Jamaica should rethink energy policy post-Melissa

Jamaica Gleaner | 2025-12-03 | Original Article

This is the final article in a series highlighting Youth Voices in Hurricane Melissa recovery, featuring young people’s perspectives on resilience, rebuilding and the future after the storm.

 

 

Jamaica’s future development will largely depend on its ability to provide affordable and consistent electricity. This requires a fundamental rethinking of our country’s energy policy after Hurricane Melissa.

 

Ever since the 1980s, Jamaica has adopted the view that the ideal relationship between the state and the economy should be one that is facilitative, not interventionist. The sanctity of the free market became central to this ideology, which eventually became known as neoliberalism. Under this regime, excessive state intervention is regarded as a major impediment to the operation of markets as this leads to higher prices and lower production.

 

Thus, planning no longer became the prerogative of the state. Instead, this was primarily left to the realm of the private sector as the state was relegated to enabling this actor’s operations. Even though, Jamaica adopted this approach in the 1980s, it was during the 1990s where the process was accelerated. During this time, monopolies were broken up, the economy was liberalised and crucially, state-owned enterprises and utilities were privatised.

 

Since then, the world economy has fundamentally changed especially in the past 10 years. Major western countries are no longer champions of a global free market, which has historically been characterised by the free flow of goods, services, finance and people. Today, popular narratives on the need for ‘less state’ are increasingly being questioned as in many countries the state’s role has expanded significantly. Ironically, economies like the United Kingdom, the European Union and even the United States have been increasingly deploying more state interventions in their economies.

 

For example, last month, the Dutch government took control of a major semiconductor company in a bid to boost supply chain resilience. While in June this year, the British government took immediate action to prevent the closure of its last steel plant. Now under state control, over 2,000 jobs have been protected, and the country maintains a critical supply of steel. These winds of change mark a major departure from traditional economic orthodoxy.

 

Perhaps, this is a sign that developing countries, like Jamaica, should follow suit in rethinking the role of the state in the economy.

 

What makes this call more urgent is the unparalleled destruction caused by the passage of Hurricane Melissa. Analysts estimate the economic cost of this disaster to be around a sobering 44 per cent of GDP. Building back stronger will, undoubtedly, require the economy to fire on all cylinders. But this requires the swift restoration of infrastructure, including the electricity grid which saw over 75 per cent of customers cut-off after the hurricane.

 

Indeed, energy is a weak point in Jamaica’s overall economy. Not only is the country’s grid vulnerable to extreme weather, but our electricity prices are among the highest in the world. These issues have been further exacerbated by the challenge of energy insecurity. With our reliance on often expensive imported fuels and our lack of energy resources, it can be argued that Jamaica has long been energy poor. In other words, the country is very constrained in its capacity to produce electricity.

 

This has serious economic consequences. Imported energy creates national security risks from an over-reliance on global markets. It also means that our foreign exchange reserves are always at risk due to fluctuations in the price of oil. Moreover, energy is the lifeblood of the economy as it is needed in all industries. In fact, Swedish academic Hans Rosling notes that there is a strong correlation between economic development and access to energy.

 

Advancements in technology has ushered in a world where the resources for electricity production no longer needs to be dug out of the ground. We now have a variety of methods for producing energy. Solar, wind, hydrogen and tidal power all show great possibilities. However, none of these will achieve their promise without state investment.

 

As such, one option is that the g government can create more incentives for investments in renewable energy through the Development Bank of Jamaica. Although, this should not come in the form of corporate handouts and subsidies but low-interest loans and capital for equity deals. This must happen at scale and if we are to create the flow of both public and private capital necessary to make a real change. With a mix of investments for solar and wind energy, there can be a real shift in rapid fashion.

 

Solar is already reshaping the global energy market as capacity continues to soar each year. This boom can be seen in regions like Texas and California as well as in countries such as China and Hungary. In the case of California, the state powers itself through a combination of solar production and battery capacity. These developments have been driven by generous tax credits to both households and businesses.

 

This push to expand solar energy production has also extended to developing countries. For example, last year, Sierra Leone installed new solar generation capacity which was equivalent to all the energy produced in the country for 2023. While during the 2010s, Uruguay, a country only slightly larger than Jamaica in terms of population, transitioned in less than a decade to producing 98 percent of its electricity through renewable energy. This transition was only possible through a national investment plan for expanding energy production across a number of renewable energy sectors.

 

Hydrogen, though still in its early development, offers promising potential. Green hydrogen is of interest as it poses an opportunity to make certain industries carbon neutral. Already we see Trinidad and Tobago making major moves to invest in hydrogen plants. Thus, we have a clear partner within the region to work with.

 

Given Jamaica’s natural resources sun and wind, with proper investment in battery infrastructure and the right industries we could rid ourselves of energy poverty. Therefore, after the devastation caused by Hurricane Melissa, a return to the status quo is not an option.

 

Energy security is critical to the long-term sustainable development of Jamaica. This will require a rapid increase in the supply of energy which necessitates reassessing the role of the state. Precedent across the world underscores the importance of strategic planning to facilitate a fast and sustained energy revolution. With the right investments, an energy-rich Jamaica may finally be within reach.

 

Jafaz Ally is a student at the University of Cambridge. He is currently pursuing a Bachelor of Arts in History and Politics.

 

David Wiltshire is a student at the University of the West Indies, Mona. He is currently pursuing a Bachelor of Laws.

 

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