ARE WE CONDEMNING GUYANA TO AN EMPTY RICE POT?

Sep 17, 2016 News

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THE VOICE OF THE LIBERAL DEMOCRATS…

By: Sase Singh

Introduction

Every time I pick up my pen, it is because I feel a sense of commitment to a certain social group – the

poor and the working class. It is what drives me ideologically. As I pick my pen up today I recognize again that the path to the quickest economic upliftment of the poor and the working class is cheap and reliable energy. Yet the Granger administration has done very little on this front either because it is impotent to act or that the deal to keep the current model of gas-guzzling generators at GPL is paying off for the closed group that is controlling decisions in the public sector today.
The International Energy Agency estimated that total onshore wind farm capacity will reach 546 GW by 2020 with a further 175 GW offshore. By 2020, wind energy will support 7.3% of the global energy needs up from 1.6% in 2011.
Although Guyana boasts more wind capacity than many other countries in the Caribbean, we continue to lag behind. Jamaica is already ahead of the curve, walking away from the US-Caribbean Energy Summit held in 2015 with US$90 million in capital injection, to build a 34 MW wind farm that turned on its power switches in August 2016.
Up comes billionaire Sir Richard Branson, who then immediately bought out the entire project in Jamaica at a premium cost.
Do you know what it is to have Sir Richard touching down in your country every so often to check out his investments and catching a game of golf at the same time? It is called billion-dollar access.
Jamaican entrepreneurs now have access in positioning bankable ideas in front of Sir Richard. Some will convert to new projects, new wealth, and new jobs. This did not happen by magic, it took careful planning and skillfully packaging and marketing of the investable opportunities offered by Jamaica by their authorities. Kudos to them!
Did a Goat bite Guyana?
In his inaugural address to the Parliament as Head of State, President David Granger said, “Your Government will introduce an energy policy that utilizes our wind, water, and solar power to provide cheap, renewable electricity to more Guyanese in our urban, rural, riverain and hinterland communities.”
My reaction? Time’s awasting; 15 months gone and very little has been accomplished by your Minister on the green energy front, Mr. President.
Guyana has a bankable project ripe for implementation called the Hope Beach Wind Farm, but it is on ice in the Minister’s office. It was Minister Patterson who said he was “close to clinging a deal” in October 2015, in reference to this project. But that was almost a year ago. It is clear that the good Minister has no respect for time.
Guyanese continue to overpay for unreliable electricity supply and there seems to be no respite in their misery. Can you imagine the fact that Guyana has a private sector deal that is fully funded and all that is needed to progress this deal toward implementation is a Power Purchase Agreement (PPA) from GPL?
A decade from now, the Guyana Wind Farm Inc. saga may be remembered as the labor pain that helped birth a new industry or will it be remembered as the project that never got incubate because of the gross inefficiency of the decision-making process in the Minister’s office. What better can the Granger administration ask for?
The private investor is bearing all the risks, the private investor will put up all the money needed for this investment, the private investor will build the plant and the private investor will deliver a turnkey project. GPL only has to commit to paying for what is delivered from the wind farm into the national grid by way of this PPA. What is really going on in GT?
The icing on this deal is that Lloyd Singh, in his submission to the EPA, committed to selling power to GPL at a cost of 10.5 US cents, which is a discount of more than 50% on the cost of the present gas-guzzling operations at GPL today. But yet this deal is on ice in the Minister’s office. Talk about gross incompetence; squared.
These are the kind of deals that President Granger should have personally put his hand on and ask for independent advice to conducting the forensic interrogation as to why this deal has not been done to date.
If Minister Patterson fails to deliver for Guyana, the responsibility for this underperformance will land solely on the President’s desk since all Ministers are creatures of the Presidency. A Minister failure to act means the President is failing to act.
The Investors are ready; is Guyana ready?
Investors are getting on board across the world on this renewable energy front in increasing numbers. Search engine giant Google announced plans to be part of a deal to finance a $5 billion, 350-mile underwater transmission line to support multiple wind farms in four mid-Atlantic states, from New Jersey to Virginia. Turbine manufacturers are doing their part to scale the fledgling sector, targeting bigger designs and deeper installations. And that is just in the USA. The rest of the world has been on this renewable energy highway for years now.
But no investor is going to wait on some Minister, in a country that is just a dot on the world map when it comes to global influence, to streamline their portfolio of new investable projects. If the Minister fails to get his act together on this wind farm, we must not be surprised when the investor moves his idea to Suriname or Barbados in the near future. Serious businessmen like to work with serious decision makers; not “lompey-pompey” ones.
What will a wind farm do for Guyana?
Building a wind farm in Guyana will translate into actual industrial growth. Our path out of poverty is industrialization but it will never happen without cheap and reliable power. Further, this cheap and reliable power supply can help to spur technology improvements and new jobs.
This Hope Wind Farm project can also stimulate the private-public financing of an industrial site at Hope Village, which can galvanize investments into projects that we are great at, such as low-cost plantain chips and banana chips that are cooked, hygienically packaged and exported to the Caribbean market.
Package coconut water, with peeled, chopped, washed and packaged fresh vegetables are all for export. And this is just the tip of the iceberg because a light manufacturing industry can take off behind these agro-processing projects. But none of this will happen on a grand scale until and unless the Granger administration gets its act together.
Conclusion
Our electricity market reform has to be made technology neutral. Given the huge amount of investment that we need in low carbon electricity it would be unwise to restrict oneself to only one type of renewable technology. So while we progress the wind, we have to focus on the others especially hydro, alongside a huge push for energy efficiency.
Therefore, we must use the momentum from this Wind Farm to stimulate the market interest in Amaila Falls again by making sure major international players are made aware of our ambitions with a road show to the main capitals of the world.
Together, investments in all these technologies will bring hundreds of new green jobs, drive our average energy price down and provide the kind of long-term energy security that Guyana can leverage. Can we do it? YES, WE CAN! So why not? BEAT ME, ask Minister David Patterson! Please share your feedback atsasesin1@yahoo.com .

Sase Singh, M.Sc. – Finance, ACCA

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