What’s the name of the game?

Feb 25, 2022 Features / Columnists, Peeping Tom

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Kaieteur News – When it comes to its energy projects, the government continues to sing the same tune repeatedly in the hope that it will gain traction. It is akin to constantly throwing muck at someone in the desperate hope that some of it will stick.
The government’s selling point for the gas-to-shore and Amaila Falls Hydroelectric Project is that these ventures will halve the cost of electricity. The government says that when this happens, the local manufacturing sector will be boosted.
What the government is not saying, however, is that Guyana has one of the highest costs of electricity in the world and among the highest in the Caribbean. The cost of electricity is so high in Guyana that halving it is not going to make the economy more competitive than either Trinidad and Tobago or Suriname, both of whom produce electricity at a fraction of what Guyana does. The average cost of delivered electricity in Guyana presently is approximately US$0.32 per kWh.
The average cost of electricity in Trinidad and Tobago, delivered to consumers, is US$0.05 cents per kilowatt hour and in Suriname, it is around the same. As such, both countries are able to provide relatively low electricity tariffs.
The Amaila Falls Project will produce electricity which will be sold to the GPL US$0.07 per kilowatt hour. The GPL has high distribution costs, and considering the location of the proposed hydroelectric project, the cost of transmission of the electricity generated will be extremely high. The government estimates that GPL will be able to deliver electricity at around US$0.16 per kWh. That is not a competitive cost relative to Trinidad and Suriname and makes a mockery of President Ali’s prediction that Guyana will become an industrial powerhouse.
The cost of the Amaila Falls Hydroelectric Project is now tagged at US$700M. And that project is expected to produce around 165 megawatts of power. This works out to an average cost of US$4.2M per megawatt, which is an extremely high cost.
As this newspaper reported on Wednesday, the Government of Barbados will soon be generating 178 megawatts of electricity using hydrogen and solar. And that project will cost it US$100M. On the other hand, Guyana is planning to spend seven times this amount to generate slightly less electricity.
According to reports, a similar hybrid plant is being constructed in French Guiana. As such, it makes no economic sense at all for Guyana to be building an expensive hydroelectric falls when the same energy can be produced for a lesser cost using the same hybrid system – solar and green hydrogen – as in Barbados.
Guyana is supposed to be a leader in the environment but Barbados is going to become the leader in renewable energy in the Caribbean. With this hybrid power plant, Barbados will be able to enjoy 100 percent renewable energy by 2030.
The Government of Guyana, therefore, has to examine cheaper options. The technology now exists to produce cheap solar power. And this can be done by the private investors without any investment from government. The cost of solar energy is falling. Guyana can easily secure investors, including from India, to secure the 400 MW of power it needs, and it can have this at a cost of less than US$0.05. And it is now going to cost US$700M.
It is for this reason that there have been calls for the government to put an immediate halt to its plans for its two high cost energy projects – the Amaila Falls Hydroelectric Project and the controversial gas-to-shore project.
The PNC/R is now asking for the gas pipeline aspect of the latter project to be put aside in favour of using liquefied natural gas. This suggestion should be considered, especially since one of the main criticisms of the gas-to-shore project is that there is no feasibility study in relation to other energy options.
The President has said that he is open to constructive criticism. But is he open to a transparent approach to these projects? And is he willing to engage with the Opposition and other civil society members who have expressed similar concerns as Glenn Lall and the Kaieteur News?
If the President wants to be taken seriously, he should instruct that there be a briefing to members of the National Assembly, and then to civil society, on his administration’s two main energy projects. This briefing should be exhaustive and allow for the full details to be made public and for answers to questions to be answered candidly.
What is there to lose? If there is national consensus on these projects, the government comes out looking and smelling good. If however, there are justifiable concerns, the country and the government still wins since it would have avoided projects, which could end up becoming financial behemoths.
(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

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