Wind, solar projects cheaper than hydro – new UN report

Oct 28, 2022 News

By Renay Sambach

Kaieteur News – At a time when Guyana is pursuing the US$700 million Amaila Falls Hydroelectric Project (AFHP) – a October 2022 United Nations (UN) report revealed that not only are wind and solar options cheaper but also pointed out that there will be a decrease in the hydro projects in the coming years.

An artist’s impression of the original iteration of the Amaila Falls Hydro Project.

On Tuesday, the United Nations Environment Programme (UNEP) launched its report titled, ‘Is natural gas a good investment for Latin America and the Caribbean?’ The UNEP’s report assessed the implications in Green House Gas (GHG) emissions, costs and job creation of the different power sector options (natural gas and renewable energy). With the Region having some of the world’s best conditions in term of solar radiation and wind power, the report pointed out that wind and solar technologies are winning the year-by-year race to be the cheapest sources of new electricity generation. As such, the UNEP report pointed out that wind and solar make the renewable pathway a no-regret option.

However, the report showed that some renewable energy options are way more cost-effective than others. It showed that if countries in the Region pursue wind and solar powered projects over hydro-powered projects a lot of money can be saved as it relates to construction costs.

President Irfaan Ali

To this end it was stated that wind and solar projects adapt more quickly to demand changes and also that the electricity production percentage from hydropower plants will decrease over-time. In fact, it was reported that the share of electricity production from hydro-powered projects will decrease from 45 per cent in 2019 to 41 per cent by the mid-century.

Further, it stated that new developments are primarily based on wind and solar-powered plants, along with geothermal plants in countries with reported potential, and small-scale hydro power plants (mainly run-of-river units).

Another factor the report pointed out, is the transmission cost for hydro, wind and solar projects. The transmission cost means the amount spent in excess of the fixed costs of operation for the electricity to be taken from the power-plant to cities and other areas. Notably, it was highlighted that not all transmission costs apply equally for a given power plant in the model. A table showed that distributed solar projects does not have any transmission costs whereas wind and hydro projects have a 100 per cent transmission cost per plant.

Vice President Bharrat Jagdeo

A reference that can be made based on what the UNEP’s report pointed out is between Guyana’s proposed US$700 million hydroelectric project, and Barbados US$100 million solar project. Earlier this year, the Government of Barbados signed a deal that will see the country realising some 178 MW of electricity using hydrogen and solar energy at a cost of some US$100 million. Notably, Barbados is now leading the Caribbean region with the announcement that it will be building the largest clean hybrid power plant in the Caribbean, producing base load power for 16,000 Barbadian households from solar and locally produced green hydrogen.

On the other hand, Guyana’s US$700 million hydroelectric plant will supply some 165MW to the national grid.

The Amaila falls project was introduced several years ago by the then Bharrat Jagdeo-led PPP administration but was shelved. Back then it carried a higher price tag. When the PPP administration came back into office the project came back on stream. The contract was awarded to a Chinese contractor but it was disclosed in July 2022, that the company was having a hard time raising the money for the project.

Despite this, Guyana’s President, Irfaan Ali later declared that despite the hiccups Government was not going to abandon the project. For his part, Jagdeo, who is now Vice President was reported in the media saying that solar is simply too expensive for Guyana. It was during a June 2022 Press Conference when Jagdeo, who was one of six persons back in 2010 to receive the United Nations Environment Programme (UNEP) Champion of the Earth, claimed that the generation of power in Guyana through renewable options such as solar, wind and even hydro is “very, very expensive” but the administration is still adamant to go ahead with the Amaila hydro falls project.

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