Norway team shoots down Amaila Falls hydro project

Dec 29, 2016 News

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…finds it too costly, burdensome – Govt.

– says design flaws threatened long-term effectiveness

A review of the planned US$900M-plus Amaila Falls hydro power is out, with the Coalition Government yesterday insisting that the findings had justified its stance that the initiative in the current form was not in the best interest of Guyana.

The Norwegian Agency for Development Cooperation (NORAD), in support of the Norway’s Ministry of Climate and Environment’s International Climate and Forest Initiative (NICFI), had signed an agreement with Norconsult AS of Norway, on June 20th, 2016 to carry out an initial analysis.

It will be recalled that in August 2013, the preparations for implementation of Amaila Falls Hydropower Project came to a standstill, as the Parliament of Guyana did not vote unanimously in favour of certain features of the project presented by its main sponsor, Sithe Global, a US-based investor in the international energy market.

At that time, the National Assembly was controlled by a one-seat Opposition majority of A Partnership For National Unity and the Alliance for Change (APNU/AFC).

Sithe Global withdrew from its position as main sponsor throwing the project’s future into jeopardy.

The Government of Guyana, represented by the Minister of Finance and the Minister of Natural Resources and the Government of Norway, represented by the Minister of Climate and Environment decided at a meeting in Paris in December 2015 to perform “an objective and facts-based” assessment of the Amaila Falls Hydropower Project.

The project was heavily pushed by the last two administrations of the People’s Progressive Party/Civic (PPP/C) but ran into trouble early, specifically problems with the access roads to the Amaila Falls dam site in Region Eight. The roads collapsed in many parts and the contractor was fired. Costs ran from US$15M to US$40M.

The US$900M-plus tagged for the 165 megawatts project was seen as too costly, with criticisms over the technical readiness of the Guyana Power and Light Inc. to take the power. There were also questions over whether the dam would actually be able to sustain the promised power, with one photo even showing the waterways dry.

INDISPUTABLE EVIDENCE

Yesterday, the Ministry of the Presidency made it clear that the review of the project was of utmost importance, as it provides indisputable evidence to support the position taken, while the current administration was in opposition – that the hydro-power project in its current configuration does not meet minimum requirements to ensure its viability and longevity.

“It is the view of the Government that the Norconsult Report has given credence to its position on the need for an energy mix to increase the country’s share of renewable energy by close to 100 percent by the year 2025. The report also provides supporting evidence that the Amaila Falls Hydropower Project would not be optimal in its current model and presents an unbalanced risk to the Government and People of Guyana,” the statement from the ministry said.

Though the project is just one of several renewable energy options being looked at by Guyana, Government said it believes that the report identifies several risks and flaws in the design of the project, which will threaten its long-term effectiveness and prove too costly and burdensome to the people of Guyana, and the country as a small developing state.

INCREASED COSTS

“Rectifying the many issues identified will increase the total cost of the project substantially, thereby impacting the tariff rates from the outset. Additionally, there are at least six more years of work to be completed, including a minimum three years of water flow study and analysis on the project.”

Signaling its clear intentions not to bank heavily on the Amaila Falls project, the ministry said that Government has studied the report and, being “conscious” of the specific needs of the country, the Government of Guyana proposes to utilise a mix of energy options, starting with less risky options such as solar and wind, as outlined in Budget 2017.

Provisions have been made for expansion of the scope of clean, alternative energy in the country, resulting in more reliable electricity supply.
These include the establishment of programmes to promote energy efficiency at a household level for financial savings to householders; budgetary allocations of almost $1B dollars for renewable energy and energy efficiency projects; the installation of solar photovoltaic (PV) systems on the rooftops of 64 Government buildings; the installation of a large scale solar farm in Mabaruma with smaller solar farms in Lethem, Mahdia and Bartica. This in addition to a one-off tax holiday concession of two years for corporation tax to the business community for the importation of items related to wind and solar energy investments, water treatment, waste disposal and recycling facilities, and the replacement of inefficient lights with their energy efficient counterparts.

Meanwhile, the Ministry of the Presidency also said that a long-term energy plan for the transition to the increased use of renewable energy is expected to be presented to Cabinet by mid-January. Minister of Public Infrastructure, David Patterson, yesterday said in the statement that “final touches are being made to the draft document” and once Cabinet has had their input, it will be released to the wider public.

He also noted that the Government is committed to exploring all avenues for the development of renewable energy in keeping with its ‘green’ development agenda.

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