Its no secret Jamaica has a high energy cost and in particular electricity cost. Have you ever wondered why? Everyone thinks that the government and the Jamaica Public Service Company (JPSCo.) have been ripping Jamaicans off. Whether or not that is so I will not comment but here are a few charts to shed some light on energy and electricity issues that concern the Jamaican people daily.
Trends of the exchange rate and world oil prices can only mean high fuel cost for electricity generation. Relatively speaking the resulting trend for the cost of a barrel of oil in Jamaican dollars could look like the chart below.
Quick Notes:
- Jamaica consumed 20,305,842 barrels of oil in 2012
- Valued at US$2,213,473,615.00 or JM$196,977,016,998.85
- Average cost per barrel of oil - US$109.01 or JM$9,700.80
- Average exchange rate for 2012 US$1: JM$88.99
It is important to note that almost all of Jamaica's imported fuel is utilized in two major sectors: Transportation and Electricity Generation as noted in the chart below.
Given the all the data noted so far it can be concluded that JPSCo spent US$664,042,084.5 or JM$59,093,105,100.00 on oil purchases to fuel the nations electricity generation. With over 95% of the nations electricity needs being satisfied by imported fuel according to 2010 data. It is therefore obvious that electricity cost are highly driven by imported fuel cost.
Between 2010 and 2014 however, approximately 1 MW of solar, approximately 21 MW of wind and 6.3 MW of hydro renewable energy capacity has been added to the electricity grid. This represents a total of 28.3 MW of additional renewable energy capacity. This would bring total generation capacity to approximately 868.2 MW. This would also push renewable energy contribution to 8% of total electricity generated. Fossil fuel based electricity would therefore account for 92% of installed capacity. Add the fact that JPSCo has a system loss of approximately 25%. The Fuel and IPP Charges are therefore inevitably driven by factors mostly external to the nation's control.
Having established the obvious external trends such as ever higher oil prices and ever higher exchange rates one can couple this to local factors such as high demand for electricity and an infrastructure that is predominantly fueled by fossil fuels and Jamaicans should be able to conclude the factors behind high electricity rates. As a result Jamaicans can expect to pay more monthly for the foreseeable future.
Now given this projection should you desire to save money as result of energy cost or a more affordable energy bill feel free to look me up.
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