ESET and lessons there­from

Jamaica Gleaner - - OPINION & COMMENTARY -

LAST WEEK’S in­au­gu­ra­tion of an LNG stor­age and re­gasi­fi­ca­tion fa­cil­ity, which al­lows the Ja­maica Pub­lic Ser­vice Com­pany’s (JPS) power-gen­er­at­ing plant at Bogue, St James, to be fired by nat­u­ral gas, is a game-changer to the Ja­maican econ­omy. The pre­dictably lower elec­tric­ity prices will make Ja­maican firms more com­pet­i­tive, do­mes­ti­cally and glob­ally.

But Bogue, and a raft of as­so­ci­ated projects, un­der­line what is pos­si­ble when nar­rowly par­ti­san pol­i­tics is re­moved from crit­i­cal ar­eas of na­tional life and we fash­ion com­pacts to the com­mon good.

Un­til re­cently, up­wards of 90 per cent of Ja­maica’s elec­tric­ity was gen­er­ated by burn­ing oil, which, mostly, is an ex­pen­sive com­mod­ity, traded in a volatile mar­ket, and which this coun­try does not pro­duce. For nearly two decades, Ja­maica de­bated con­vert­ing to cheaper, cleaner fu­els, and by and large reached a con­sen­sus on nat­u­ral gas.

Yet, we couldn’t get it done. When pol­i­tics didn’t in­ter­vene and spe­cial in­ter­ests weren’t pur­su­ing their own agen­das, there were con­cerns about the in­tegrity of the bid­ding process for the de­vel­op­ment and con­struc­tion of new coal-fired power plants and for the de­liv­ery of LNG.

Three years ago, in the midst of the lat­est of these sus­pi­cion-rid­dled, queru­lous de­bates, the for­mer Peo­ple’s Na­tional Party (PNP) administration, at the urg­ing of civil-so­ci­ety groups, set up the Elec­tric­ity Sec­tor En­ter­prise Team (ESET), with the man­date of es­tab­lish­ing a de­mand and in­vest­ment frame­work for the sec­tor. Essen­tially, it was a work­around that re­framed au­thor­ity that was pri­mar­ily in the hands of the Of­fice of Util­i­ties Reg­u­la­tion (OUR) and, in some re­spects, the ap­pro­pri­ate min­is­ter.

ESET mem­bers in­clude gov­ern­ment ap­pointees, as well as peo­ple named by the pri­vate sec­tor and pro­fes­sional groups. They all had ex­per­tise rel­e­vant to the task to which they were as­signed.

What is es­pe­cially note­wor­thy about ESET is its chair­man­ship.

It is led by Vin Lawrence, a well-known op­er­a­tive in PNP ad­min­is­tra­tions. But Dr Lawrence, an engi­neer, is a highly tal­ented man of sharp in­tel­lect and a rep­u­ta­tion for get­ting things done. It is against this back­drop, and given the im­por­tance of the work be­ing un­der­taken by ESET, that when the administration changed in Fe­bru­ary, this news­pa­per, among oth­ers, urged Prime Min­is­ter An­drew Hol­ness not to dis­rupt the team, or its lead­er­ship. To his credit, Prime Min­is­ter Hol­ness em­braced good ad­vice.

The ESET ini­tia­tive re­sulted not only in the Bogue con­ver­sion, but gave the green light for JPS, which gen­er­ates around 60 per cent of Ja­maica’s elec­tric­ity, to re­tire some of its old, in­ef­fi­cient plants in favour of a new 190megawatt, gas-fired fa­cil­ity. Other power gen­er­a­tors, in­clud­ing alu­mina re­finer­ies, are con­sid­er­ing ei­ther con­vert­ing ex­ist­ing gen­er­a­tors to gas or in­stalling new ones to burn the fuel.

An­other po­ten­tially vir­tu­ous con­se­quence of a set­tled pol­icy, built on na­tional con­sen­sus and sound eco­nom­ics, is the de­ci­sion by the US in­vest­ment group Fortress – con­tracted by JPS to de­liver LNG to the Bogue plant and the new one to be built at Old Har­bour, St Cather­ine – to at­tempt to fur­ther ex­ploit op­por­tu­ni­ties in Ja­maica.

They have talked about us­ing Ja­maica as a hub from which to de­liver LNG to other Caribbean coun­tries. In­deed, Fortress could in­vest up to US$1 bil­lion. Ac­cord­ing to its prin­ci­pal, Wes Edens, the com­pany is en­gag­ing not in a project, but in “build­ing a busi­ness”.

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