Economic findings in feasibility study on Amaila unreliable - Gaskin

Economic findings in feasibility study on Amaila unreliable – Gaskin

Sep 06, 2013 News

The many discrepancies unearthed since the completion of Argentina-based Mercados Energéticos Consultores’ evaluation of the Amaila Falls Hydro Electric, has rendered its economic and financial results unreliable.
This is according to former Chief Executive Officer (CEO) of the Guyana Power and Light (GPL), Ramon Gaskin, who in his analysis of the 2010 report, pointed to the fact that at the time the company operated on the basis that the hydro plant would have been 154MW instead of 165 MW. He said, too, that in the study conducted by the company, it operated on the basis that GPL would own 142MW of installed capacity as opposed to 163.9MW.

Ramon Gaskin

The company, in undertaking the feasibility study of Amaila for GPL, was also working with distribution losses by the power company of approximately 30 per cent as against total system losses of 34.3 per cent at the time.
As it relates to the demand for electricity, the company assumed that at least 60 per cent of electricity supplied by self-generators would be reverted to the national grid in the first year of Amaila becoming operational.
The study had also assumed that by the second year, the remaining 40 per cent would be back on the national grid.
Gaskin pointed out also that the report assumed that Linden would also be placed on the grid in the first year of the operations of the Amaila Hydro Plant. He said that the company had projected demand for electricity in 2011 to be 619 GigaWatt hours (GWh) and sales at 436 GWh.
According to Gaskin, the actual demand in 2011 turned out to be 653 GWh and sales 430 GWh.
At that time, too, the actual system losses stood at 32 per cent as compared to the estimate in the feasibility study of 27.4 per cent.
He also pointed out that the report had projected system losses for 2013 to be 20.8 per cent when in fact system losses in 2013 stand at around 31.2 per cent.
According to Gaskin, the reason to compare the consultants’ projections with known data is merely to show the difficulty of estimates.
“So far we have listed most of the problems encountered by Mercados in arriving at reasonable, believable economic and financial results.”
He said that in its cost–benefits analysis of Amaila, Mercados placed payments to Amaila by GPL at US$105M when the latest figure now stands at US$122M.