It was unfortunate that most would have missed the January 23 closing panel of the Jamaica Stock Exchange conference, as it featured newly arrived (and encouragingly Jamaican-born) Jamaica Public Service Company (JPS) CEO Hugh Grant explaining the very exciting transition occurring from fossil fuels to renewables, which presents Jamaica with “lots of opportunities”.

He cautioned, however, that Jamaica, as an island, doesn’t get a second chance to get it right the first time.

He mentioned three main issues. The first is lack of scale, making it difficult for us to get “competitive prices”, as Jamaica’s 700 megawatt peak load for the entire country compares with one 1,000-megawatt plant in New York. One solution he advocated is for Caricom to negotiate as a bloc through entities such a Carilec, the Caribbean Utility Corporation that acts as an association for the regional electricity industry.

The second problem is our sources of energy, or what he described as the intermittent verses dispatchable debate, meaning renewables compared with, say, generation using fuel such as liquefied natural gas (LNG). On top of this issue of reliability is that of resilience; for example, he arrived during Hurricane Beryl, and as he correctly put it, we are likely to see more frequent and longer duration storms.

Finally, he noted that 20 per cent of our energy cost represents theft, a level of problem which requires, in his view, a stakeholder review, as it is a socio-economic issue requiring social intervention from initiatives such as Project STAR.

In the question-and-answer session he was asked about the potential for alternatives, meaning small modular reactors or hydrogen, which he described as having potential but are some years away. He also mentioned that a smaller nuclear reactor powers the high-end Westchester district in New York. His American predecessor at JPS, in response to similar questions, had argued that Jamaica was not the right place to “pilot” new technologies but instead should allow others with large budgets to successfully pioneer such innovations, mentioning, for example, that California is now at 60 per cent renewables.

It was, therefore, useful that in her presentation, Wigton Energy Deputy CEO Michelle Chin Lenn provided a summary of the very wide range of Caribbean electricity prices in US cents per kilowatt hour — 3.2 to 45.1 for residential and seven to 48.3 for commercial.

She reminded us that in his energy policy of October 2018, Prime Minister Andrew Holness had a target of 50 per cent renewables in electricity generation by 2030 and noted that one of the reasons for this ambitious target is the very high cost of fuel, which in 2022 was 20 cents of the roughly 36 cents US per kilowatt hour, versus just over 15 cents out of the total cost of 32 cents in 2023, according to JPS figures.

She added that Jamaica’s electric vehicle (EV) policy of 2023 has a target of 12 per cent of privately owned fleets, 16 per cent of public transport, and 100 per cent of the Government of Jamaica fleet being EVs by 2030.

She called for more distributed energy (meaning generation at the site), noting the cost-saving benefits of no distribution losses (contributing to overall savings typically of 20 to 50 per cent for businesses), with increased savings after the financing period, including from the 25-year lifetime panel warranty as well as the ability to earn from net billing programmes for low-capacity commercial and residential customers.

In particular, she noted that the Income Tax (Amendment) Act, 2024, with an income tax credit at 30 per cent of the acquisition and installation cost of the solar photovoltaic system for a taxpayer’s primary residence, up to a maximum cost of $4 million from this January onwards, and that solar systems and lithium-ion batteries are general consumption tax (GCT) exempt.

Wigton, the largest renewable energy independent power producer in Jamaica (at six per cent it is a third of Jamaica’s installed renewable capacity, which totals 18 per cent of Jamaica’s energy supply), has just been awarded 49.83 megawatts of solar capacity and is replacing 20.7 megawatts of wind, which will make it the largest solar energy supplier at 70.53 megawatts in two years’ time.

In his presentation, Charles Chambers, CEO of West Indies Petroleum, argued the cost of energy fundamentally shaping Caribbean economies by driving investment decisions, infrastructure development, and our very lives, impacting everything from food preparation to transportation, manufacturing, and essential services.

He observed that Jamaicans pay $6 per gallon for fuel while US consumers pay US$2.50, with electricity costs up to 49 cents per kilowatt hour compared to four cents in places like Houston. The core drivers of cost include ad hoc infrastructure not designed for today’s Jamaica; a tax burden on fuel of 60 per cent passed directly to consumers, and a fragmented regional approach.

Expanding on his last point, he noted that despite having significant storage capacity across the Caribbean — 32 million barrels in St Croix, 16 million in The Bahamas, 12 million in St Eustatius, and significant capacity in Curacao, Trinidad, and Aruba — the region has failed to leverage these assets. Chambers used his company, West Indies Petroleum, as an example of a response to these issues.

In strategic infrastructure deployment the company has invested over 850,000 barrels of storage capacity across carefully chosen locations to achieve economies of scale and help lessen price fluctuations.

In operations, he said, the company has extended operating hours from 3:00 am to 6:00 pm, six days per week, and achieved 45-minute terminal turnaround times.

In marketing, he noted that West Indies Petroleum supplies approximately 80 per cent of Jamaica’s independent gas stations, helping democratise and nationalise access to fuel supply.

Chambers argued, “We are water-borne states” that need deep water ports to bring the fuel here at the lowest possible cost. He noted that CMA CGM, a French shipping and logistics company, invested $300 million to dredge Kingston Harbour from 12 to 15 metres for Panamax vessels, thereby making Kingston Harbour part of a global logistics hub.

Chambers called both for action on tax reform and energy incentives and the building of private sector infrastructure as part of a comprehensive, deliberate, collaborative, and decisive public-private partnership approach to energy infrastructure, taking advantage of literally trillions of dollars in global infrastructure funds seeking reliable, long-term returns.