Funding an Offshore Wind Farm

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The funds from the recently failed LNG project which was expected to cost over US$602 million could be channeled to an offshore wind farm capable of lowering Jamaica's monthly energy bills permanently unlike the failed LNG project which was subjected to imported natural gas. In order to ensure that our country stops digging the 'borrow from Peter to pay Paul’ pit, the country needs to ensure that it has a solid project that will guarantee that we repay US$750 million dollars from the IMF Agreement, a venture that will pay off the loan, help to stabilize the economy, provide jobs and most importantly lower energy bills to boost local manufacturing. An offshore wind farm will provide all that and more, besides the environmental, economic and social impact, an offshore wind farm will drastically reduce oil importation, lower monthly energy bills and above all, will generate the revenue required to pay back the IMF without borrowing from another institution to do so. This article is the second in the series on offshore wind power in Jamaica, the first: "Put the Wind to Work", concentrated on how an offshore wind farm can work for our country, this article  will explore the finances of an offshore wind farm and compare the figures with that of the recently failed LNG project. These articles serve to present proof that 100% Renewable Jamaica is possible.

Kimroy Bailey working on wind turbines during his internship at the largest wind farm in English Caribbean 

An Offshore wind Farm Vs the LNG Project

Numerous Jamaicans, especially manufacturers, have impatiently waiting for lowered energy bills in order to produce internationally competitive products, were extremely disappointed after plans for a 360MW LNG Project failed to materialize earlier this year. This dream come true project was expected to lower energy bills by a whopping 62% to US₵15 per kilo watt hour according to [1]. This lowered energy price projected by the arrival of LNG was by no means permanent. This is due to the fact that our island does not produce the natural gas needed to run these turbines; therefore, like fossil fuel the island would be at the mercy of the gas suppliers. An increase in the imported gas prices would see a direct increase in monthly energy bill as the consumers absorb the loss.

100% Renewable Jamaica: A wind, solar, hydroand an energy conscious country.

A 360MW wind farm off the coast of Jamaica, would stand as one of the top 3 largest wind farms globally. The wind farm would create approximately 950 jobs for Jamaicans according to [5] during installation and while operating the farm. Similar to the Thanet offshore wind farm in England a Jamaican offshore wind farm will be able to reliably power 290,000 Jamaican homes [4]. Such an investment has the potential of earning the country US$288 million in gross revenues annually even if the farm produces below average at a 35% load factor. At this load factor about 1,152 GWh of energy would be produced annually and could be sold at US₵25 per kilo watt. This would result in a 40% decrease in energy cost compared to the US₵42 per kilo watt consumers currently pay.

Equating apples to apples: Offshore, better investment than LNG

A Jamaican wind farm producing 360MW costing would cost US$936 million to make the project possible[3] while the LNG project was expected to cost US$602 million. More importantly, LNG would require that the island spend an additional US$360 million annually to import the natural gas used to run the plant unlike the wind farm which only requires wind and maintenance to operate. Compared to the LNG project, investing in an offshore wind farm would provide a two fold benefit by first cutting a whopping US$295 million off the islands oil import bill while generating US$288 million in gross revenue. 

An offshore wind farm will cost more at the outset but will be able to pay off the IMF loan in less than 4 years after which the cost of energy would be further reduce to US₵15 per kilo watt while generate a gross income of US$173 million annually. The cost for operating an LNG plant would fluctuate proportionally to the cost of the gas the plants use. Furthermore, an offshore wind farm can also be maximize as a tourist hub a take us one step closer to 100% Renewable Jamaica. Since the 15 square miles of the sea used for the wind farm will be reserved, thousands of sea creatures and marine life can create their habitat for divers and water world enthusiasts to explore and embrace. Investing the IMF loan in a Jamaican offshore wind energy generation plant located out at sea will ensure that the loan is used for a project that will payback for itself while creating jobs, lowering the cost of energy to revive our fighting manufacturing industry and stabilize our nation’s economy. 

Be sure to share your thoughts by adding your comment below and read how our country can "Put the Wind to Work" here 

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