EVEN with rapidly growing oil revenues, the development of Guyana’s non-oil sectors remain key for sustainable growth; critical to the latter is the pursuit of value-added production, and for this to be feasible, there needs to be a notable reduction in the cost of electricity.

For instance, in the area of agriculture, Guyana’s bountiful supply of fruits and vegetables can be processed, packaged and exported for additional income, but because of the high costs of production, the country ends up importing the very products it can very well produce.

An even more specific example would be the fact that although Guyana is a producer of high quality plantains, the costs to produce plantain chip, plantain porridge and other plantain supplies are not feasible.

Such realities have led to the People’s Progressive Party/Civic (PPP/C) crafting a strategy to implement a comprehensive energy mix driven by hydro, wind, solar and natural gas produced by the oil production activities off-shore Guyana. This has been deemed a cornerstone for massive developments.

Combined, these efforts are expected to transform the country energy consumption to 75 per cent renewable by 2030.

It was only on Thursday that the National Assembly approved a $20.8 billion allocation to kickstart the iconic $900 million gas-to-energy project that has been earmarked for the Wales Development Zone, which once accommodated a thriving sugar estate. This facility, along with three others, were prematurely closed by the then A Partnership for National Unity + Alliance For Change (APNU+AFC) Government in 2017.

The area is now expected to house a plant, which will convert natural gas into electricity that would then be fed into the national power grid.

During the presentation of the country’s first “oil budget” of $552.9 billion, Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh, explained that the gas-to-energy project would be able to generate 300 megawatts of power. “The project also entails the construction of a 225 km 12” pipeline to transport the guaranteed minimum of 50 million standard cubic feet per day (mmcfd) of natural gas from offshore Guyana to the Wales Development Authority,” Minister Singh informed the National Assembly. The project is set to come on stream by 2024.

As it relates to solar, this year’s budget also contains a provision of $1.4 billion for the establishment of 33 megawatts (MWs) solar farms for Berbice, Essequibo and Linden.

According to the updated Low Carbon Development Strategy (LCDS 2030), the Government of Guyana has already secured US$75 million in funding to establish solar farms in eight grids. This is expected to produce some 27.8 megawatts-peak (MWp) of solar power to the Demerara-Berbice Interconnected System (DBIS).

The farms are expected to be up and running by 2023, paving the way for solar-generated power to replace 30 per cent of the electricity being supplied to areas along the Essequibo coast, Linden, Bartica, Lethem, Mabaruma, Mahdia, Leguan and Wakenaam.

These will be supplemented by the Hinterland Electrification Project which seeks to supply power to an estimated 30,000 households in several hinterland communities across the country. This is being funded by a US$7.2 million line of credit from the Government of India via the India Export/Import Bank. The installation of these 150-watt systems is expected to be completed in 2022.

Additionally, the PPP/C Government also intends to utilise one of Guyana’s most abundant resources to produce electricity – water.

NO OBJECTION
The government has already granted its “no-objection” for the Office of the Prime Minister to engage the China Railway Group Limited to construct the Amaila Falls Hydropower Station (AFHP) based on a Build-Own-Operate-Transfer (BOOT) model.

Previous reports suggest that the Amaila Falls Hydropower Project (AFHP) is expected to cost just under US$1 billion, and once operational, will have the capacity to generate 165 megawatts of stable and reliable electricity for 11 solid months of the year, with the 12th month during the dry season earmarked for scheduled maintenance.

Currently, GPL sells electricity to the nation at about US$0.33 per kWh, and this is expected to be reduced by 25 per cent within the first year of the operations of the Amaila Falls project, and by 50 per cent within five years; and by the end of 20 years by as much as 80 per cent. The government, in its invitation for bids, had said that it expects the country’s power demands to be met by 2026.

The Amaila Falls Hydropower Project, the pinnacle of government’s heavily-touted energy mix, was first identified in 1976 by a Canadian company named “Monenco” during an extensive survey of hydroelectric power potential in Guyana. And since then, various studies have justified and strongly supported the construction of the AFHP, which, like the Wales Sugar Estate, was also scrapped by the former administration.

IN THE WORKS
Nonetheless, with the return of the PPP/C Government, a second major hydropower project is in the works. “It is anticipated that Guyana will build two hydropower plants over the next 20 years: Amaila Falls and another which is still to be identified,” LCDS 2030 specified.

The document further stated that of the 33 potential sites, many were assessed in the 70s and 80s, when environmental and social standards were lower. In light of this, those assessments will have to be updated in keeping with the environmental and other commitments of today. It is anticipated that once the assessments are finalised, the new site will be identified at least by 2025.

Once up and running, the second hydropower plant is expected to provide some 370 megawatts of electric capacity by 2035 and a further 150 megawatts of capacity by 2040. In the meantime, Amaila Falls will be the focus of the hydropower programme.

The average lifespan of a hydropower system, according to the LCDS, is 100 years. Over this period, replacement of the mechanical and electrical parts would be required, but those account for less than 30 per cent of the initial cost. “Within the renewable energy resources available in Guyana, hydro will be important to provide firm capacity and short-term energy storage to compensate daily and weekly fluctuations from solar and wind,” the document noted.

In addition to the two giant plants, Guyana will also be implementing a number of small hydropower projects. To this end, efforts are already underway to implement three such plants: a 150-kilowatt initiative in Kato, the rehabilitation of Moco-Moco hydropower site, which would increase the capacity up to 0.7 megawatts, and a new 1.5-megawatt hydropower plant in Kumu.

“The Moco-Moco and Kumu hydropower projects will provide energy to [the] Lethem grid. It is expected those two projects, in combination with an ongoing solar PV project, will provide the Lethem grid with 100 per cent renewable energy in 2023,” LCDS 2030 predicts.

The document noted too that through other small hydropower projects established to support regional grids and hinterland villages, Guyana has the potential to produce 8.5 gigawatts (GW) of hydropower on 33 hydropower plants, including storage capacity and run-of-river.

The establishment of several windmills is also projected for the coming years.

Once Guyana is able to cut its power generation costs, the cost of value-added production would be drastically lowered, thereby accelerating the growth of several non-oil sectors, especially as it relates to agriculture and the agro-processing industry. Lower electricity charges are also likely to attract investors and inspire investment growth.