Business

Jamaica's energy ranks 112th

High cost, poor infrastructure close to Haiti’s

BY STEVEN JACKSON Business reporter jacksons@jamaicaobserver.com

Wednesday, January 15, 2014    

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JAMAICA'S high energy cost and power infrastructure ranked it next to Haiti or 112th globally, according to The Global Energy Architecture Performance Index Report 2014 published by the World Economic Forum (WEF).

Norway topped the list in a report that described Jamaica's energy infrastructure as facilitating underdevelopment.

"The region's lowest performer is Haiti, which ranks in the lower quartile of the index with a score of [38 per cent] narrowly preceded by Jamaica," stated the report published by the European-based WEF, which also publishes the renowned Global Competitiveness Report. "For both countries, their geography and lack of economic development create significant challenges - challenges that in Haiti's case were further compounded by the 2010 earthquake that destroyed the already limited existing power infrastructure."

The report was last published two years ago but contains a new methodology which negates any rankings comparisons, according to the authors.

Countries are now ranked on an Energy Architecture Performance Index (EAPI) - a tool which monitors energy accessibility along with economic and environmental sustainability. Jamaica scored 0.39, or 39 per cent.

"Energy architecture is defined as the integrated physical system of energy sources, carriers and demand sectors that are shaped by government, industry and civil society," the report indicated.

It added that Jamaica's low growth and development was "largely due to the economic impact of import dependence and the lack of domestic energy supply". The island's fuel imports are equivalent to 16 per cent of the country's output.

Jamaica and the Dominican Republic were the lowest performers in the indicator for net energy imports, with an average score some three times worse than others in the region at six per cent, compared with the average of 21 per cent, according to the report.

"Reducing import dependence and exposure to fluctuating fossil fuel prices is an important issue for these countries, which should look to the example of Costa Rica's long-term strategy to mitigate the risks of energy dependence," it added.

Another area of concern included the quality of electricity supply at 4.4 out of seven. Renewable or green energy accounts for some 18 per cent of energy output but the island can do more, according to the researchers.

"Initiatives such as the World Watch Institute's for sustainable development are supporting the implementation of energy efficiency and renewable capacity in energy-dependent Caribbean states, with the long-term goal of achieving sustainability targets while reducing import costs and improving the affordability of energy," said the report. "Jamaica has pursued policies to improve the affordability of solar technologies and is piloting net metering to allow independent power producers to sell excess electricity production back to the grid. However, the scalability of these initiatives is one of a number of challenges that need to be overcome before further reduction of import dependence is achieved."

The island aims to reduce the cost of electricity currently at some 40 cents per kilowatt hour by an undetermined amount via the introduction of a fuel-efficient 360-megawatt plant run on liquefied natural gas.

"Reliable energy promotes economic and social development by boosting productivity and facilitating income generation. Price signals must reflect the true associated costs of energy production to ensure consumption is economically viable and producers remain lean and responsive to an undistorted market," the report explained.

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