Jamaicans are not likely to see any price reduction in electricity rates come 2016

Installed capacity of all the power plants in Jamaica currently stands around 820 MW, with steady state demand around 550 MW and an average  peak demand of just about 650MW.

Jamaica Energy Partners and well as Jamaica Private Power Company and Wigton provides approx  250MW of this about or roughly  30% of installed capacity and ~ 38% of peak demand. This figure is more than likely around 30% of peak demand if we assumed the plants run at less than stated installed capacity.

Further should we assume the more efficient plants are running at all time, it would stand to reason that the Private Power Plants would for the most part supply ~ 30% of peak demand .

The new Power Plant being proposed would mean an additional installed capacity of 434 MW and a running load of approx 400MW, which is roughly equivalent to what JPS currently supplies with its ageing plants.

So by simple maths we could have something like this.

Private Power Companies  220 MW (ONLINE some of the  time) 33%

New Power Provider  400MW (Online all the time) –  66%

JPS plants  30MW ( Peaking power)   – 1%

Current cost of power is approx US$0.42 /kWh

Assumptions

PPC provides power at lower cost that JPS lets say @ approx US$0.25kWh and sell to JPS @ US$0.32/kWh

JPS provides power at higher cost the IPP let’s say at $0.52/kWh

Average cost to the consumer is  US$0.42 /kWh

Now let’s make some further bold assumptions.

Let’s assume this new power plant produces at their stated US$0.15 per Kwh and sells to JPS at US$0.20 per kwh.

The table would now look like this

IPP  33% of demand at US$0.32/kwh

New Power Plant 66% of demand at US$0.20 per Kwh

JPS existing plant 1% of demand at US$0.52 per Kwh

Weight average cost is to JPS is therefore ~ US$0.25 per Kwh

When JPS adds its provisions  for Transmission and Distribution losses, theft, mark up etc, JPS will probably sell power to consumers at approx $0.32 per Kwh.

This represents a reduction of US$0.10 per Kwh or a 24% reduction in power to the consumer. Given the rate of devaluation which averages about 4% per annum (forget 2013) and possible  increased fuel tax of 16.5%,  the total accumulated change by 2016( in terms of % increase), when the plant comes on stream  would be about 24.66% thus wiping out all projected savings.

That folks is how commonsenseja calls hyping an situation, providing hope without the input of data to justify that optimism.

As a nation, we must seek to chart a different course by refusing to accept ” word of the mouth” pronouncement, let’s ask for data, let’s have all the assumptions made put it out there and let us be the judge.

For the Engineering community in Jamaica and the Diaspora,  please become more involved in the process, we need to hear your “independent” voices, we need to feel your input.

We have very competent power and generation engineers in Jamaica, so why have you all been silent.

If my numbers are correct, JPS will become an electrical distributor as core business, with very little generation and therefore it may be time to relook the JPS all island license in order to bring about greater benefits to the country.

These are what I term the show stopper or fundamental changes that are required if we are to avoid continuing down the slippery slope.

Based on my calculations EWI will be selling power to JPS  at a lower end of  $0.17/kwh to $0.20/kwh.

I will share with you guys how I arrived at these figures and all the assumptions I made.