A rebranded Wigton can drive energy transformation
The following is part six of an eight-part look at the pace and future of renewable technologies:
To do a quick recap, we have seen that we can stop devaluation in its tracks if we eliminate fuel imports for both electricity and transportation (see Part 4). We have also seen that by switching from imported fuel to domestic sources, we tap into the cheapest global sources of energy — solar and wind — causing electricity generation costs to be slashed in half (See Part 2). We have seen, too, that if we finance this total transformation via our households, we make individual citizens surprisingly rich (Part 3)!
All we need now is one agency properly tasked to do this domestic energy transformation, and the resources to implement it.
We cannot afford the cost of creating another agency, so let’s use an existing, profitable one. The only agency within the Jamaican governmental energy spectrum with internally generated resources (in other words, profitable), I believe, is Wigton Windfarm Ltd. It is my understanding that our new prime minister is of the same thought, and has indicated publicly that he intends to mandate Wigton, a subsidiary of Petroleum Corporation of Jamaica (PCJ), as the agency tasked to drive the island’s energy transformation. I could not agree more since the PCJ itself, which controls the PetroCaribe Fund and the Esso refinery, is in conflict with the national energy thrust.
We would need to widen Wigton’s mandate and alter its name to ‘Wigton Domestic Energy’, or something similar, to incorporate other renewable sources. It would need to set up the internal structures to drive the transformation, starting with creating a ‘Jamaica Renewables Energy Trust Fund’ via the levy on light bills. Expertise could be pulled from the similarly constituted National Housing Trust in formulating this, if necessary, and the central bank could provide guidance on setting up the renewables bonds, while the Ministry of Finance could create tax-free retirement savings accounts for householders in order to accommodate the bonds.
With the dual income from wind-energy sales to the Jamaica Public Service (JPS) and the levy inflows Wigton would be in a position to speedily drive the construction of pumped hydro storage. It could also bid for erecting more wind farms (geared primarily for night-time wind generation, as per Part 2). The combined cashflow would also put Wigton in the pole position to combine wind-and-storage projects in regions in which they already operate, mainly the hills of Manchester and St Elizabeth where there are mined out bauxite pockets that can be repurposed and used for hydro-storage and coupled with Wigton’s nearby wind farms, as is being done in Australia. Queensland and Melbourne both quote lifetime prices of around US$0.015 cents per KWh for their proposed pumped-hydro. Wigton being in close proximity to Mandeville and this mile-high township region has a steep fall-off to Nain and the Santa Cruz Plains, making the terrain ideal for achieving low-cost pumped-storage.
‘Wigton Domestic Energy’ would be best placed to feed Alpart with cheap pumped-hydro derived electricity should this project become reality. The plains of southern Manchester near Wigton are well endowed with sunny conditions, making it possible to add low-cost solar farms at a later date. Solar farms with elevated sun-trackers allow for continuation of farming underneath the structures. The sun-tracked solar units could provide land lease income for these same farmers, eliminating the need to buy the land. Wind turbines also allow for lease income to landowners, as is done for cell towers by Digicel. All these additions would help to allow full replacement of imported fuel for electricity generation, and transmission infrastructure would be minimal if we concentrated it all in this way, keeping costs down.
The mandate of the expanded ‘Wigton Domestic’ would need to be agreed on by Parliament and the changes legally mandated. They would become the driver of the indigenous transformation, driven largely by the levy finances placed under them on the public’s behalf. Being a government agency, any excess revenue generated over and above those due to the public financiers could be used to set up an accompanying pension fund. If done as a trust fund they would be blocked from using their funds for civil service salaries and the like, and would instead be earmarked for infrastructure investments to keep the focus on further development of the country. The richest countries in the world have learned this lesson and all have strong sovereign wealth funds, such as Norway (as a result of their large North Sea Oil holdings), and China which now uses its large and growing investment to own a large chunk of the USA’s government debt, and generate income projects elsewhere, including in Jamaica where it is financing toll roads.
Let me point out here that around the time that Jamaica — as part of the 1960s newly independent Caribbean islands — was consumed with fighting to achieve the singularity of political independence (with no meaningful structures implemented to achieve economic independence) — a group of 32 western nations formed a group and adopted common rules that empowered their individual citizens through government-mandated financial wealth-creation structures to grow the individual wealth of their citizens. This group of nations — the OECD (Organization for Economic Cooperation and Development) — now sits atop the world for richest citizens, with individual retirement accounts and pensions and the like which outgrowth into sovereign wealth funds.
In the over 50 years since our Independence we have put no such structures in place to achieve citizen-focused economic wealth. Now, through this proposed ‘Jamaica National Domestic Energy Trust Fund’ and with new tax-sheltered investment accounts attached, we could finally adopt programmes similar to the OECD countries. Hopefully, we shall have similar wealth growth.
If our planners ask for my varied expertise in engineering, energy, planning, and wealth management in setting up this scheme, I would gladly give it. I’m happy with supplying overall guidance and help if they prefer; no position of prominence necessary for me. But I have no illusions of that happening, given the workings of Jamaica.
Having set up this dedicated agency, what do we need to tackle next? Spread half-priced electricity offerings to many neighbourhoods. See my next article.