JAMAICAN households spend 11 per cent of their income on electricity — triple the US average — as the island grapples with an almost 90 per cent reliance on imported fossil fuels that Prime Minister Andrew Holness aims to disrupt through a nuclear energy pact with Canada. A 2024 memorandum of understanding (MOU) with Atomic Energy of Canada Limited (AECL) targets small modular reactors (SMRs) within two decades, pitched as a solution to slash energy costs from $0.31/kWh and revive stagnant manufacturing.

The strategy faces scepticism from Opposition leaders, including shadow energy Minister Phillip Paulwell, who advocates solar expansion after successful 7¢/kWh bids, arguing nuclear’s decade-long roll-out cannot address immediate economic pressures. Jamaica’s 40-year-old SLOWPOKE-2 research reactor at The University of the West Indies, operational since 1984, underscores existing nuclear expertise but remains absent from public energy dialogues.

Holness frames SMRs as a “quantum leap” to diversify an economy dominated by tourism and services, while critics warn of grid limitations and legislative hurdles, including a 2015 law banning nuclear power plants. The debate highlights a nation balancing urgent cost-of-living concerns against long-term industrial ambitions.

WHEN Hurricane Beryl battered Jamaica in July 2024, it didn’t just uproot trees—it exposed the fragility of an economy tethered to aging factories and volatile energy costs. The fallout? A 4 per cent contraction in manufacturing by September, with refined petroleum output plunging after the storm forced a five-day refinery shutdown. Cement production crumbled, beverage exports dried up, and families felt the squeeze: 11 per cent of household incomes now go to electricity bills, triple the US average, according to a World Economic Forum report.

Prime Minister Andrew Holness is betting on atoms to reverse this spiral. On October 22, 2024, he signed a landmark nuclear energy pact with Canada—a bid to slash power costs, reboot factories, and wean Jamaica off its risky reliance on tourism.

“We are a service-based economy largely because the cost of energy is high. We have to figure out how to get the cost of energy lower in Jamaica so that we can build out more manufacturing-based industries,” Holness told an audience at the Jamaica Stock Exchange’s 20th annual Regional Investors and Capital Markets Conference in Kingston in January. In 2023, manufacturing contributed 8 per cent of Jamaica’s total output compared to the services sector which contributed 70 per cent.

Holness’ vision is to transform Jamaica into “an economic powerhouse” and for that to happen, he is clear, “we have to solve the energy issue.”

Currently, almost 90 per cent of the country’s grid is powered by fossil fuels — chiefly oil an gas — but with an average price of US$0.31 cents per kilowatt hour. But that is more than triple the US$0.11 cents paid on average in regional manufacturing hubs such as Mexico while the average cost for electricity across the United States is US$0.18 cents per kilowatt hour, according to the most recent data from Statista.com — a global data and business intelligence platform.

To bring down prices, the Government turned to liquefied natural gas (LNG) and has ramped up the inclusion of renewables into the grid, with a stated aim to have at least 50 per cent of the grid being powered by renewables by 2030. As of 2023, approximately 12 per cent of Jamaica’s total energy generation came from renewable sources — mainly wind and solar. Still, there are limitations.

“Renewables by nature are intermittent, they are non-dispatchable, so renewables alone is not a solution to the energy future that is going to deliver for this great nation,” Hugh Grant, president and CEO of Jamaica Public Service Company (JPSCo) — the national power distributor — said in January at the JSE conference.

Grant, who worked in New York at a nuclear power plant before returning to Jamaica to oversee the JPSCo in 2024, like Holness, believes that nuclear power added to the grid could be beneficial to the country. He, however, cautions: “However, we have to make sure that given the size of Jamaica, given the potential risks, that we do our due diligence around compliance, around maintenance, around the technologies and ensure that it is proven before we think of any adoption in terms of that.”

For Holness who acknowledged that renewable technology is rapidly improving, “it’s not going to give you the quantum that you need,” as he pressed the case for Jamaica to be ready to build small nuclear reactors (SMRs), when the technology is proven. It is now mainly under development across various countries.

A Historic Partnership: The Canada-Jamaica Nuclear Agreement

The memorandum of understanding (MOU) signed between Jamaica, Atomic Energy of Canada Limited (AECL), and Canadian Nuclear Laboratories (CNL) didn’t materialise overnight. It was the culmination of a relationship that began during Prime Minister Holness’s visit to the Canadian Nuclear Laboratories campus in October 2023, during his trip to Ottawa for the Caribbean Community Summit.

Howard Shearer, a board director at CNL, described the genesis of the new push for nuclear energy as he spoke at the signing of the MOU last October: “He saw the potential and the possibilities to bring an economic development and a great impact into Jamaica’s transition from fossil fuel to a greener type of energy.”

The MOU focuses on cooperation in nuclear science and technology, including potential development of nuclear power production, waste management strategies, and applications of radioisotopes in fields like healthcare and agriculture. A key component is knowledge transfer—the agreement includes provisions for “possible exchange of scientists and other specialists for research purposes; the exchange of technical information and research results; and the possible organisation of seminars and other meetings”.

Jamaica’s Little-Known Nuclear Heritage

What many Jamaicans may not realise is that their island has been operating nuclear technology for four decades. The SLOWPOKE-2 (Safe LOW-POwer Kritical Experiment) research reactor at The University of the West Indies, Mona campus, represents the Caribbean’s first and only nuclear reactor.

“Jamaica’s journey with nuclear technology began in 1984. Yes, Jamaica has nuclear expertise,” Holness noted during the MOU signing. “And in 1984, Jamaica established the Caribbean’s first and only nuclear reactor at The University of the West Indies, Mona, with the support of the European Union, and as you heard, this was a Canadian design reactor.”

This pool-type reactor operates at a modest 20 kilowatts of thermal power—thousands of times smaller than commercial power plants—and has been used primarily for research in environmental science, agriculture, and medical applications. The facility is managed by the International Centre for Environmental and Nuclear Sciences (ICENS), employing seven specialists including a reactor manager and radiation safety officer.

Small Modular Reactors: The Future of Nuclear Energy?

Jamaica’s nuclear ambitions centre specifically on SMRs — a new generation of nuclear technology that’s designed to be safer, more flexible, and potentially more affordable than traditional large nuclear plants.

These compact systems generate between 10 and 300 megawatts of electricity (compared to 1,000+ megawatts for conventional nuclear plants) and can be factory-built and shipped to installation sites, reducing construction time and costs. Their smaller size makes them potentially suitable for island nations like Jamaica, where large-scale infrastructure projects face space and resource constraints.

Prime Minister Holness emphasised the advantages: “In fact, today’s nuclear technology, especially small modular reactors, is far safer and more adaptable than it was in the past. So small modular nuclear reactors offer enhanced safety features, reduced environmental impact, and a cost-effective solution for small countries like Jamaica.”

SMRs incorporate passive safety systems that can automatically shut down without human intervention or external power if something goes wrong — addressing one of the most significant public concerns about nuclear energy.

The Storage Problem: Why Renewables Aren’t Enough

While Jamaica continues to expand its renewable energy capacity, with 268 megawatts of new renewable projects in the procurement pipeline, utility executives like Hugh Grant of JPSCo point to fundamental limitations of technologies like solar and wind.

“Renewables with storage in terms of batteries is a potential solution; however, the reality is you need long duration storage. And when I say long duration storage, currently with the technology, the longest you are getting out of storage is four to eight hours. That is not enough to deliver on a resilient, reliable grid,” Grant explained at the JSE conference earlier this year.

This storage gap means that even with substantial renewable capacity, Jamaica would still need reliable power sources that can operate continuously regardless of weather conditions—what energy experts call “dispatchable” power. Currently, only fossil fuels and nuclear fit this requirement, though research continues on alternatives like hydrogen blending.

Challenges on the Road to Nuclear

Despite the optimism surrounding the nuclear agreement, several significant hurdles remain before Jamaica could bring a nuclear power plant online.

The most formidable challenge is financing. The first small modular reactor at the Clinch River Nuclear Site near Oak Ridge in Tennessee, in the United States, could cost around US$5.4 billion for a 300-megawatt plant before tax credits or potential interest costs, according to data in a draft of Tennessee Valley Authority’s 2025 Integrated Resource Plan. The Tennessee Valley Authority (TVA) is a federally owned corporation in the United States, established in 1933, that provides electricity, manages the Tennessee River system, and promotes economic development in the south-east.

For context, Jamaica’s entire gross domestic product (GDP) was approximately US$20 billion in 2024, making financing such a project a monumental task without substantial international support.

There are also regulatory obstacles. Jamaica did pass the Nuclear Safety and Radiation Protection Act in 2015, establishing the Hazardous Substances Regulatory Authority (HSRA). However, there are indications this legislation actually includes provisions banning nuclear power plants—a contradiction that would need resolution before any nuclear project could proceed.

Public perception remains another challenge. Following the MOU announcement, concerns emerged among some Jamaicans about safety risks. Government officials responded at a technology conference in November 2024, assuring the public there would be “minimum risk to human health and the environment” as Jamaica explores nuclear applications.

The Long Road Ahead

Holness acknowledges that nuclear development is a long-term proposition—likely taking at least a decade before any power plant could come online. This timeline has prompted questions about why Jamaica is pursuing the technology now rather than waiting until it matures further.

The prime minister’s response emphasises the importance of developing local capabilities in parallel with the technology: “Of course, there are those who are going to say, well, why not wait until this technology is mature? The problem is anything that has to do with nuclear requires a long period of time, and it requires the development of local capabilities. If you don’t do it now, then not only will you have to import the capital and the actual small modular nuclear reactor, you’re going to have to import the technological skills and expertise as well, which will increase the cost of deployment.”

For the immediate future, the focus will be on knowledge acquisition and capacity building. The Government has already begun forming partnerships with Canada to train Jamaicans in nuclear technical skills, with Holness arguing that these skills would strengthen the economy even without immediate implementation of nuclear power.