Diversifying Jamaica’s Energy Mix

By: Caribbean Journal Staff - May 5, 2014

By Paul Hay
CJ Contributor

In an article in Jamaica’s Sunday Gleaner dated 21 April 2013 titled: “More Lessons from the Past – Missed Energy Opportunities”, William Saunders, Energy Consultant, outlined Jamaica’s failure to act upon initiates to diversify its energy mix from 1978, when Jamaica formulated its first energy plan.

In a much earlier article in Jamaica’s Sunday Gleaner dated 30 March 2008 titled: “Jamaica’s Energy Challenge – part III”, Zia Mian, a retired senior World Bank official and international energy consultant, stated that: “Jamaica’s economy is relatively energy intensive.”

Jamaica has one of the highest rates of energy consumption in Latin America and the Caribbean region. This is mainly due to heavy usage by the bauxite/alumina sector. The oil consumption per sector from 2004-2011 is shown in table 1.

in an article titled: “Energy Cost and our Economic Future – Future of Alumina Sector Hinges on Energy Cost”, in the Mona School of Business Nov/Dec 2011 issue, Carlton Davis, former Cabinet Secretary and chairman of the Jamaica Bauxite Institute, stated, that:

“Given the importance of the cost of energy in the production of alumina and the consensus that oil will be more expensive over the long-term than natural gas or coal it is incumbent that oil is replaced by one of these two fuels… (and) Government has a lead role in affecting this transformation.”

The cost to import fuel into Jamaica from 2008-2011 is shown in table 2. Fuel is by far the largest expenditure on imported goods. With the exception of 2009 and 2010, the cost of importing fuels was greater than half of the returns from exports.

Jamaica has a serious trade deficit, and oil is a major contributor. Devaluation normally boosts exports, but not in Jamaica. An assessment of Jamaica’s exchange rate policy from 1962 onward appears in an academic paper by Dr Michael Witter’s titled: “Exchange Rate Policy in Jamaica: A Critical Assessment.”

 

Jamaica has a serious trade deficit, and oil is a major contributor.”

 

He concluded that devaluation had the effect of inflating the value of imports significantly over that of exports. Cheap oil imports which prevailed in the 1950s through to the OPEC action in 1973 factored in Jamaica’s economic growth.

But, oil prices are projected to reach US$150 – US$200 in the near future.

Prior to the global recession in 2008, consumption in the shipping/aviation sector has also risen. As the global economy recovers and Jamaica completes its logistical hub, in preparation for the widening of the Panama Canal, this sector could easily overtake the electricity sector in its use of energy.

Promising signs on the horizon need to produce tangible results. Construction of the 381 MW, LNG-fired power plant is one of them. The Private Sector Organization of Jamaica (PSOJ) needs to consider Jamaica’s history of missed opportunity and reconsider their involvement in this project.

Paul Hay, a Caribbean Journal contributor, is the founder and manager of Paul Hay Capital Projects.

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 The home is on the market now for $65m

This Caribbean Home Just Listed for $65 Million 

It’s one of the most expensive listings in the Caribbean right now: a seven-bedroom beachfront estate that just hit the market for $65 million, Caribbean Journal Invest has learned.  The 11,625-square-foot home, called Illawarra House, is set on a 0.92-acre […]


At This Caribbean Museum, a Trip to Space 

the opening of the exhibit in antigua

Antigua and Barbuda’s Keisha Schahaff and Anastasia Mayers made history in August when they became the first Caribbean women to travel to space, making the journey on Virgin Galactic.  Now, the mother-daughter duo’s journey is being commemorated in a new […]


The Ultimate Car Rental in St Barth 

st barth car rental

The Caribbean’s most glamorous island is also home to some of its most stunning places to drive: the winding, switchback, cliffside roads of St Barth.  While much of the island’s traffic is filled up by smaller hatchbacks, scooters, Renault Twizys […]


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