For the Pepper Essence
For pepper essence, bring all ingredients up to a boil in a large pot. Reduce heat, cover and simmer for 15 minutes, until peppers are soft.
Remove from heat and let stand, covered for 15 minutes.
For the Jelly
Strain pepper essence through a fine strainer or through a colander lined with a cheesecloth into a large bowl (watch for pepper fumes when you lift the lid.)
Then strain essence through a strainer lined with a coffee filter, to make essence as clear as possible. Chill essence for a few hours to let any remaining sediment settle in the bottom of the bowl.
Ladle essence from bowl, taking care not to stir sediment from bowl, and strain one last time through a coffee filter. Measure 2 cups of juice into a large pot.
Heat juice until warm and stir in sugar. Bring liquid to a full boil and stir constantly for 1 minute. Stir in pectin and return to a boil, stirring for 1 minute. Stir in food colouring, if using.
Remove pot from heat and remove any foam from surface with a spoon. Jar jelly following proper canning procedures, leaving 1/4-inch space from top of jar.