caribbean Journal contributor, is a media specialist, the co-owner of multimedia production company Phase 3 Productions Ltd and former Permanent Secretary in Jamaica’s Ministry of Mining and Telecommunications and later the Ministry of Energy and Mining. She is the author of Music, Media & Adolescent Sexuality in Jamaica and the recently-released Streaming: Social Media, Mobile Lifestyles (click below for more information).

Follow Dr Marcia Forbes on Twitter: @marciaforbes

Popular Posts all-inclusive montego bay resort by marriott

Marriott Just Opened Its New All-Inclusive Resort in Montego Bay 

Marriott has continued its rapid expansion into the Caribbean all-inclusive space with the debut of its newest adults-only resort in Montego Bay: the new Hideaway at Royalton Blue Waters, An Autograph Collection All-Inclusive Resort.  The 352-room resort is part of […]


Yes, You Can Stay at an All-Inclusive Resort in St Thomas, USVI

the beach at the bolongo bay resort

The Bolongo Bay Beach Resort on St. Thomas may be the most popular all-inclusive resort you’ve never heard of. It’s not that the resort itself isn’t well-known: this family-run and managed, beach resort has been in business since 1974. But […]


Barbados Is Transforming the Concorde Hangar Into a New Airport Terminal 

the concorde made its last journey to barbados in 2003

As air travel to Barbados continues to surge, the island is making a major transformation at Grantley Adams International Airport.  The former Concorde hangar, which has served as the island’s popular Concorde Experience museum, is being converted into a new […]


Related Posts fort young

With Winter Ahead, a Sunny Outlook for Caribbean Hotels

Summer’s over, kids are back in school and travel starts to cool down with the weather.  But even in the year’s customary nadir, the Caribbean still showed strong improvement last month, according to new data from hotel analytics firm STR.  […]


Jamaica Makes Push for Global Tourism Resilience Fund

doctors cave beach with waves

Jamaica is continuing its call for the creation of a tourism resilience fund, one that would help vulnerable Caribbean nations build up their resilience to the effects of climate change.  It’s the brainchild of Jamaica Tourism Minister Edmund Bartlett, who […]


The Winners of the 2023 Caribbean Boutique Hotel Awards

caribbean boutique hotel awards

The people have spoken. The world’s foremost experts on Caribbean travel — Caribbean Journal readers – have chosen their top picks for the best small hotels across the wider Caribbean region. This year’s 2023 Caribbean Boutique Hotel Awards celebrate boutique hotels […]


SUBSCRIBE!

Sign up for Caribbean Journal's free newsletter for a daily dose of beaches, hotels, rum and the best Caribbean travel information on the net.


No. Thank You