Jamaica plans region’s largest renewable energy tender

Jamaica plans to launch the largest renewable energy and battery storage tender ever as it seeks 220 megawatts of new clean power paired with 110 megawatts of battery storage.

It will glide the island towards the target of generating half of the island’s electricity from renewable sources, led by solar and wind.

“The Government of Jamaica, through its Generation Procurement Entity (GPE), is launching the largest renewable energy plus baseline storage procurement in the English-speaking Caribbean region,” according to the GPE, the state body that manages Jamaica’s energy transition.

The next step involves the “launch of a Request for Information on March 19”, according to the GPE, which involves inviting feedback from developers, investors and lenders ahead of the formal tender. A webinar is set for next week, the Financial Gleaner understands.

“This request for information is open to investors, prospective bidders, lenders and any other relevant stakeholders,” the GPE stated, adding that taking part is not a requirement for submitting a bid once the formal tender is launched.

Stakeholders have until April 10 to submit feedback through the RFI. The GPE expects to formally launch the auction in the third quarter of 2026.

The request is the opening move in what the GPE calls the second tranche of Jamaica’s renewable energy auction programme. It comes roughly three years after a 2023 round that drew bids far exceeding its 100-megawatt target, and as the island races to reach a goal of generating half its electricity from clean sources by 2030. It would rid the island’s heavy reliance on imported diesel and natural gas that has long made Jamaican electricity among the most expensive in the region.

The move gains added importance as world oil prices surge following US-Israel military strikes on Iran. Jamaica has felt such shocks before: Crude oil imports spiked to US$728.2 million in 2022 after Russia’s invasion of Ukraine, before easing to US$486.4 million in 2023 and US$511.6 million in 2024, according to the Economic and Social Survey Jamaica, published by the Planning Institute of Jamaica.

What the new tender offers

The second round is technology-neutral, meaning developers may bid solar, wind or a combination, provided they pair the project with a battery system sized at 110 MW with a two-hour discharge capacity. The battery requirement — using lithium iron phosphate chemistry — is meant to provide firm, reliable power and cut the island’s reliance on oil-fired peaking plants.

Winning developers will sign a 20-year power purchase agreement and build, own and operate their projects. Pricing will be split between a capacity payment and an energy payment—a structure designed to make deals easier to finance. The framework is governed by Jamaica’s Electricity Act, 2015.

A strong first round

The 2023 auction sets a high bar with the 100-megawatt target, with all 12 final bids proposing solar power. “The round was oversubscribed fivefold,” according to GPE in its statement.

The average price came in at US$61.58 per megawatt-hour, some “14 per cent below” the regional average for comparable Caribbean solar projects.

Over the 20-year life of the first-round contracts, the Government projects net savings of roughly US$415 million, compared with fossil-fuel generation, including US$298 million from reduced fuel imports. The projects are also expected to cut cumulative carbon emissions by 3.6 million tonnes.

Comparatively, Jamaica imported US$511.6 million worth of crude oil in 2024, US$486.4 million in 2023, and US$728.2 million in 2022 following the disruption caused by Russia’s invasion of Ukraine.

The tender also lands at a pivotal moment for Jamaica’s electricity sector. The Government has decided not to renew Jamaica Public Service Company’s all-island licence on existing terms, with negotiations for a new licence framework set to begin after April 26 and a new licence targeted for July 2027.

Source: The Gleaner, Jamaica