By addressing the immediate challenges of cost, infrastructure, and social norms, Jamaica can pave the way for a more sustainable and equitable energy future.

by Svyatoslav Karnasevych, '25 for Annotations Blog

This January, a group of SPIA students traveled to Jamaica on an experiential learning trip. The motivation for the trip was to study how a Small Island Developing State is confronting the energy transition, climate adaptation, waste management, environmental impact of mineral extraction, and conservation. The following is a synthesis outlining key challenges to Jamaica’s energy transition.

In meetings with officials from the Ministry of Transport and Mining, the Ministry of Economic Growth and Job Creation, and the Ministry of Science, Energy, and Technology, we were told about a yet-to-be-released-and-ratified update to the Integrated Resource Plan. The new policy will set an ambitious, 50% renewable energy generation target by 2030. As of 2023, only approximately 12% of total energy generation came from renewable energy sources. Setting aside that it is now 2024, and 2030 is six years away, Jamaica's journey toward sustainable energy is fraught with complex challenges. 

As a Small Island Developing State in the Caribbean, Jamaica already faces steeper costs to the energy transition than other states. 

As an island nation, Jamaica is heavily dependent on energy imports, making its costs high and volatile. At the same time, incomes are low relative to developed countries, creating challenges in financing the energy transition and making Jamaicans particularly sensitive to price increases. Without external support, the Jamaican government and the privately operated Jamaica Public Service Company (JPS) - the grid operator - face the dual task of keeping electricity prices low while phasing out fossil fuels through expensive capital investments. And because Jamaica relies on imports, this task is made harder by the high cost of imported renewable energy infrastructure and the lack of affordable storage solutions for non-intermittent power, such as batteries and nuclear power (the government is exploring the possibility of nuclear capacity on the island, although feasibility is an open question).

However, despite its negligible contributions to carbon emissions and scarce support from the countries most responsible for climate change, Jamaica remains committed to the energy transition, in part, because it offers the promise of lower costs in the long run. 

Three additional factors pose challenges to the energy transition:

Private power generation

As is standard practice, the grid operator, JPS, generates revenue from selling electricity to a mix of industry players and private households to cover the costs of buying and distributing electricity. In Jamaica, private industry makes up a relatively low percentage of the rate-paying customers. This is unusual among grid operators. Private industry, including the critically important tourism sector, tends to generate its own power (private players also often operate their own water treatment facilities and pumps). From the perspective of the firms involved, they believe that they can produce the energy more cheaply and more reliably than the grid operator can deliver it. As one JPS official put it: “Who wants to stay in a hotel in which the power goes out or the toilet stops flushing?”

This quirk of Jamaica’s energy landscape increases costs for users and the grid operator. First, electricity grids are large capital assets with fixed costs. Put another way, the grid was built to serve the entire island, and its maintenance and operational costs do not decrease when some private firms leave the grid. Additionally, when firms start generating their own power, this duplicates resources and creates operational inefficiencies. Together, these increase costs for JPS and the remaining users, who are already highly price-sensitive. Finally, private industry tends to be a more reliable ratepayer, unlike private households. 

Electricity theft

Transmission and distribution losses are normal features of any grid. But again, Jamaica is an outlier. Distribution losses are relatively high, not because Jamaica’s grid is less developed, but because electricity theft is a common practice.

Put simply, paying for electricity is costly. According to JPS officials, the household cost to connect to the grid is roughly USD 1,000, or one-fifth of the average annual income. The government sponsors a universal lifeline rate policy– a household’s first 100 kWh per month is free. However, in a country where the average household uses 165 kWh per month, this subsidy may not be enough for the most vulnerable populations.

However, electricity theft in Jamaica is not merely an economic issue. It also represents a social practice. Officials often pointed to socio-cultural norms to explain the high prevalence of electricity theft in the country. Rooted in a long history of client politics, households steal because they feel entitled to free electricity. Members of Parliament did and do promise free electricity to their constituents to win support; we met with officials who insinuated these promises often preclude the government from addressing areas with high levels of theft. Even though JPS has allegedly mapped these areas, government officials denied even knowing where they are located. 

Lack of skill retention and bureaucratic red tape 

Bureaucratic delays in green energy investment and challenges in retaining skilled personnel further complicate the energy transition. We frequently encountered references to problems with turnover and retention. Additionally, we witnessed frustration from renewable energy firms, the grid operator, and even government officials, with the long bidding process for new rounds of green energy investment. The update to the Integrated Resource Plan itself - its existence based solely on statements from the Prime Minister - highlights the level of bureaucratic delay and unclear guidance from the central government. 

Having identified these key challenges in the energy transition, I point to potential directions for change. 

These recommendations are drawn from our short experience in Jamaica and should only be considered in conjunction with the country’s complex socio-political dynamics in terms of feasibility. With that in mind, the government should consider: 

1. Incentivizing grid reintegration: encourage private industry to integrate into the national grid. This strategy must balance the economic importance of the tourism industry with the need for efficiency and equity in energy provision.
2. Revising the lifeline rate structure: address electricity theft and affordability by revising the lifeline rate to adequately support the most vulnerable populations. This approach should involve community input to avoid unintended consequences and ensure equity.
3. Subsidizing grid connection: increase affordability for households to legally connect to the grid. 
4. Focusing on community engagement and education: adopt a comprehensive strategy involving community engagement, education, and the reshaping of social norms regarding energy use and payment to address the socio-normative aspects of electricity theft and energy consumption.
5. Streamlining bidding processes: simplify the bidding process for renewable energy investments. This is crucial for meeting Jamaica's ambitious 50% renewable energy target by 2030 and requires a concerted effort to improve government efficiency and engage with stakeholders at all levels.

Jamaica's energy transition presents a unique set of challenges, rooted in economic disparities, infrastructural limitations, and socio-cultural norms. Overcoming these obstacles demands innovative policy solutions, stakeholder engagement, and a commitment to equity and sustainability. By addressing the immediate challenges of cost, infrastructure, and social norms, Jamaica can pave the way for a more sustainable and equitable energy future.

 Meet the Author: Svyatoslav Karnasevych

Svyatoslav is an MPA candidate at the School of International and Public Affairs concentrating in economics and public policy. Originally from Ukraine, Svyatoslav graduated from the University of Pennsylvania with a degree in Political Science and Economics. Before coming to Princeton, he worked as a research analyst at the Federal Reserve Bank of Philadelphia, studying housing, population, and location amenities. Svyatoslav is interested in urban policy, particularly housing affordability, transit access, and urban economic development.