Stakeholders at odds over path to solar-powered EVs
A government ambition articulated by Finance Minister Dr Nigel Clarke to power electric vehicles, EVs, in Jamaica with energy from the sun by 2032 has been welcomed by EV business stakeholders, among them the island’s largest independent supplier of charging stations, Evergo. But the route to getting to the solar-powered EV destination, as part of the comprehensive policy being crafted by government, has interest groups at odds, the major bone of contention being whether and when the country’s laws will be changed to break the perceived stranglehold electricity distribution monopoly Jamaica Public Service Company, JPS, is seen by some interpretations to have on the fledgling industry through exclusivity clauses in its operating licence under the Electricity Act.
The JPS is currently the only licensed distributor of electricity. As such, EV charging operations would breach that licence should their activities be considered electricity distribution. Similarly, electricity generating businesses, such as independent power plants, need generation and supply licences from the government, and an arrangement to sell to the JPS, in order to be compliant with the existing legislation that is even now being reviewed by a joint select committee of parliament.
Generating and supplying electrical power to EVs is a critical component in moving the concepts of widescale EV ownership, and solar-powered EVs, from ambition to reality. And therein lies room for differences of interpretation that have fuelled the debate between the electricity regulator, the Office of the Utilities Regulation, OUR, and Evergo’s boss, Wayne McKenzie, long before any talk of powering vehicles with energy from the sun.
“In light of the definition of supply under the Electricity Act, there is the likelihood that options for charging EVs will be restricted to the current electricity provider in Jamaica who holds an exclusive licence to, inter alia, supply electricity. In this regard, it may be necessary to amend the Electricity Act to expressly exclude the activities of an EV charging station from being considered as a supply of electricity,” OUR Public Affairs Specialist Elizabeth Bennett Marsh said in an emailed response this week to queries from the Financial Gleaner.
Import duty reduction
The debate among EV stakeholders has again come centre stage, following the finance minister’s recent budget presentation, in which he also announced a reduction in the import duties on EVs, from 30 per cent to 10 per cent, for five years, among other plans, as a way to gin up interest in EVs, which can be pricey.
The Government of Jamaica expects that within a decade, EVs will eventually grow to 12 per cent of the vehicles on the nation’s roads. In the interim, the finance minister is mulling over and promoting the concept of solar-powered charging stations, which would be complementary to the country’s plans around energy security, especially amid renewed turbulence in the fossil fuel market.
“Eventually, in a decade, motor vehicles in Jamaica need to be 100 per cent electrically powered, with energy from the sunshine. This would rid us from the kind of oil price vulnerability that we have today and consumers would enjoy much more stable prices to operate their cars,” Clarke said.
As alluded to the OUR response, JPS’ all-island electric licence gives the company the exclusive right to transmit, distribute and supply electricity throughout Jamaica. It means that all persons who wish to supply electricity to third parties, including households and businesses, are required to enter into contractual arrangements with JPS to facilitate the transmission, distribution and supply of electricity.
Evergo now purchases electricity from JPS to power its charging stations. The cost to charge a plug-in or full-electric vehicle in Jamaica is said to be a third of what it takes to power a petrol-fuelled vehicle, but a switch to solar power, would drive cost to EV consumer down further, McKenzie has said.
The precise cost savings are still being tallied by the company.
“We would love to power the charging stations by solar, but we can’t because by the definition of distribution, JPS is the only one who can do it. And even though we are buying expensive power from JPS, it is still cheaper than gasolene at the pumps. But it can be cheaper if people were given the right to power their own station. So, it’s not far-fetched, but there has to be changes in the legislation for that to happen,” McKenzie told the Financial Gleaner, commenting on the government’s solar EV suggestion.
The OUR has also weighed in on the vagaries of solar power and what would be required to mitigate those factors.
“Since solar energy is variable and is not available at nights, it may be necessary to supplement the electricity from the (solar) PV system by maintaining grid tie and/or storage batteries. Legislative changes will also be required,” the regulator said.
JPS, for its part, says it fully supports electric mobility and the use of solar energy for charging electric vehicles as articulated by the finance minister but, unlike Evergo and the OUR, does not deem an amendment to the act as being necessary for the growth of the EV industry.
“The existing framework of the Electricity Act is not a deterrent to the advancement of electric mobility and charging by renewable energy,” director of communications at JPS, Winsome Callum, told the Financial Gleaner without elaborating.
The company did not detail what it sees as a reasonable step in getting to the goal of solar-powered EV charging stations by 2032.
New electricity law coming
However, Opposition Spokesman on Energy Phillip Paulwell says the solution lies in making it crystal clear in the interpretation clauses of any new legislation that distribution and supply, as they relate to JPS’ licence, does not include EV power. Contacted for a comment, he told the Financial Gleaner that distribution, as referred to in the 2015 electricity law, is specific to wired distribution.
“Installation of EV terminals would not constitute transmission and distribution,” Paulwell said, adding that any new framework should free EV operations of the need for any kind of licensing, although standards certification by Bureau of Standards Jamaica, would be important.
Meanwhile, Energy Minister Daryl Vaz is promising that a new electricity law reflecting the government’s encouragement of EV and solar-powered EV ambition, will emerge from the parliamentary committee reviewing it within the next three months.
“That will be captured in the new Electricity Act, which we are reviewing now and (it) will be reviewed from time to time. So that amendment can always be made. That’s not an issue,” Vaz told the Financial Gleaner on Thursday.
He added that the legislative review was part of the government’s long-term vision for encouraging the growth of EVs.
“We are finalising the EV policy, which will come into effect in the first quarter of the new financial year. The first order of business would be to get a constant supply of EV units. The manufacturers won’t look at a country until it has an established policy. So now that we have that policy, maybe the manufacturers will take us more seriously where supply chain is concerned,” the energy minister said.