college of business and hospitality management · 2015. 3. 16. · college of business and...
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- Theme -
"Wholistic Synergy: Transformational Solutions through Research"
Presenter: Earl Green, Ph.D; PMP
Associate Professor
Contact: 876 505-9656
College of Business and Hospitality
Management
Exploiting Entrepreneurial Prospects in Energy Efficiency in Jamaica
Abstract
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Prevailing market configurations and dynamics within the energy sector in Jamaica
suggest a disconnect between the current market construct and potential opportunities for
energy efficiency, which in many respects appears to be inhibiting entrepreneurial
proclivity within the sector. This is somewhat confounding as it means that business
opportunities are not being exploited which impairs the growth of the sector, but more
importantly, the longer term sustainable development of the economy. To better understand
this disconcerting phenomenon, the author investigates the influence of the prevailing
institutional and structural build out of the sector, and the extent to which market
orientation and awareness impact the uptake of business opportunities. The author
postulates an industry energy efficiency value chain, an enabler to better understanding the
value and immediacy of business opportunities within the sub-sector. The results suggest
that business opportunities in the energy sector in Jamaica may be better exploited if
foundational support is prioritized by way of policy modifications, culture shift, and
awareness. The author also provides a platform for additional discussion on future
implementation and research options.
STRUCTURE OF PRESENTATION
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1. SECTORAL ANALYSIS OF ENERGY END USE
2. ANALYSIS OF FISCAL INCENTIVES
3. REVIEW OF REGULATORY AND INSTITUTIONAL FRAMEWORKS
4. THE FUTURE OF ENERGY IN JAMAICA
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28%
31%
18%
9%
9%5%
Petroleum Consumption by Sector
Road & Rail Transport Electricity Generation Bauxite/Alumina Processing Aviation Shipping Residential
LARGE SERVICE PROVIDERS
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Electricity Generation Sources in Jamaica as at February 2015
95%
3%
2%
Sources of Electricity Generation
Oil Hydro Wind
Source: MSTEM 2015
SECTORAL ANALYSIS OF ENERGY END USE
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Public SectorYear
2011 2013 2014
Total Electricity Consumption (GWh) 411 477 475
% of Total National Electricity Consumption in
mentioned year10% 15% 16%
Source: MSTEM 2015
TOTAL ENERGY CONSUMPTION FOR PUBLIC SECTOR
THE INDUSTRIAL SECTOR
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Sector Energy Cost as % of total manufacturing cost
Aluminium 60-70
Cement 35-40
Paper 22-25
Glass and Ceramics 20-25
Foundry 15-20
Textile 12-15
Chemicals 10-15
Engineering 8-10
ENERGY SHARE IN MANUFACTURING COST
Source: Manufacturers Association of Jamaica 2014
THE INDUSTRIAL SECTOR
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0
5
10
15
20
25
30
35
40
Ele
ctri
city
Pri
ce (
US
$/k
Wh
)
Electricity Prices - Residential Consumers
REGIONAL AND EXTRA-REGIONAL ENERGY PRICES FOR RESIDENTIAL CUSTOMERS IN 2014
Source: US DOE 2015
Energy Efficiency Targets, Indicators, Rewards and
Penalties
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Creating a Conducive Policy Environment for the
ESCO Industry
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Key Factors Influencing the Development of En-business
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Technical Capabilities
Pre-requisites
Ability to identify, develop, implement andsustain a cost effective energy efficiencyprogramme with participation from key andinfluential stakeholders.
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Credit Worthiness
The ability to raise or arrange project based
financing from local commercial banks in a
structured and efficient manner.
Key Factors Influencing the Development of En-business
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Strategic Market Focus
Definition and presentation of a market.The public sector is normally given up tothe market.
Key Factors Influencing the Development of En-business
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Regulatory Aspect
An enabling legal framework that would
recognize clearly the status and specificities of
an energy performance contract, supported by a
justice system that can efficiently enforce
contractual agreements.
Key Factors Influencing the Development of En-business
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Standards Specifications
The presence of a neutral third-partyinstitution that certifies ESCO productsand/or services as an importantcommercial imperative.
Key Factors Influencing the Development of En-business
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Consumer Awareness
An appropriate institutional framework
with supporting programmes to facilitate a
good understanding of the energy
performance contracting concept.
Key Factors Influencing the Development of En-business
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The following represent three (3) additional challenges that could derail an ESCO development initiative if not strategically and effectively addressed.
False Reliance Provision of an alternate technical support mechanism.
Inadequate Institutional Support Use of Government facilities to anchor ESCO industry.
Structural and Political Barriers Government commitment to system that precludes unnecessary and inappropriate intervention.
Key Factors Influencing the Development of En-business
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Key Factors Influencing the Development of En-business
Determination of Adequacyof Existing Legal andRegulatory Framework
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# Acts & Regulations (Laws) Suitability of existing
Laws
Gap Recommended Treatment
1 Law of Contract Yes Currently there are no Model energy type Contracts
available or in use.
Preparation of Model energy type Contracts based on public
sector procurement policy.
2 Standards Act Yes Limited energy efficiency standards for equipment and
systems.
Bureau of Standards to develop, adopt, and/or adapt supporting
standards specifications.
3 Energy Efficiency Building Code
Yes Pending implementation for extended period. Key to
sector development.
Government to determine ownership and swiftly promulgate the Energy
Efficiency Building Code.
4 Energy Efficiency Building Code
Yes Pending implementation for extended period. Key to
energy sector development.
Government to determine ownership and swiftly promulgate the Energy
Efficiency Building Code.
5 Net Billing Regulation Yes None None
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# Acts & Regulations (Laws) Suitability of existing Laws Gap Recommended Treatment
6 Custom Act Yes None None
7 GCT Act Yes None None
8 Petroleum Quality Act Yes None None
9 All Island Electric Licence 2001 Yes None None
10 Petroleum Quality Act Yes None None
11 Net Billing Regulations Yes None None
12 Natural Resources Conservation Authority (Air Quality)
Regulations
Yes None None
13 Bank of Jamaica Act Yes None None
THE FUTURE OF ENERGY IN JAMAICA - SOLUTIONS
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Entrepreneurial Prospects – Energy EE Value
Chain for Jamaica
US$2.4 B
# 1
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THE FUTURE OF ENERGY IN JAMAICA - SOLUTIONS
# 2
Energy performance contracting (EPC)
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THE FUTURE OF ENERGY IN JAMAICA - SOLUTIONS