Tag: Tariff

  • Marketing Renewable Energy Consultancy in Trinidad & Tobago

    Marketing Renewable Energy Consultancy in Trinidad & Tobago

    Renewable Energy (RE) is once again at the forefront both locally and internationally with the recent display of two opposing views, one by the Prime Minster of Trinidad & Tobago (T&T) versus another by the President of the United States of America (USA).

    The T&T Prime Minister, following his return from RE and Energy Efficiency (EE) conscious Chile, reaffirms his country’s commitment to the tenants of the 2015 Paris Climate Agreement, with specific objectives to be achieved via the reduction of the utilization of fossil fuels and the promotion of RE and EE. The American President, on the other hand, following his return from the recently concluded 2017 NATO summit in Belgium,  unexpectedly announced his country’s withdrawal from the same agreement.

    With these political decisions fresh in our minds, it is worth noting that the success of any RE & EE related product or service introduced into a market is not only based on the political environment but also on the effectiveness of the marketing plan designed for its promotion.

    The T&T RE Market in the past has been virtually non-existent with the present grid-connected RE sources accounting for less than 1% of all grid-connected generation. However, the prospects of the future RE market appear to be more favourable with the Government’s target of 10% Penetration of RE of the total forecasted Electricity Grid Capacity by 2021, specifically from Wind, Solar and Waste to Energy (WtE) technologies. It is expected that the Government will continue to take the lead in the local RE Market, with the implementation of fiscal incentives and amends the relevant legislations to allow for grid connection.

    It is expected that the Government will continue to take the lead in the local RE Market, with the implementation of fiscal incentives and amendments to the relevant legislations for grid connection. However, there will still be room for the introduction of private sector investment in distributed renewable generation sources (DRGS), such as domestic Solar Photovoltaic and Wind Turbine generators as a further means to increase T&T’s energy security and reduce our reliance on fossil fuels.

    Although there is now a more optimistic outlook of the T&T RE Market, further considerations must be made to the fact that (i) the market is still in its Infant Stage and (ii) the cost of fossil based energy in T&T is relatively cheap at less than US$0.06/kWh for Residential Customers and even cheaper energy charges for Industrial Customers with an additional Demand (kVA) Charge. These low rates would result in DRGS having payback periods in excess of 9 years, which renders them less attractive. Thus, a more paternalistic approach to managing the introduction of DRGSs to T&T via the provision of consultancy as a service to all segments of the market for more optimally engineered solutions is required. This RE Consultancy Service must be marketed as a convenience to the customer where it is the consultant who would determine the optimal engineering design and specification solution to the DRGS application that is desired by the customer.

    The effective marketing of RE Consultancy Services as a convenience for the customer is one of the pillars of roll out of DRGSs in T&T as it is essential for the removal of some of the existing barriers to entry the T&T RE Market. Even with the existing barriers to entry to the RE Consultancy Service T&T Market there are still a few RE Product Distributors that act as RE Consultants such as Smart Energy Ltd. and Solar Power Concepts Ltd. Thus the existing competitive landscape for RE Consultant Services is weak as there are just a few players who predominantly focus on Solar Technologies only. While the positioning of RE Consultancy Services should be one where the customer views engaging with a consultant before the initiating of any type RE Project solution being essential to its success.

    In that same vein, the success of the RE Consultancy Service Company is based on the marketing plan effectively defining the market segments. Failure to effectively segment the T&T RE Market for opportunities would result in:

    • Marketing to customers who are less willing to pay the premium for RE Consultancy;
    • Providing only a limited range of initiatives to appeal to customers; and
    • Using unfocused marketing techniques

    In addition to the typical criteria used to segment the market such as demographic, geographic, physiographic and product benefit criteria, the criteria should initially start with the RE type desired by the customer, followed by the maximum aggregate capacity of the DGRS into segments similar to the existing T&TEC Tariff Structure, for example:

    • Up to 5kW, for single phase, 3-wire, 115/230volt DGRS installations serviced under the Domestic and General Tariff (Rate A),
    • Up to 50kW, for single and three phase, 4-wire, 115/230volt DGRS installations serviced under the Commercial Tariff (Rate B),
    • 50kW to 200kW, for three phase, 4-wire 115/230volt DGRS installations serviced under the Industrial Tariff (Rate D1), and
    • Single DRGS with output greater than 200kW shall be installed for self-generation as stand-alone equipment which does not export to the Grid.

    In the end, the effective marketing of RE Consultancy Services according to the specific market segments would help to mold the perception and attitude towards DGRSs and assist achieving nationwide adoption of RE.

     

  • JPS proposes massive residential rate increase!

    JPS proposes massive residential rate increase!

    As some of you may already know, JPS has made an application to the OUR for an increase in its non-fuel tariff rates. This was done in accordance with their exclusive all-island electricity licence, which stipulates that JPS must submit a filing with the OUR to obtain new rates at the end of every five year period. The licence also allows for a monthly adjustment due to foreign exchange changes and an annual adjustment to cater for inflation.

    Data obtain from the MSTEM showed that over the last period 2009 to 2013, JPS has increased its rates on average by 15% annually for each class of customer, as shown in the chart above. In its recent submission for the period 2014-19, while acknowledging that Jamaica and by extension its customers are experiencing an economic contraction, JPS proposes a massive 21% increase in the average residential customers electricity bill. The average commercial customer will also see an increase of 15%, while the average industrial customer will see a small 1.5% reduction.

    Be that as it may, the proposed 21% hike in residential electricity bill has definitely sparked my interest. It did so to the point that I decided to take a quick glance through their application document (feel free to take a look). As a result, I decided to present some of the information that I think will give you’ll a heads up on what your bill might look like if the OUR approves the proposal as is (and for simplicity I focused only on the residential class, since that affects all of us).

    The following table shows the proposed rates in addition to the current ones in US dollars ($1 US = $112 JM). Note that the residential customer class is divided into three tiers, as shown in the left column.

    table1

    A a network access charge is now being proposed to replace the customer charge. This change brings with it a hefty increase, up to 372%. Is this ridiculous or not?

    The next table shows the percentage increase to be expected on average per tier. It also showed that the average consumption per tier is 54, 196 and 927 kWh (this is the unit used to measure you electricity usage) and the monthly expected increase is 17, 21 and 23% respectively. So that’s where the 21% stated above and in the print media came from.

    To put this into prospective, say for example that you are the average customer in the second tier (100-500kWh) with monthly energy consumption of 196kWh, you current bill would be $7,891.00 per month. However, after the increase you new bill would be $9,567.00 per month. This plus the bill impact of the other tiers are shown in the following table:

    table3

    The document is a detailed and lengthy one and though I did not get the time to digest the content in its entirety, I can’t help but feeling that JPS is shifting too much of the burden unto the residential and small commercial customers while at the same time lowering the cost to large commercial and industrial customers. This they say is in a bid to “provide an attractive tariff to the largest industrial customers to encourage economic growth and development for the country.”

    However, my gut feeling is telling me that this a trap engendered to keep customers connected to the grid. How? Firstly, the lowering of the tariff for large commercial and industrial customers will be a disincentive to the utilization of the wheeling/net-billing policies, since this will affect the economics gains of these options. And secondly, smaller customers are less likely to afford to go off the grid or put another way the economic gains are negligible.

    What are your thought? Feel free to comment below or inbox me via the about page.

    Thanks for reading!

    CP.

  • JPS 2k13 Tariff Adjustment – impact analysis part 2

    JPS 2k13 Tariff Adjustment – impact analysis part 2

    In this post, the sequel to JPS 2k13 Tariff Adjustment – impact analysis part 1, I will make good on my promise to provide detail impact analyses of the proposed 10.35% increase of JPS‘s non-fuel rates across the different (more…)

  • JPS 2k13 Tariff Adjustment – impact analysis part 1

    JPS 2k13 Tariff Adjustment – impact analysis part 1

    This has never been done before, at least not by me! In this post I will attempt to break down and assess, for the purpose of the readers, JPS’s Annual Tariff Adjustment Submission to the OUR (Office of Utilities (more…)