Meeting future demands

Apr 22, 2016 Editorial, Features / Columnists

In Guyana, the supply of electricity is dominated by Guyana Power and Light (GPL), the state-owned vertically integrated utility. Although the country has significant potential for hydropower, and wind-generated power, most of its electricity is generated by inefficient thermoelectric diesel-engine driven generators.
As a result, reliability and efficiency are very low, due to technical and institutional deficiencies, with total losses said to be close to 40%. This low reliability has led several medium and large companies to self-generate.
Self-generation of electricity is not necessarily widespread in Guyana; it is done by mostly private companies. But the self-supply in the corporate sector has helped to ease the demands on the GPL, especially in the urban centres of the country. And GPL must be congratulated for reducing the electricity rates for its customers who are its ultimate stakeholders.
In a careful review of the rates of electricity by its Board of Directors, GPL, on April 1, 2016 announced a 10 percent net reduction on electrical bills for its consumers due to lower prices for oil on the world market. While lowering the rates, GPL is also actively engaged in addressing some of its major problems, primarily power outages. It was a great relief to the consumers, many of whom believed that the tariffs should have been reduced even further.
But GPL is constrained by its high level of operating costs, technical and commercial losses in the transmission and distribution of electricity due to old infrastructure and the continued theft of electricity through meter tampering and other means. In 2014, GPL lost a total amount of 32.7 percent of its dispatched power and in 2015, it lost 29.8 percent. Its goal is to reduce its total losses to 15.4% by the year 2020 and to less than 10 percent by 2025.
Over the years, the consumption of electricity in Guyana has increased substantially due largely to the construction of several new housing schemes, however its generation and distribution capacity has increased at a relatively slower pace. Obviously, self-generation has played an important role to fill the gap between consumption and generation of electricity. Also the low income in the country, high cost per kilowatt hour and the lack of low electrification in the rural areas have led to the usage of kerosene, wood and charcoal cooking, thus reducing electricity demand in those regions.
Access to electricity is usually constrained by the country’s level of income, however this indicator appears lower than in other Caribbean countries. It is estimated that the electricity system in Guyana services only about 60 percent of the population, well below the level achieved by many countries in the region. However, electrification is higher in the urban areas with a high industrial concentration compared to rural parts.
Electricity rates in Guyana are among the highest in the hemisphere due to the country’s reliance on expensive imported oil. Reduction of the country’s reliance on imported oil and the improvement of energy efficiency will require huge investments in hydropower, wind, biomass and bagasse that will impact on the fiscal stability of the country.
The World Bank estimates that an increase in electricity in Guyana at a level comparable with peer Caribbean countries would require investments over the next ten years of between US$805 million and US$1,497 million.
Guyana has an estimated capacity of 7,600 MW of hydropower, which is more than 30 times the current capacity in the country, but this potential remains untapped due to the considerable capital investments required to finance it.
GPL deserves kudos for its recent actions, but it must end the blackouts; upgrade more rapidly and expand its power grids to meet future demands.

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Meeting future demands

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