The addition of new generating capacity to Jamaica’s electricity grid can be achieved in three ways:
1. the installation of conventional power plants
2. the installation of renewable energy (RE) facilities
3. the installation of co-generation facilities.
RE facilities refers to plants in which the source of primary energy continually (naturally) regenerates. Such sources of primary energy include the sun, wind, rivers, ocean and biological cycles. The exploitation of these sources does not lead to depletion of reserves and minimizes adverse effects on the environmental.
Jamaica has great potential for the addition of RE capacity due to its many renewable sources (including hydroelectric, wind, solar and bio-fuel) and has thus far successfully proven the technical and financial viability of RE projects through its existing 42 megawatts (MW) of wind and 30 MW of hydro power capacity. The national energy policy has set a target of 15% of the total generating capacity to be provided from renewable resources by the end of the year.
Last year the government signed off on three licences that will see the establishment of 78 megawatts (MW) of new renewable capacity (inclusive of 58 MW wind and 20 MW solar) in a bid to meet its target. This will bring to total renewable capacity to 150 MW and total generating capacity to approximately 1025 MW.
The Office of Utilities Regulation (OUR) which acts as the regulator for the monopolized grid, classifies RE projects into three categories: 1. Large additions: plants of sizes greater than 15 MW 2. Medium additions: plants greater than 100 KW but less than 15 MW 3. Small additions: plants of 100 KW and less
The OUR’s from time to time will do a least cost generation expansion plan that sets out new capacity to be added to the grid to meet load growth and the replacement of aging plants. A fraction of this capacity is reserved for additions from renewable sources. It is preferred that this capacity be first satisfied by large RE facilities by mean of a competitive process that is consistent with the All Island Electricity Licence held by the Jamaica Public Service (JPS) company.
If, however, the block assigned for renewables is not completely filled by large additions within the time specified by the OUR then renewable proposals for medium and small capacity additions will be considered. These proposals may not be subjected to a competitive tendering process but priority will be given to proposals that are technically feasible with the lowest economic cost. A price of up to 15% above the JPS’s avoided costs is allowed for electricity generated from these renewable sources.
Large and medium capacity addition are required to sign a power purchase agreement with JPS, while small capacity additions will be made by way of standard offer contract issued by JPS.