Energy Conference hears… Wind, Solar & Hydro cheaper to use than Gas

Feb 20, 2022 News

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…as Govt. persists with US$1.4B ‘white elephant’ for little/no returns, if not changed

By Gary Eleazar

Kaieteur News – Guyana this past week played host to its first ever International Energy Conference and Expo at the Marriott Hotel in Kingston, Georgetown, where the topic of utilising the country’s gas reserves, instead of flaring or re-injecting it into the reservoir was again up for discussion.

With bids Expressions of Interest (EOI) in already—currently being vetted by the administration—there still remains a sharp divide over the country’s chosen pathway in light of still to be addressed cost and environmental concerns.
During the course of the activity, the more than 500 delegates present in Guyana for the international affair, Prime Minister with responsibility for the country’s Energy Portfolio, Brigadier (rt’d) Mark Phillips, espoused, “our Government is currently embarking on its commitment to achieving a low carbon economy and advancing the transition away from conventional energy sources.”

He elucidated saying, Guyana’s Low Carbon Development Strategy (LCDS) 2030 is geared towards a massive expansion of renewable and clean energy across the country and to this end Government is pursuing a strategy of developing low carbon energy resources like Solar, Hydro, Wind, Natural Gas, and Biomass, to meet the rapidly rising energy demand while keeping greenhouse gas emissions low.He said under this strategy, we will advance an energy mix that will lead to more than 500 megawatts (MW) of newly installed capacity over the next five years and among the projects to be implemented as part of the energy transition is the highly anticipated Gas-to-Energy Project.
The bulk of that base-load to be supplied to the national grid, according to government speakers over the course of the event, would be coming from the Gas initiative—either 250MW or 300MW depending on who you listen to.

ENERGY SECURITY
Prime Minister Phillips in his pitch to ‘investors’ industry stakeholders, delegates and those in attendance, contended that gas initiative would provide 300 megawatts of power to the national grid and it is expected to result in substantial cost savings for power generation while reducing electricity costs to consumers by at least 50 percent.

He suggested too that the 165 megawatts Amaila falls hydropower project “will be advanced to further enhance our nation’s energy security.”
Guyana’s energy transition, using gas as a bridge from Heavy Fuel Oil (HFO) to 100 percent renewable would be approached in three phases, according to Prime Minister Phillips.
In his outline, he said, by 2027, government intends to realise electricity generation in Guyana through a combination of natural gas, hydro and “a significant expansion of solar power, with batteries on the rural networks.”
He said that from 2027 to 2032, there would be the continued replacement of HFO, along with the “expansion of wind and solar and the possible commissioning of Guyana’s second hydropower project.”
Stage three, according to Prime Minister Phillips, from 2032 onwards, will “be determined by prevailing market conditions, but it is likely that battery and hydrogen technology will be sufficiently advanced to enable solar and wind to provide new capacity increases while contributing to the possible further reduction in electricity costs.”
He was confident that with adequate and timely technical and financial support, we will develop our indigenous energy resources while addressing energy security concerns, advancing climate change mitigation efforts, and promoting sustainable energy solutions.
With government forging full speed ahead with the project, it is still being met with relentless criticism about its viability.

WHITE ELEPHANT
Opposition Member of Parliament (MP), David Patterson, who holds the Shadow portfolio for the Oil and Gas sector, in a public missive following the close of the conference on Friday lamented that “the Wales Gas- to-Shore project will end up like previous PPP mega projects – a white elephant funded by the hard-working people of Guyana with little or no return, if changes are not made soon.”
He was adamant, that adumbrations by the administration that “the natural gas to be piped to shore would kick start Guyana’s industrial revolution” is nothing but myths that were constantly peddled in the public and even repeated by Government.

Taking aim at the “ever-accommodating private sector,” Patterson said the administration’s promises of utopia to be had with the realisation of the gas project was swallowed “hook line and sinker and took to the airwaves promoting the project by referencing how much money will be saved since we are soon producing our own fertilisers and cement.”
Outlining an even more glaring observation, Patterson said “it appears the government is very comfortable lying to its own citizens as well as the Parliament but draws a line when addressing a group of foreigners attending a high-priced conference.”
This position, he qualified, by drawing reference to startling revelations made by Winston Brassington whose official portfolio placed him under the employ of the Ministry of Natural Resources but for all intents and purposes, is perceived as the project head.
Patterson drew reference to the fact that despite the utterances of those in the Private Sector and government circles, Brassington’s presentation did shed “some light on the proposed Wales gas-to-shore project. His presentation confirms what the opposition and the general public have been saying for the last 18 months – which is; the current gas availability is limited to production of electricity only.”
The Opposition Member of Parliament in his missive juxtaposed the most recent revelations of Brassington with that of an earlier position voiced last year—during an official media briefing on April 26, 2021.

NO BRAINER
At the time, Patterson said “the country was regaled that this project will not only supply cheap power and LPG (Liquefied Petroleum Gas), but also fertiliser” such as Ammonia, Urea and other agro-processing byproducts and even a cement plant.
He quipped, that the selling point, in other words, was that “the natural gas to be piped to shore would kick start Guyana’s industrial revolution—a no brainer!”
With this in mind he drew reference to Brassington’s revelation that anticipated 50 million cubic feet of gas to be piped to shore “will only be sufficient to power the generating sets and a small LPG plant.”
To this end, he contends, “all the other bells and whistles used to justify this project cannot be done at this initial stage nor in the foreseeable future.”
Guyana, he reminded, “will be expending over US$1.4B and counting for primarily 250MW generating sets.
“This is an incredible amount, considering the fact that the current cost for 1MW of generating power is approximately US$1M, that’s correct 250MW of natural gas-powered generating sets can be procured for approximately US$250M – yet, the Government is paying US$1.4B.”
As such, the Opposition MP was adamant, “the public deserves to be told what the rationale is for paying US$1.15B more under the Wales Gas-to-Shore project.”
Patterson also zeroed in on the fact that Brassington confirmed that the country will be paying, and insisted that in light of all of the accommodations afforded ExxonMobil, Government should be able to leverage its position “to demand a better deal, and further, insist that the natural gas be free to Guyana.”
The development of the Natural Gas as a Bridge while being seen as a bridge also runs the risk of being counter intuitive or in fact be left as a stranded asset.
At least this was the position voiced by Dr. John Murton, a United Kingdom Special Envoy of United Nation’s Conference of Parties who in his address to the delegates while conceding the pluses—using gas as a bridge to 100 percent renewable energy—also pointed to some of the pitfalls that can devastate a nation.

SOLAR & HYDRO CHEAPER THAN GAS
He in fact suggested that across two thirds of the globe, solar and hydro power projects prove to be cheaper than gas and with technology quickly gaining traction, Government might want to reconsider just how feasible its approach is.
According to Dr. Murton, “we are increasingly seeing the end, not just of international public coal finance but of all international support for fossil fuels” and posited that this in itself frees more resources for renewable projects.
He noted that the rapid development of renewable energy, coupled with the falling price of renewable electricity has accelerated the lower emissions’ transition; “renewable power generation is already cheaper than coal in most countries. It also contributes to cleaner air and create more jobs for the future.”
According to Dr. Murton, in 2020, 82 percent of all new power generation capacity installed across the world was renewable.
Reminding that private financing is also initiating initiatives aimed at moving towards the global target of net zero emissions, Dr. Murton said “we can’t simply set a net zero target, that is decades in the future and do nothing today in order to reach net zero; we need countries to raise their ambitions now.”
He was adamant, that in order to meet the global commitments to contain global warming to 1.5 degrees centigrade, “we must build a world that is overwhelmingly fossil fuel free by 2050 and we need to be accelerating the transition to that world now, we need to decarbonise the global economy three to five times faster this decade than we have over the previous two decades.”

STRANDED ASSETS
According to Dr. Murton, in order to get there, “we need global electricity systems to be virtually net zero by 2040.”
Adamant, future prosperity lies in investing in clean energy, he pitched the case, there is economic development case for redoubling efforts and that boosting investments in renewable isn’t vital only to climate action “but it will create jobs, drive economic growth and reduce air pollution.”
To this end, he reiterated “wind and solar are now cheaper than new coal and gas power plant in two thirds of the world.”
Solar power, he said, “is the cheapest form of electricity the world has ever known and this dramatic cost reduction over the last decade—85 percent—in the case of solar power has transformed global energy options.”
Referencing Guyana specifically with its nascent oil and gas industry Dr. Murton said “a transition away from fossil fuel may feel impossible; however the truth is that long term growth is founded in investment in cleaner and greener energy.”
With this in mind, he posited Guyana has a unique opportunity to use its phenomenal growth in its gross Domestic Product to invest in green projects now and to build resilience into the energy grid, “providing a sustainable future for its people.”
The alternative, he said, is to “invest in what in the future will become stranded assets.”
Investments in renewable now, according to Dr. Murton, “will pay greater dividends in the form of greater economic and environmental security in the short term and in the longer term future.”

 

 

 

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