Jamaica Sustainable Energy Roadmap Pathways to an A!ordable, Reliable, Low-Emission Electricity System October 2013 Project Director: Alexander Ochs Project Manager: Mark Konold Report Authors: Shakuntala Makhijani, Alexander Ochs, Michael Weber, Mark Konold, Matthew Lucky, Asad Ahmed Editor: Lisa Mastny Typesetting and Layout: Lyle Rosbotham This project is part of the International Climate Initiative. The Federal Ministry for the Environment, Nature Conservation and Nuclear Safety supports this initiative on the basis of a decision adopted by the German Bundestag. The views expressed are those of the authors and do not necessarily represent those of the Worldwatch Institute; of its directors, o"cers, or sta!; or of its funding organizations. Suggested Citation: Shakuntala Makhijani, Alexander Ochs, et al., Jamaica Sustainable Energy Roadmap: Pathways to an A!ordable, Reliable, Low-Emission Electricity System (Washington, DC: Worldwatch Institute, 2013). On the cover: Wigton Wind Farm, Manchester, Jamaica. Photo courtesy of Mark Konold. © 2013 Worldwatch Institute Washington, D.C. Jamaica Sustainable Energy Roadmap Pathways to an A!ordable, Reliable, Low-Emission Electricity System Worldwatch Institute Washington, D.C. October 2013 2 | Jamaica Sustainable Energy Roadmap Contents Preface 8 Acknowledgments 10 Executive Summary 11 1. Developing a Sustainable Energy Roadmap for Jamaica: An Integrated Approach .................................................. 17 1.1 Jamaica’s Sustainable Energy Transition in the Global Context 17 1.2 Sustainable Energy Roadmap Methodology: Goals and Challenges 19 1.3 Jamaica’s Current Electricity System 22 1.4 Summary of Jamaica’s Current Energy Situation, and Moving Forward 27 2. Energy E!ciency Potential................................................28 2.1 Background 28 2.2 De!ning Priority Sectors for E"ciency Measures 29 2.3 Electricity Generation 29 2.4 Electricity Transmission and Distribution 31 2.5 Bauxite and Alumina Sector 31 2.6 Hotel and Tourism Industry 32 2.7 Residential Sector 33 2.8 National Water Commission 34 2.9 Summary of Jamaica’s Energy E"ciency Potential 34 3. Renewable Energy Potential ..............................................36 3.1 Building on Existing Assessments 36 3.2 Solar Power Potential 37 3.2.1 Global Status of Solar Power 37 3.2.2 Current Status of Solar Power in Jamaica 38 3.2.3 Solar Power Potential 38 3.2.4 Summary of Solar Power Potential 41 3.3 Wind Power Potential 42 3.3.1 Global Status of Wind Power 42 3.3.2 Current Status of Wind Power in Jamaica 42 Contents | 3 3.3.3 Wind Power Potential 42 3.3.4 Summary of Wind Power Potential 46 3.4 Hydropower Potential 48 3.4.1 Global Status of Hydropower Technology 48 3.4.2 Current Status of Hydropower in Jamaica 48 3.4.3 Small Hydropower Potential 48 3.4.4 Summary of Small Hydropower Potential 50 3.5 Biomass Power Potential 50 3.5.1 Global Status of Biomass Power Technology 50 3.5.2 Current Status of Biomass Power in Jamaica 51 3.5.3 Biomass Power Potential 52 3.5.4 Summary of Biomass Power Potential 54 3.6 Waste-to-Energy Potential 55 3.6.1 Global Status of Waste-to-Energy Technology 55 3.6.2 Current Status of Waste-to-Energy in Jamaica 55 3.6.3 Waste-to-Energy Potential 56 3.6.4 Summary of Waste-to-Energy Potential 58 3.7 Alternative Renewable Energy Technologies 58 3.7.1 Wave and Tidal Energy 58 3.7.2 Geothermal Energy 59 3.8 Summary of Renewable Energy Potential 60 4. Grid Improvement and Energy Storage ....................................62 4.1 Overview of Jamaica’s Existing Grid 62 4.2 Decentralized/Distributed Generation 63 4.3 Grid Connection and Integration for Centralized Generation 65 4.4 Integrating Complementary Renewable Energy Resources 68 4.5 Operations, Markets, and Forecasting 70 4.6 The Role of Oil and Gas Generation in O#setting Variability 72 4.7 Electricity Storage 73 4.8 Curtailment 73 4.9 Summary of Grid Improvements for a Renewable Energy System 76 5. Technological Pathways for Meeting Jamaica’s Future Electricity Demand ....78 5.1 Demand Projections 79 5.2 Scenario Types 79 5.3 Scenario Results: Yearly Analysis 81 5.4 Scenario Results: Hourly Analysis 84 5.5 Scenario Results: Storage 89 5.6 Conclusion 91 4 | Jamaica Sustainable Energy Roadmap 6. Assessing the Socioeconomic Impacts of Alternative Electricity Pathways ....93 6.1 Analysis of the Levelized Costs of Electricity Generation 94 6.1.1 Methodology 94 6.1.2 LCOE Results 95 6.2 LCOE+: Assessing the Full Costs of Alternative Electricity Sources 97 6.2.1 Methodology 97 6.2.2 Costs of Local Pollutants 97 6.2.3 Costs of Global Climate Change 99 6.2.4 Results 100 6.3 LCOE Projection: The Future Costs of Electricity Generation 102 6.3.1 Methodology 102 6.3.2 Results 102 6.4 Macroeconomic Impacts: Bene!ts of Transition to Renewable-Based Electricity Systems 103 6.4.1 Falling Costs of Electricity Generation 103 6.4.2 Saving Billions on Reduced Fossil Fuel Imports 105 6.4.3 Investment versus Total Cost of Electricity: Upfront Costs But Long-term Savings 105 6.4.4 CO2 Emissions Savings 108 6.4.5 Job Creation 110 6.4.6 Impact on Economic Sectors 115 6.4.7 Gender Impacts 115 6.5 Conclusions 115 7. Sustainable Energy Finance in Jamaica: Barriers and Innovations...........117 7.1 Strengthening Capacity of Domestic Financial Institutions 118 7.1.1 Sustainable Energy Credit Lines in Jamaica: Progress and Barriers 119 7.1.2 Capacity Building and Awareness-Raising to Improve Energy Financing 122 7.1.3 Summary of Domestic Sustainable Energy Financing 122 7.2 Accessing International Sustainable Energy Finance 122 7.2.1 Harnessing Private International Finance 123 7.2.2 Traditional Development Assistance for Sustainable Energy Projects 124 7.2.3 The Future of Climate Finance: From the Clean Development Mechanism to Nationally Appropriate Mitigation Actions 124 7.3 Financial Summary Recommendations 126 8. Policies to Harness Sustainable Energy Opportunities in Jamaica...........128 8.1 Establishing a Long-Term Sustainable Energy Vision 129 8.2 Administrative Structure and Governance 130 8.2.1 Mainstreaming Sustainable Energy Policy and Regulation 131 8.2.2 Reforming Electricity Sector Regulation 131 Contents | 5 8.2.3 Streamlining Renewable Capacity Permitting: A Single Administrative Window 132 8.2.4 Establishing a Greenhouse Gas Monitoring Program 135 8.3 Recommendations for Strengthening Existing Policies 135 8.3.1 Energy E"ciency Measures 135 8.3.2 Renewable Energy Measures 138 8.4 Recommendations for Future Sustainable Energy Policies 144 8.4.1 The Modernize Electricity Act 144 8.4.2 Ongoing Competitive Renewable Tenders 144 8.4.3 Feed-in Tari! System 144 8.4.4 Tax Credits 145 8.4.5 Guaranteeing Grid Access and Priority for Renewable Capacity 145 8.4.6 Strengthening Grid Equipment and Operating Regulations 145 8.4.7 Loan Guarantees for Large-Scale Sustainable Energy Investments 145 8.5 Summary of Policy Recommendations 145 9. Jamaica’s Energy Outlook: Transitioning to a Sustainable Energy System....147 Endnotes 149 Appendices (begin after page 161) Appendix I. 3TIER Solar and Wind Assessments Appendix II. Past and Ongoing Renewable Resource Assessments Appendix III. 3TIER Solar Assessment Methodology Appendix IV. E#ects of Wind and Temperature on Solar Potential Appendix V. 3TIER Wind Assessment Methodology Appendix VI. Fuel Costs for Alternative Energy Scenarios Appendix VII. Renewable Procurement Processes Prior to November 2012 Appendix VIII. Selected Private Financial Institution Loan Package Terms for Businesses in Jamaica Appendix IX. Internationally Funded Energy E"ciency and Renewable Energy Projects Appendix X. International Financing Institutions Appendix XI. Electricity Governance Structure in Jamaica Appendix XII. Electricity Price-Setting in Jamaica Appendix XIII. General Consumption Tax Exemptions and Recommended Import Duty Exemptions List of Figures Figure 1.1. Worldwatch Methodology for Sustainable Energy Roadmap Development 20 Figure 1.2. Share of Electricity Generation by Source, 2009 22 Figure 1.3. Share of Petroleum Consumption by Activity, 2010 23 Figure 1.4. Electricity Prices for Residential Consumers, 2011 25 Figure 1.5. Electricity Prices in Jamaica by Sector, 2005–2011 25 Figure 1.6. Share of Electricity Sales in Jamaica by Sector, 2011 26 Figure 2.1. Regional Electricity Consumption Compared to GDP per Capita, 2010 30 6 | Jamaica Sustainable Energy Roadmap Figure 3.1. Average Global Horizontal Irradiance (GHI) in Jamaica 38 Figure 3.2. Comparison of Monthly Average GHI, Selected Jamaican Zones vs. Germany 39 Figure 3.3. Share of Jamaican Households with Water Heating Systems in 2006, by Type 40 Figure 3.4. Wind Anemometer Measurement Sites 44 Figure 3.5. Wind Speed Map of Jamaica at 80 Meters 45 Figure 3.6. Seasonal Variability of Wind Zone Capacity Factors at 80 Meters 46 Figure 3.7. Daily Variability of Wind Zone Capacity Factors at 80 Meters 47 Figure 3.8. Biogas Flow Calculation for Riverton 57 Figure 3.9. Renewable Energy Site Assessments in Jamaica 61 Figure 4.1. Jamaica Electricity Grid 63 Figure 4.2. Cost Estimates of Grid Connection in Jamaica 66 Figure 4.3. Seasonal Wind and Solar Variability in Jamaica 69 Figure 4.4. Daily Wind and Solar Variability in Jamaica 70 Figure 4.5. Typical Weekday Load Pro!le in Jamaica 71 Figure 5.1. OUR Projections for Jamaican Energy Demand, 2009–2030 79 Figure 5.2. Energy Demand and Generation Under BAU, 2012–2030 81 Figure 5.3. Energy Demand and Generation Under Scenario 1 (RE/Gas), 2012–2030 83 Figure 5.4. Energy Demand and Generation Under Scenario 2 (RE/Coal), 2012–2030 83 Figure 5.5. Energy Demand and Generation Under Scenario 3 (RE/Oil), 2012–2030 83 Figure 5.6.