Wigton to resume carbon trade
WIGTON Windfarm, the largest windfarm in the English-speaking Caribbean, is set to resume the sale of carbon credit amid the Jamaica-based renewable company’s declining profitability and escalating operational costs.
Arising from this, the company is anticipating growing earnings from the trade of carbon credits to heavily industrialised countries. Already, Wigton is in the process of verifying and certifying emission reductions from its Phase I and Phase II windfarm facilities in Rose Hill, Manchester.
The two facilities are the 20.7 MW Wigton I, which began operating in 2004 and Wigton II, an 18 MW extension facility that was commissioned in 2010. Chairman Oliver Holmes and Managing Director Earlington Barrett say this verification and certification is expected to result in Wigton’s resuming the sale of carbon credits.
Wigton has been able to successfully trade carbon credits under an emissions reduction purchase agreement with the Dutch Government under a nine-year agreement reached in 2005, under which it is paid €5.5 for every tonne of carbon dioxide saved. Electricity generation from Wigton’s 100 per cent clean energy facility during the December 2021 quarter resulted in a total of 19,588 tonnes in carbon emissions reductions for Jamaica.
The verification and certification would see it being able to resume trading carbon credits in which countries like Jamaica, whose carbon emissions fall below a set allowance, able to sell the difference, in the form of credits, to other countries like The Netherlands that exceed their carbon credit limits.
In the meantime, Wigton is seeking to position itself to exploit diversification opportunities. The company’s designation as the thematic hub for wind energy in the region by the Caribbean Centre from Renewable Energy and Energy Efficiency has aided in this endeavour.
Discussions are ongoing with the relevant regulatory authorities around the timing of the next request for proposal for the addition of new renewable energy generation to Jamaica’s national grid.
Wigton’s management advised shareholders in its December 2021 quarterly report that “the company continues its efforts to grow the business by investing in new ventures, being ready to respond to any new calls for additional renewable energy to the national grid, establishing partnerships and continuing to prudently manage expenses as the primary focus areas of management”.
This is seen as crucial, given
the declining profitability and rising costs. During Wigton’s combined three quarters from April to December 2021, the company suffered a big reduction of 53.1 per cent in net profit.
This decrease was as a result of equipment maintenance cost, lower levels of production and the impact of the contractual rate reduction for Wigton Phase II. Total revenue during the period was $1.8 billion representing a $283.6 million or 13.7 per cent decrease when compared to the amount for the corresponding period in 2020.
Total expenses for the yearto-date period increased by $30.5 million or 2.1 per cent over 2020.
Wigton experienced a lower wind regime for the quarter with the management blaming this on the La Niña phenomenon, which has been in effect for the last two years. La Niña has had the effect of reducing the pressure differences across the region.
This lowered the wind speed experienced and, coupled with the lower availability of the turbines, translated into lower production from the wind turbines. Also, the average plant availability rate was approximately 88.9 per cent during the review period well below the projected target of 94.3 per cent because of the wind turbines being out of operation during the period to facilitate major maintenance activities.