While world races towards renewables…Jagdeo claims solar, wind options too expensive for Guyana

Jun 20, 2022 News

By Davina Bagot

Kaieteur News – Former UN Champion of the Earth Awardee, Vice President, Bharrat Jagdeo is claiming that the generation of power in Guyana through renewable options such as solar, wind and even hydro is “very, very expensive” when compared to the highly touted Gas-to-Energy (GTE) project which will cost billions of US dollars.
Jagdeo’s comments come at a time when the world is pushing towards renewable. Only last week this newspaper reported that taking its lead from Germany, the European Union has signalled its intention to embrace renewable energy much faster than was planned, a direct result of the war being waged between Russian and Ukraine. Russia provides much of Europe with its Natural Gas. As such, the EU is now looking in the interim to make its purchases from other sources, such as Israel but even those supplies would not be adequate leading to the now stated position of accelerating its push towards renewable sources of energy such as solar, wind and hydro among other forms of new clean energy technology being developed.
To this end, the European Union, Israel and Egypt last week signed a tripartite natural gas export deal as the bloc seeks to diversify away from Russian energy. The deal, finalised at the East Mediterranean regional energy conference in Cairo, will allow “significant” exports of Israeli gas to Europe for the first time, the Israeli energy ministry said.
Wind blows intermittently
Meanwhile, during a news conference on Wednesday last, Jagdeo who was among six persons back in 2010 to receive the United Nations Environment Programme (UNEP) Champion of the Earth awards for their fight in preserving the forest and combatting climate change, said that the lowest proposal government has received to date for solar will see power being generated at US 8.8 cents per kilowatt hour (KWH), however based on his estimates, the GTE project will generate electricity at around five cents but will resell at US15 cents to make a profit.
Jagdeo explained, “for the lowest on solar, and this is without battery, 8.8 cents per kilowatt hour, without battery. So they just want to put in the panels and tie it into the grid…you can only use it during the day, you can’t use it at night because its daytime, you don’t have any storage and they want 8.8 cents per kilowatt hour.”

Vice President Bharrat Jagdeo

The Vice President argued, “I see a lot (of) talk about using solar but solar until now can’t be used as baseload and you know why, because if the sun doesn’t shine for a few days, what happens? If you are to put in a solar on its own that’s fine, we can afford that.” He was keen to note that due to the expensive cost attached to the batteries to keep the solar power alive, government simply would not be able to afford this renewable option.
According to him, “ That’s what we are gonna do, 35 megawatts of solar we are tendering for right now and we are putting in just about half an hour to one hour of storage for the transition, because if we have to put in storage capacity for 24 hours, we can’t afford it. The batteries is so expensive. Very, very expensive. So solar can’t be used as baseload, so solar is out.”
Similarly, the VP said that wind blows intermittently, which means the generation of electricity will be cut off when the wind stops. As it regards hydro, he noted that while the water flows consistently, government has been experiencing challenges with rolling out such a project as only recently the Chinese contractor, China Railway First Group, said it prefers an EPC (Engineer, Procure, Construct) plus finance option instead of the BOOT (Build, Own, Operate Transfer) arrangement it has with the administration.
Kaieteur News Publisher, Mr. Glenn Lall had asked Jagdeo about investing into renewables rather than the GTE venture as this would eliminate the risks associated with potential shortfalls, when the VP acknowledged that there are risks associated with the hydro project.
Jagdeo said, “Glenn you yourself in your newspaper, remember when we were going with Amaila and you said what if the water runs dry there too? What if the place runs dry? How you eliminate the risk? You said the hydrology risk was a major one, that this river gonna run dry, you recall that? That’s not eliminating risk.”
On the other hand, when the VP was asked though if he could assure that the GTE project would generate power at five cents per kilowatt hour, he stammered, “Yeah, well, I just went through the numbers with you and the price, that’s why we are building in, we don’t want an inflationary escalation because you know in every contract you build in inflation so we want a price fixed throughout the life of the contract…so the government what I can guarantee you (is) that we will cut the price once this project comes in, by 50 percent. Your electricity bill for every citizen of this country that’s connected to the grid will come down by 50 percent.”
Presently, the Guyana Power and Light (GPL) Inc. generates electricity at 20 cents per KWH and resells at 30 cents. Based on Jagdeo’s promise, this will be reduced to 15 cents per KWH if the GTE project comes on stream.
The Gas-to-Energy project will encompass three major aspects, that is, the pipeline to transport the gas to Wales; the Natural Gas Liquids (NGL) facility that will treat and separate the gas and the power plant to generate the electricity. So far, Guyanese have been told that the pipeline aspect, which is being pursued by US oil major ExxonMobil, will cost around US$1.3 billion.
Even this is expected to increase when Exxon closes critical contracts for same.
The costs for the other two facilities had not been disclosed, prior to Jagdeo’s press engagement on Wednesday. In addition, the public was told that a fee would have been attached to the transportation of the gas but the VP has since clarified that the natural resource will be supplied free of cost.
It must be noted however, that the Guyanese public will be saddled with the debt for the Gas-to-Energy project over a 20 year period, to repay the investments made. The repayment will be done via their monthly electricity bills based on the overall cost for the venture. But since this cost has not yet been finalized, the cost of electricity too is still in limbo.
The VP shared, “We are doing estimates. We are saying US$1 billion dollars now for the pipeline. That is where we run the numbers. So assuming it comes in at US$900 million, then if it comes in that will come down; the US$1.6 cents will come down to about US$ 1.4 cents so it comes down lower. If it goes to US$1.1 billion, it may go to US$1.7 cents…that’s just the pipeline part…then if you estimate the power plant and the NGL facility to be about US$700million… that will add another one point something cents per kilowatt hour.”
He was keen to note that while the five US cents per kilowatt hour may be the cost to generate the electricity, another five cents may be lost in the transmission and distribution of the power, which could take the final price for the sale of the electricity to about US$15 cents, after adding five US cents as profits for the company.
It must be noted that while Jagdeo has pushed aside renewable energy options as “expensive” the rest of the world has been racing towards such power generation options to ensure that the pace of climate change is slowed.