UNDP & PCJ pilot innovative Energy Sector Company (ESCO) model to reduce energy costs in public hospitals

Nov 30, 2016

Mr Bruno Pouezat, UNDP Resident Representative shares pleasantries with Minister of Science, Energy and Technology, the Honorable Andrew Wheatley at Launch event

[UNDP, 5 December, 2016]: A US$12 million renewable energy and energy efficiency project designed to reduce energy costs in six public hospitals through an innovative financing model has been launched by the United Nations Development Programme (UNDP) and the Petroleum Corporation of Jamaica (PCJ).

The three year Deployment of Renewable Energy and Improvement of Energy Efficiency in the Public Sector Project was officially launched at a ceremonial event on 30 November. In attendance were Minister of Science, Energy and Technology, the Honorable Andrew Wheatley, UNDP Resident Representative, Mr. Bruno Pouezat and Dr. Peter Ruddock, PCJ’s Manager of Renewable Energy and Energy Efficiency Department representing PCJ’s Group General Manager, Winston Watson. Funding for the project comes from the Global Environment Facility (GEF 5) and the PCJ with contributions from the UNDP and the Development Bank of Jamaica. The project will be implemented by UNDP Jamaica and the PCJ.

UNDP Resident Representative Mr. Bruno Pouezat noted that the project will significantly pilot an Energy Service Contracting Company (ESCO) using the Energy Performance Contracting (EPC) model in the local health sector. Using this approach, six hospitals will not have to find the startup costs to fund turnkey renewable energy and energy-efficiency systems under the project. The investments will be made upfront by the ESCO, in this case the PCJ, which will recover their investments through earnings gained from savings on energy.

This business model for energy upgrades is being piloted in the public sector with the intention that lessons learned will perfect a model approach to making renewable energy and energy-efficiency systems widely accessible and affordable to homes and offices that may not be able to afford the initial cost of financing these solutions.

PCJ will do assessments to determine possible investments in turnkey renewable energy and energy-efficiency systems and retrofits to May Pen Hospital in Clarendon, Black River Hospital in St Elizabeth, Savanna La Mar Hospital in Westmoreland, Bellevue Hospital in St Andrew, Sir John Golding Rehabilitation Centre in St Andrew, and the National Chest Hospital in St Andrew.

Mr. Pouezat noted that the EPC model has become a widespread solution to public sector financing globally and has become a significant provider of Energy Efficiency upgrades in the United States public sector. ESCOs which use the EPC model have proven useful in spurring growth in the renewables sector while addressing the initial investment costs for many potential customers including governments worldwide. “ESCOs can help public entities overcome local governments’ lack of time and expertise to identify and implement appropriate building upgrades,” Mr. Pouezat noted.  

He said the three year project would help Jamaica’s energy sector contribute to the achievement of the country’s energy targets (what of Vision 2030?) as well as to Sustainable Development Goal number seven which calls for “secure universal access to affordable, reliable and modern energy services; to increase substantially the share of renewable energy in the global energy mix; and to double the global rate of improvement in energy efficiency”.

He expressed the view that Jamaica’s energy targets which have been upgraded to 30 per cent of Jamaica’s overall energy supply from renewable sources by 2030, are achievable and critical to Jamaica’s human development aspirations. Mr. Pouezat reiterated UNDP’s continued commitment to supporting the Government and people of Jamaica in achieving these goals. Now is the time to advance Jamaica’s energy plans.

The PCJ’s Group General Manager, Winston Watson in his message read by Dr. Ruddock said, “We consider this a worthwhile investment for the Government and People of Jamaica as it will improve conditions in the health sector while reducing electricity costs which will mean savings for the public sector and we are therefore looking forward to a successful partnership with the UNDP,”

“We are pleased to partner with the UNDP on this project since the objective of incorporating more energy efficiency solutions into the public sector’s operations aligns perfectly with our mandate to reduce the Government’s energy bills,” Mr. Watson said.

The project has three components which will focus on institutional capacity strengthening through support for national energy training standards and certifications; regulatory development through support for energy and related legislation; and, as mentioned, economic and fiscal instruments through the promotion of Energy Service Company (ESCO) industry and an energy performance contracting model for the implementation of solar power systems and energy efficient retrofits.  There will also be wind demonstration projects at two rural schools. 

Contact information

Gillian Scott, UNDP/UN Communications Analyst

Tel: 978 2390 – 9 Ext 2032

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