MOCA – The Ministry of Education’s energy policy needs to be investigated

Grace McLean is applauding… an ominous sign

On 16 Dec 2021 I submitted my worries to the Major Organised Crime and Anti-corruption Agency, MOCA about the $136m solar installation at the head office of the ministry of education. The payback period for a solar investment is around 4 years but this installation is around 15 years. The beauty of solar is that a facility needs very little maintenance or management but quoting the minister of education: “We are financing a five-year service and maintenance contract to ensure the preservation of the equipment.”

Here is the transcript of the document.

The Ministry of Education’s energy policy needs to be investigated

In 2019 the head office of the MoE announced savings around $9m per annum from a $136m solar installation. This must be investigated. You will see below that in Jamaica the payback period for a solar investment – the time taken to break even – is around 4 years so a saving of $9m is the expected return from a $36m investment (4×$9m). But this system cost $136m, a payback period of 15 years ($136m÷9m). They also reported that the system will save 34%, so the annual bill is around $27m ($9m÷34%) hence a system costing around $108m (4×$27m) should take them completely off the grid.

The government is using such misinformation plus Jamaica’s alleged indebtedness to implement a policy of foreign investment in solar powered schools and this dereliction of duty must also be investigated.

The viability of solar

In 2014 the MoE explored the possibility of solar in schools, quote “The immediate costs would have been phenomenal but the long term gains would have been worth it. The issue at the time was service capacity.” That statement by the deputy chief officer of the MoE is indicative of their incompetence. In that year Holy Trinity High School was partially solar powered by charitable donations and reported an estimated payback period under a year. And taking schools off the grid should have been a priority back then because numerous disconnections due to unpaid bills were reported.

Evidence of the viability of solar:

• 2012: The then minister of energy Paulwell announced that he is off the grid and expected his solar investment to pay for itself in only 5 years. Why didn’t he advise the same for state infrastructure?
• 2014: Paulwell attended the unveiling of the US$3.4m solar investment at the Grand Palladium hotel that was expected to pay for itself in only 4 years. Paulwell said quote, “Based on current trajectory, solar will become the cheapest energy source by 2030 if we continue to benefit from economies of scale.” He needs to explain himself.
• 2014: Holy Trinity’s bills were around $1m but fell to quote, “…$500-$600 and odd (thousand) per month”. So saving over $300k from a system that cost $3m. This was reported to parliament by the local MP Rev Thwaites, the then minister of education.
• 2015: I have a US$475k quote to remove Montego Bay Community College off the grid. Their bills for Sep and Oct were $1,245,959 & $1,295,774 respectively (average US$10,900 monthly so around US$120k per annum). A payback period of 4 years.
• 2017: Ardenne High was partially solar powered. They reported $4m monthly bills (US$32k!) and estimated that a US$320k investment would eliminate JPS bills i.e. payback under a year. In 2019 they reported that JPS bills almost hit $5m (US$38k!!!! The school needs to be audited.)

A policy to solar power all educational institutions should have been initiated when Paulwell came off the grid in 2012. If this had been done, the investments would have paid for themselves already and schools on vast pieces of land, such as Clarendon and Cornwall colleges, would be generating significant revenues by selling back to the grid. A school in the US generated over US$2m in 3 years (video).

Keeping state infrastructure on the grid diverts funding from education to JPS hence schools are broke, must charge fees – a violation of human rights – and created what Bunting and Golding referred to as educational apartheid.

According to the MoE, last financial year $696m (US$4.7m) was allocated to paying school JPS bills so based on that number US$20m should take them all off the grid. It can be funded:

• Postpone spending US$50m on a parliament building.
• Access the almost US$4b in the reserves. The IMF target for the NIR is US$3.56b by Mar 2022 so there is over US$400m available.
• Schools could receive loans as in section 15(2) of the Education Act to invest in solar. The DBJ has loaned foreign BPO investors almost US$114m so the same courtesy could be afforded schools.

There are options to foreign investment. It is obviously better for the people to own the facilities so money remains within education to buy tablets, install Wi-Fi etc. and it can be easily financed. However, the government has started to use foreign investors and is using the “lack of fiscal space” excuse to say we cannot afford it. The ministry of finance is failing the people.

Private sector investment and the Energy Service Company (ESCO) Model

The three paragraphs below are from the Development Bank of Jamaica website:

The National Education Trust (NET) will be seeking to identify private sector provider(s) to undertake the financing, installation and maintenance of photovoltaic generation systems in a pilot project of 30 select secondary schools. It is envisaged that the project will be implemented under an Energy Service Company (ESCO) model with payment to the private sector being made from savings.

Project Description: Reduce the energy cost to the schools by 40-70% and, ultimately, to reduce the fiscal burden of the Government of Jamaica.

Status: The National Education Trust finalised the Energy Saving Performance Contract (ESPC) and same to be executed by the preferred bidder.

The foreign consultancy Castalia was paid US$270k ($40m) to find the preferred bidder ($60m was allocated to this unnecessary task). On the Castalia website the so called “problem” was described: “Jamaica had an opportunity to cut energy costs in schools by installing rooftop solar photovoltaic systems to generate electricity on site and installing more energy efficient equipment. However, neither the schools nor the government department responsible had the funds or expertise needed.” What an embarrassing waste of the people’s $60m.

$40m could take a number of primary schools off the grid

It is not only economic lunacy to ignore a payback of 4 years, it is immoral. Under the ESCO model, investors will own the facilities and the people will still be paying to power schools. So money that is needed for education will be going to investors, and schools will remain broke and dependent on charity and fees.
We need to see the details of the contract.

Further investigations needed

In 2014 the principal of Hampton School alluded to the larger high schools having monthly electricity bills around $1m (US$9k) i.e. approximately US$100k per annum. It appears to be a reasonable assertion, Excelsior’s bills for June and July 2014 were $1,278,965 (US$11,400) & $921,335 (US$8,200) respectively so around US$115k per annum. These bills appear excessive. Are some schools somehow consuming more electricity than needed? We need answers.

An Excelsior bill. The other meter had a bill for $212,270.