Oil has far-reaching impacts for Guyana’s energy security
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ACCORDING to the International Energy Agency (IEA), energy security is defined as the uninterrupted availability of energy sources at an affordable price. The energy security of a country relies on a complex web of long-term investments, adequate supply and insulation from global shocks to ensure a supply of energy that is in line with both “economic developments and environmental needs.”

Guyana’s long-term energy security is dependent on the investments made today that will impact the future of tomorrow. Last week, Dax Driver, the Chief Executive Officer and President of the Energy Chamber of Trinidad & Tobago joined others in discussing their perspectives on Guyana’s energy strategy during a webinar hosted by the Guyana Business Journal titled, “Transforming Guyana: Guyana’s role in a world that still needs oil.”

Experts made the point that Guyana has historically been highly dependent on oil imports, not just for vehicle fuel, but for the heavy fuel oil (HFO) that currently powers the electric grid. HFO is not only an expensive and heavily polluting source of electricity, but one that is tied to the global price of crude oil.
That has historically made fuel imports one of Guyana’s largest expenses and left the country at the mercy of high global oil prices. Guyana still suffers from some of the highest power prices in the region.

But experts are optimistic that is going to change as Guyana becomes a major oil producer. The gas-to-energy (GTE) project promises to begin a decade long transformation of Guyana’s electric grid, decoupling it from oil using cleaner burning local natural gas discovered offshore.

The government also plans to use oil revenues to build significant amounts of hydropower and other renewables over the coming decade, including the Amaila Falls Hydropower project.
The government will own the gas plant outright, while CH4/Lindsayca, an international firm, will be the operator under an Engineering Procurement and Construction (EPC) contract.
The plant will be a state-of-the-art 300-megawatt Combined Cycle Power Plant with a Natural Gas Liquids (NGL) facility and should be able to meet more than half of Guyana’s future electricity needs. The power plant is expected to be built as soon as December 2024 and is to cut power prices for homes and businesses by half.

Bringing the plant online will be a crucial part of meeting the rapidly growing demand for electricity as Guyana’s economy develops. Demand in Guyana is expected to triple in the next five years as the economy continues its fast-paced growth. Rural households could also benefit greatly from the development of infrastructure to expand access to electricity into the hinterland.
Using gas to build a diversified economy could also be an important step towards greater energy security. Natural gas is also used to produce cooking and industrial gasses like butane and propane and for manufacturing fertilisers.

The agricultural industry is heavily dependent on imported fertilisers and other chemicals, which have seen global prices skyrocket as a result of the war in Ukraine. Producing these goods domestically could help alleviate many of the pressures faced by farmers and poorer households.
Dr. Lorraine Sobers, a lecturer in the Department of Chemical Engineering Petroleum Studies Unit at University of the West Indies, also weighed in on the long-term implications this kind of project could have for the country’s energy security.

“The good news is Guyana has begun taking steps to move from that state of energy insecurity by becoming a net exporter of crude and low-carbon development strategy [which includes] the gas-to-power and renewable energy,” Dr. Sobers said.

As Guyana’s long-term energy strategy continues to evolve, it is clearer than ever that the oil discoveries represent a generational shift. For decades, Guyana was an energy importer with little control over global prices, dependent on systems like PetroCaribe.

Now, Guyana is set to be a major global oil producer. The development of affordable and reliable electricity generation that does not depend on international markets is yet another landmark for the country that further positions Guyana for its new role as a regional leader.

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