FUELLING OUR OWN GROWTH Budget Debate Presentation 2013 Hon. Phillip Paulwell, MP Minister of Science, Technology, Energy and Mining April 24, 2013
Ministry of Science, Technology, Energy and Mining Budget Presentation 2013-2014 Fuelling Our Own Growth Presented by Hon. Phillip Paulwell, MP Minister Wednesday, April 24, 2013
Fuelling Our Own Growth Table of Contents INTRODUCTION..............................................................................................1 ENERGY...............................................................................................................2 State of Energy in Jamaica..................................................................................................3 Energy Effjciency and Conservation.................................................................................3 Renewable Energy................................................................................................................5 Incentives, Policy and Regulatory Framework...............................................................7 Wheeling.................................................................................................................................8 The Rural Electrifjcation Programme...............................................................................8 Jamaica’s Energy Infrastructure.........................................................................................9 360 MW Bid.........................................................................................................................10 Petcom, Fuel, Petrojam Ethanol.......................................................................................11 Chavez, PetroCaribe and Venezuela..............................................................................13 MINING.............................................................................................................14 UC Rusal Update.................................................................................................................15 CAP Update..........................................................................................................................17 Noranda.................................................................................................................................18 REE, Limestone and other Minerals...............................................................................18 SCIENCE, TECHNOLOGY AND INNOVATION...................................20 Minister’s Innovation Awards ........................................................................................20 Government Laboratories and the Scientifjc Research Council...............................22 INFORMATION & COMMUNICATION TECHNOLOGIES..............23 E-Government and GovNet..............................................................................................23 The Universal Service Fund............................................................................................25 E-Learning and the Schools’ Tablet Computer Programme......................................26 700 MHz Auction and MTR Reduction..........................................................................28 CONCLUSION.................................................................................................30 Appendix 1: Accomplishments.....................................................................................................I Appendix 2: MSTEM Agencies..................................................................................................XI
Fuelling Our Own Growth INTRODUCTION INTRODUCTION M r. Speaker, I rise in support of the motion in this 2013/2014 Budget Debate, truly a critical point for our country, our economy and the well being of our people. Over the past 15 months, as we negotiated this new crucial IMF Extended Fund Agreement from the ru- ins of the failed Stand-by Agreement, we have had to face many harsh realities, but none so clear as the fact that without economic growth and development, we face the real possibility of being back at square one. All Jamaicans must be determined that this should not happen. But, Mr. Speaker, while we recognize the importance of an IMF agreement, this Administration is under no illusion that IMF agreements alone are the solution to our problems – they only give us a breathing space for us to get our act together. We know that it is only the hard work and dedication of the Jamaican people to achieve the development of our country that will result in lasting change. When my Prime Minister, the Most Honourable Portia Simpson Miller gave me the respon- sibility to lead the Ministry of Science, Technology, Energy and Mining, I decided that for my Ministry to be most effective, my primary goal as the Minister would be to help find avenues to fuel growth in our economy. Let us be very clear, growth is only sustainable when it brings tangible and long-term benefits to a broad spectrum of the Jamaican society. To do less than that is to fail those in the middle and working classes who look for leadership that will give them more than a push start. And so this afternoon Mr. Speaker, I will focus on those areas of the Ministry of Science, Tech- nology, Energy and Mining (MSTEM) which fuel and support growth and development, which will form the main pillars for the modernization of the Jamaican economy and which together represent vast opportunities for all Jamaicans. - Page 1 of 32 -
Fuelling Our Own Growth ENERGY ENERGY M r. Speaker, I begin with the important topic of energy, which continues to be the centrepiece of any strategy for growth and development. Energy is a small word that has many different meanings to different people. To the business community, energy is the engine that makes the wheels turn efficiently. To the consumer ener - gy means the dreaded light bill. Due to the high cost of energy in Jamaica, the little man and woman have been feeling the pinch to the point where for some householders, the monthly light bill is more than the rent, for some it is more than the mortgage and in some cases – it is more than the grocery bill. The small business owner has to choose between laying off staff or paying for electricity. As Minister, it is my objective to find a way to bring long-term relief to the business community, and just as importantly – for the young couple who live in Portmore, the family in Discovery Bay, the returning resident in Mandeville, or the old lady who lives in one room in the heart of Jones Town. For too long, our people have had to sacrifice their electricity service so that they can send their children to school or buy their medical supplies. The high cost of energy is Jamaica’s chief impediment to growth and job creation, and until and unless we find ways to reduce our energy costs and our dependence on imported oil, there will be little prospect of economic growth for our nation. In our search for solutions to this energy problem, the National Energy Policy (NEP) has guid- ed the work being done by MSTEM. The policy, Jamaica’s first long-term energy plan, was ap - proved by this Parliament in November 2010 with bi-partisan support. In the policy, Jamaica’s vision for energy is outlined as: “a modern, efficient, diversified and environmentally sustainable energy sector”. The policy has seven ultimate outcomes which include: the provision of more affordable ener- gy supplies to Jamaican consumers, an improved competitive base for the country, as well as sustainable growth and development of the nation. The policy supports Vision 2030, Jamaica’s National Development Plan which has the broad - Page 2 of 32 -
Fuelling Our Own Growth ENERGY national strategic objective to “provide a secure and sustainable energy supply for our country,” including diversifying the energy supply and promoting energy efficiency and conservation. Since assuming office over a year ago, energy has been my main focus, and particularly, how to get the cost of electricity down from approximately $0.42 US per KWh – one of the highest rates in the world – to a rate that allows our businesses to compete internationally, and our citizens a more affordable energy bill. Indeed Mr. Speaker, the issue of energy affordability was a key part of the mandate secured by this Administration in the 2011 General Election, and so it is an imperative to deal with all the related issues to enhance the possibility of sustainable economic development. State of Energy in Jamaica Energy consumption in Jamaica is inefficient, expensive and so un - sustainable, it has been at the centre of Jamaica’s economic blight. Last year Jamaica spent Mr. Speaker, this is not confined to the electricity sector alone, but $222 rather is the case in all areas of our energy consumption. million In 2012, Jamaica spent $222 billion on the importation of crude or 15.5% of and refined petroleum products. That is some 15.5 per cent of GDP GDP which compares to an international standard of between two and nine per cent for nations larger and smaller than us. on imported oil Mr. Speaker, this is not sustainable. We not only realize this in the Ministry, but we have been doing something about it. Our approach has been to tackle this through focusing on conservation and renewables, the legislative and regulatory framework, and in- vestment in our energy infrastructure. Energy Effjciency and Conservation Mr. Speaker, we must begin to treat energy efficiency and conservation as our first indigenous fuel, indeed a strategic national resource. Energy efficiency and conservation is a national resource because it has the potential to achieve - Page 3 of 32 -
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