Coalition banking on renewable energy options to lower power costs

Oct 19, 2022 News

…maintains new feasibility study must determine investments for gas project

Kaieteur News – The A Partnership for National Unity + Alliance For Change (APNU+AFC) Coalition is not opposed to the use of gas for power generation but maintains that detailed studies must chart the way forward to determine its viability to lower the cost of power generation.

Opposition Leader, Aubrey Norton

In the meantime, Opposition Leader, Mr. Aubrey Norton has stated that the top considerations for his party at this time remains renewable options, as recent studies prove this option to be cheaper.

Norton provided an explanation to this end during his weekly press briefing on Tuesday in response to a question from this newspaper. During his opening statement, he briefly announced his intention to lower the cost of power generation but did not delve into details; however when he was asked to disclose how he intends to achieve this objective, the Opposition Leader made it clear that the cost for solar in recent days have declined, making this a viable option for Guyana.

He explained, “Research is showing that solar is now coming in at a cheaper cost and therefore solar will be one option. There are areas of research that would have established that in some areas wind might be an option and then there are areas in which the hydro is a possibility.”

Norton said the Coalition’s objective would be to continue its research to ensure a combination of best-suited approaches, which may even involve the use of gas.

In the meantime, the Opposition Leader pointed out, “that is why we worry when they talk about the gas to shore project which everyone is seeing is not being feasible but the government is going ahead with it and we are concerned because it is in the same realm with (Vice President Bharrat) Jagdeo and he has a history of being involved in projects that become white elephants and merely become slush fund.”

Norton went on to list out the Skeldon sugar factory as an example where the specific goals were never realized, while pointing to the fiber optic cable and Amaila Falls projects as other examples.

To this end, he argued that the VP should not be involved in the management of the country’s resources since he has “wasted” millions over the years. In fact, he said he believes the gas to energy project is “indicative of the old approach where Jagdeo comes up in his head with a project, pulls figures from the sky and then say it is viable” which only ends in failure. In fact, he concluded that the US$2 billion natural gas project is not aimed at reducing the cost of power generation but will serve as a “slush fund”.

According to him, “we have a number of people who are researching and the research is showing that it’s not viable and therefore we will continue to expose the fact that it is not viable and take political action, picketing, etcetera to establish to the world that Jagdeo’s approach is wrong and that we need a new approach… based on the research that was done that the gas to shore programme, as presently constituted at the present venue is not viable and feasible and therefore should not really go ahead. Add to it that no recent feasibility study was done to establish its feasibility.”

A UNDP chart depicting the huge decline in cost to generate electricity using solar and other options

Meanwhile, Norton made it clear that his intent is to explore the best renewable option for specific locations to produce electricity. “We intend to, in a very judicious fashion, implement programmes aimed at wind generation, solar, hydro and those based on gas and fuel that are considered advantageous. We cannot go down the road of making one sweep. We have to look at all and see where they are best suited and then implement them and that is what we will do as a government,” he said.

Solar power potential

This newspaper had reported that Guyana currently receives enough sunshine every two hours, to power the country’s present electricity demands for an entire year. This is according to the Head of the Guyana Energy Agency (GEA), Dr. Mahender Sharma. He shared this information during the first ever Energy Conference and Expo in February of this year.

Meanwhile, it was also reported that power generation through solar has become far cheaper than which is being reported.

The United Nations Development Programme (UNDP) in its 2022 Report titled: “Uncertain Times, Unsettled Lives: Shaping our Future in a Transforming World”, explained, “Contrary to the projected average annual cost reduction of 2.6 percent between 2010 and 2020, solar photovoltaics costs declined by 15 percent a year over the same period.”

This means that the price of electricity from solar declined by 89 percent in these 10 years. The UNDP used a chart to depict the massive declines in which it explained that in 2010, the cost to generate one megawatt (MW) of power moved from US$359 in 2009 to just US$40 in 2019. Not only that, but this means solar power generation also proved to be cheaper in comparison to at least two other clean energy options – gas and wind. Despite both wind and gas power also recording a decline in cost to generate, the report maintained solar is the cheapest option. For instance, gas dropped from US$83 in 2009 to US$56 in 2019 per MWh. Meanwhile, wind power generation in 2009 also declined from US$135 to US$41 in 2019 per MWh.

Despite these strides, the Government of Guyana has decided to pursue a Gas-to-Energy (GTE) project that is likely to cost the country some US$2 billion. The GTE project has three components – the pipeline to be constructed by oil major, ExxonMobil, and a Natural Gas Liquids (NGL) plant to treat and separate the gas, paired with a power plant to generate the electricity. So far, Exxon has said that the cost of the pipeline could be US$1.3 billion. In the meantime, Vice President Bharrat Jagdeo “estimates” that the cost of the other two plants will be around US$700 million.

This venture is expected to generate 300 MW of power to Guyanese once completed. However, this project involves several environmental risks and economists have been questioning its feasibility since the project cost has increased significantly since the first study was conducted.