Ministry of Commerce, Science and Technology

Minister of Commerce, Science and Technology who also has portfolio responsibility for the Energy Sector, the Hon. Phillip Paulwell has sounded the alarm bell that the country is now facing an energy crisis.

Speaking in the Sectoral Debate yesterday afternoon, Minister Paulwell told the nation that given Jamaica’s dependence on imported oil for a high percentage of its energy needs “we have to brace ourselves for sustained increases in oil prices”.

He said that last week world market oil prices reached US$40 per barrel and it was now safe to say that the days of US$20 a barrel for crude is now history and the country must plan on US$40 a barrel.

Minister Paulwell attributed the dramatic increase in oil prices to the following three factors:

1. the US/Iraqi war;
2. the conflicts in Venezuela and
3. pressures and demand exerted by China.

Last year he said Jamaica imported 27.1 million barrels of fuel oil and the bill raced towards US$1 Billion mark reaching a total of US$813 million. In terms of volume, the increase over 2002 was 7.5% but in terms of cost, the increase was 27%. This oil bill now accounts for a whopping 24% of total imports.

Given our dependence on imported oil for such a high percentage of our energy needs, the continuous increase in consumption must be addressed as a matter of urgency. Even though we might not be able to reduce consumption immediately, we can certainly improve energy efficiency and reduce energy intensity.

It is totally unsatisfactory that only 9 per cent of the economy’s total energy requirement and 5% of the electricity are provided by renewable sources.

Mr. Paulwell said that in view of the situation now confronting the country, the energy policy and strategy, which was approved by Parliament in November 1995, is being reviewed.

In the meantime, however, a number of other things are being done including:

The establishment of an Energy Efficiency Unit, headed by a Director (the “Energy Czar”) and mandated to lead the national effort in energy efficiency at both the demand and supply side and to establish a central point for the coordination of public and private sector initiatives.
The appointment of an Energy Coordinators Committee to promote conservation and efficiency in the public sector in an effort to achieve a savings of at least 10%.
Implementation of a 20 MW Windfarm in Manchester, at a cost of US$26 Million. This plant will be fully commissioned by the end of May.
Continued research on commercial fuel wood production, through the Petroleum Corporation’s demonstration project at Font Hill.
Sales and distribution of solar water heaters to promote wider use of solar systems.
Distribution of over 220,000 compact fluorescent lamps (CFL’s) as of March 2004
Providing training on energy efficiency and conservation to several Preparatory and High Schools

Emphasis in this current financial year will be on energy diversification and the development of policy mechanisms to increase indigenous renewable energy supply, such as wind, biomass and solar photovoltaic. Our efforts will focus on:

Updating the Energy Sector Policy to the account of current market and energy trading realities
Stimulating the development of an ethanol industry for both domestic consumption and the export market.
Developing a strategy to facilitate competition in the electricity generation and the wider use of co-generation.

New initiatives will include

Establishing a revolving Energy Trust Fund to wholesale loans for energy investments to residential and private sector users through certified financial institutions at development financing rates of interest.
Establishing a $70 Million Energy Efficiency Fund. This is to kick start the programme for hospitals to implement energy efficiency measures. The preliminary institutions will be the Cornwall Regional Hospital, St. Ann’s Bay Hospital the Princess Margaret Hospital and the Bustamante Hospital for Children where work will begin later this month.
Promoting public awareness of the need for behavioural change to bring about more efficient use of energy and conservation.
Introduction of new legislation to make energy efficiency mandatory in the building code.
Developing a 1.2 MW hydropower project at Laughlands Great River, St. Ann.
Promoting wider use of solar water heaters with a target of 25,000 installation over the next five years.
Promoting increase use of fluorescent lamps in residential homes.
Finalizing the development programme for the upgrading of Petrojam Oil Refinery.

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