Jamaica set to pilot mechanism to stimulate affordable renewable energy

May 3, 2019

Tamar Nelson (right) receives her certificate for participating in a workshop paving the way for Energy Performance Contracting in Jamaica, from UNDP Programmmes Specialist, Richard Kelly (centre). Looking on is Workshop trainer, Jacob Kurian from Grue and Hornstrup consulting firm

  • Will remove upfront cost as barrier

The innovative Energy Performance Contracting (EPC) mechanism is to be piloted in Jamaica as a means of stimulating uptake of renewable energy and energy efficient technologies in the public sector through up front financing, expertise and greater accessibility.

The EPC model offers the opportunity to develop a sustainable financing mechanism for renewable energy interventions in Jamaica, thereby removing up front cost as a barrier.

Support will be provided to design and implement the pilot programme in the health sector in partnership with the Petroleum Corporation of Jamaica (PCJ), under the UNDP and PCJ-implemented ‘Deployment of Renewable Energy and Improvement in Energy Efficiency Project’ funded by the Global Environmental Facility (GEF), PCJ and the Development Bank of Jamaica.

Energy Performance Contracting (EPC) provides customers with a suite of energy efficiency and renewable energy measures delivered typically by an Energy Services Company (ESCO). Among the services provided by the ESCO are energy audits, designing and planning, financing, construction and installation, as well as the evaluation and monitoring of energy use. According to project officials, ESCOs can help public entities overcome the lack of finances, time and expertise that local governments may face in identifying and implementing sustainable energy solutions.

In preparation for the pilot programme, UNDP and PCJ recently hosted a three-day workshop focused on building capacity of the team. The workshop welcomed 20 representatives of PCJ, Development Bank of Jamaica, the Jamaica Productivity Centre and project developers from the IDB’s Energy Management and Efficiency Programme (EMEP). The workshop was designed to improve understanding of the EPC concept and roles of ESCOs and Super ESCOs in implementing sustainable energy financing mechanisms; understanding of the risk mitigations for the development and implementation of EPCs; prepare participants to launch a Request for Proposal for the pilot; equip participants to undertake sustainable energy financing schemes within the public and private sector, geared at reducing Jamaica’s Energy Bill.

UNDP Programmes Specialist, Richard Kelly welcomed the workshop as a milestone in the journey to reduce the energy bill of Jamaica’s energy intensive public health sector. He said less reliance on fossil fuels not only reduces the national carbon footprint but could also release additional investments for sustainable development. Mr. Kelly said UNDP was pleased to be an implementing partner in this initiative which was consistent with its suite of solutions designed to tackle the multidimensional roots of poverty while catalyzing wealth creation and inclusive development.

Project Manager, Mr. Tenny Daley noted that this workshop is a first in a series of capacity building initiatives geared at increasing awareness and technical competence on ESCO operations and in implementing EPC projects. Over the next three months, webinars on the EPC model will be arranged to complement the recently concluded three-day workshop. Participants will include project developers, potential local ESCOs, financial institutions, academia and other key stakeholders. The capacity drive is designed to reduce the knowledge barrier in order to support effective implementation.

The project aims to build capacity in the public sector by increasing knowledge and skills on Renewable Energy (RE) and Energy Efficiency (EE); strengthen the regulatory framework that governs the development and deployment of RE and EE technologies; and overcome the barriers to public sector investment in RE and EE technologies that can reduce electricity consumption and greenhouse gas emissions. The four-year project, valuing US $12 million-dollar in cash and in-kind contributions, was launched in December 2016.