GUYANA: Govt.’s plans for energy can cost in excess of US$2B

Vice President Bharrat Jagdeo

In the proposed mix, the PPP intends to focus on gas, hydro, solar and wind. A modest projection of the cost for this mix runs in excess of US$2B.

While the PPP is yet to have a feasibility study for the gas-to-shore project, which should include the price, estimates for the undertaking hover around US$1B. That by itself is already a heavy investment. Some Guyanese have previously expressed concerns about pursuing such a project when it is not even guaranteed to be the solution to the nation’s electricity crisis. But the reality is that this might just be half the cost for the proposed mix.

Last year, Jagdeo revealed that the government is already looking to revive the controversial Amaila Falls Project. He was quoted by one online media outlet as saying, “We have started reviewing the documents etc., to chart a pathway to hydropower development back again, because hydro power is crucial, given our capability and capacity of the country; our abundant water resources.”

In 2011, Stabroek News quoted Jagdeo, the then President, saying the Amaila Falls project would cost US$835M. This price tag can now turn out to be considerably more.

——————–  Added by Guyanese Online ——–

PDF – AMAILA FALLS PROJECT– Energy Guyana 2021-3 Amalia Falls Hydropower Project

————————————————————

Therefore, Guyana is likely to simultaneously pursue an over US$835M project and an almost US$1B both for electrical purposes.

But there is more in this “-atrix”. Prime Minister, Mark Phillips had said that the government will also be pursuing solar and wind.

Prime Minister, Mark Phillips

How much will these cost? It depends on the magnitude of these projects. The government is yet to say what percent of the country’s energy supply will be pulled from these sources. But just to give an idea, Guyana already uses a solar farm at Mabaruma to generate power to nearby Region One communities. That farm which is servicing the comparatively small population costs $227M. It was constructed in 2017 under the APNNU+AFC administration but only became operable last year. Be that as it may, this gives us an idea of how costly solar farms could be. Then there is the cost for wind.

The government might say that it will propose various models of financing for these projects like public-private partnerships, etc. However, with those come different kinds of problems.

In reality, the dilemma is not only with the price for the projects. The concern is that Guyana may end up spending all this money, most, if not all, of which may have to be borrowed, only to still come up short with a real solution to high electricity cost and power outages.

Gas-to-shore projects, while successful for some countries, is not always the answer. That is why relevant studies are needed. The government’s decision to pursue an energy mix is not without merit as there are several factors that can affect the supply of electricity from various sources of energy. It is true that technical problems offshore can cause problems that may hamper the electricity supply. If there is a problem with a Floating Production Storage and Offloading (FPSO) vessel, Guyana can go without electricity; even the water levels and tides can pose problems.

Furthermore, there are problems that are likely to occur due to vandalism and those cannot be ignored. With solar, a simple cloud can stand in the way of the source of power, the sun. And, as is well known, dry season or drought can affect any hydro project.

Therefore, having a diversity of power supplies may prove to be very useful. Nevertheless, such diversity must be proven technically and economically sound before a nation spends such huge sums.

Take Ghana for example. Ghana’s power supply crisis continues to torment the people of that nation. Ghana tried turning to gas for help. First buying it from Nigeria then sourcing gas from its own Jubilee field.

But, according to the Natural Resource Governance Institute (NRGI), “…what promised to be an energy solution came with enormous hidden costs while also failing to improve Ghana’s power supply significantly.”

Note that Ghana’s population is 30.42 Million. Guyana’s population is less than 800.000.

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Comments

  • brandli62  On 04/18/2021 at 9:28 am

    “Last year, Jagdeo revealed that the government is already looking to revive the controversial Amaila Falls Project.”

    The Amaila Falls hydroelectric damm project might have made sense in the pre-oil & gas era, but now it does not make any sense. The estimated costs for the project was USD 650 million in 2011. Guyana has a population of less than 800’000. It might grow to 1 million in the next 20 years given the growing demand for labor in the oil and gas industry. The proposed hydroelectric plant would be located in the deep jungle 250 km away from Georgetown. An expensive infrastructure (power lines, roads) would have to be built to bring the electricity to the coast. The costs would probably be at the end closer to USD 1 billion. That money could be spent wiser and with less impact on the environment by doing the following:

    1) Equipping private homes, commercial and public buildings widely with solar panels and storage batteries

    2) Replacing diesel-powered electricity plants with two state-of-the-art gas-powered plants (one in Georgetown, the other in New Amsterdam)

    3) Establishing wind parks along the coast, where feasible.

    4) Building a state-of-the-art incinerator in the Greater Georgetown Area to burn rubbish and garbage that would use the generated heath for electricity production

    With an incinerator in place, the land fills could be closed. They are ticking time bombs as they release methane, which contributes to climate warming, and they will contaminate the ground water sooner or later. Finally, land fills are responsible for lots of the plastic that ends up in the rivers and oceans of the world.

    If measures 1-4 are not sufficient to meet Guyana’s energy needs in the future, the government should consider building a hydroelectric dam.

  • wally n  On 04/18/2021 at 10:41 am

    Any country lucky enough to have natural hydro electricity should develop, that is total independence. Remember there are lines running under sea for miles, couple of hundred on poles, easy peasy. Solar panel on homes and business is win win. Garbage to grid is long overdue, today that is turn key, ideal for villages. I am not a believer of wind farms, looks good on paper can be problematic as they get older. The hydroelectric can generate enough to replace most of the present plants, plus whatever happen to the “move the city people”, hydroelectric is their trump (sorry) card.
    Obvious lot of external forces at work with the country’s planning, we can all hope the decisions are not made for personal gain only….you get a bridge and you get a bridge, every one gets a bridge.

  • brandli62  On 04/18/2021 at 11:38 am

    Wally, large share your views. Hydroelectricity is a great renewable resource. Switzerland generates at least 60% of its electricity with water power. However, keep in mind that the Guyanese population is small. It will have ample natural gas resources that can complement for what is not covered by renewable energy. Regarding wind power, it would make sense along the coast as there is constant wind blowing. Wind power is complementary to sun as is will generate energy also at night or on overcast days. Wind generator technology has improved a lot over the last two decades. In addition, Guyana will not face issues of freezing or hurricane-force winds. I would reconsider a hydroelectric dam in ten years after implementation of the points 1 – 4 mentioned in my previous commentary.

    Good to hear that you think an incinerator would be a good idea!

  • wally n  On 04/18/2021 at 12:16 pm

    I did not dis agree with anything you mentioned, we are both looking at “clear canvas” I have problems with government and new money. In ten years I don’t think you will find a dime.(see Trinidad) The US are/were masters of infrastructure planning, build it and they will come.(see Brazil)
    We will see.

    • brandli62  On 04/18/2021 at 2:02 pm

      Good that we are on the same page! I agree with your point. I am probably arguing from a rational European point of view not taking into account that people in power may have personal enrichment as part of their agenda…. Nevertheless, we should be constructive.

      • the only  On 04/18/2021 at 6:22 pm

        You have to stop with all your bad talk about us here in Guyana, we have enough problems to deal with, like the crime and covid.

  • Alfred Bhulai  On 04/18/2021 at 10:55 pm

    Solar power is now so cheap that at US$2 per watt for my clients in Guyana, that Mabaruma 150 kW solar project would now cost US$0.3M.
    The US$400-800M gas-to-shore project should be abandoned, because US$400 can install 200 MW of solar power with 2 no-sunshine days storage capacity. The gas-to-shore fuel can indeed reduce the current electricity costs from 32 US cents to 7 US cents per kWh, but solar can reduce it to 0 US cents!
    One of my clients gave permission for his invoices to be shared with the Guyana Energy Agency (GEA), who have since awarded Farfan & Mendes and partners contracts to build 2.5 MW solar power generation for Lethem, Mahdia and Bartica for the same price my client paid. And they are going to make big profits, because transmission and distribution are not included.

  • brandli62  On 04/19/2021 at 3:43 am

    Alfred, that’s great to hear. I am a big fan of solar power. I have a 6.7 kWp system with a 10 kWh storage battery installed on my home in Switzerland. I am covering 90% of my annual electricity needs by solar energy. Guyana given its location on the equator is perfect for solar energy. The technology is also essentially maintenance free. Hence no returning costs once the system is installed.

  • wally n  On 04/19/2021 at 9:13 am

    and heavy duty industries, manufacturing, please??

    • brandli62  On 04/19/2021 at 10:21 am

      Correct, but what type of heavy industry do you want to establish in Guyana? The only realistic possibility would be an aluminium smelter given the rich Bauxite resources of Guyana.

    • alfredbhulai  On 04/20/2021 at 10:33 pm

      Yes, manufacturing too. We would just have to add the power factor requirement for the virtual (reactive) power.

  • wally n  On 04/19/2021 at 10:53 am

    Nope…. Guyana is loaded with tons of mining possibilities, the manganese production was nationalised by the PNC,(making chinese smile) there are many others, in addition future in Fruit juices, vegetable packing, the need for stable and powerful source of electricity must be present before large scale involvement. Solar is natural and will/should be major consideration for the average home owner/small business in Guyana and the Caribbean. Manufacturing cannot shut down for a couple of days waiting for sunlight. Other nagging questions, who pays for the panels, for non mansion Guyanese, what about income source, remember once established, many years of revenue, and open doors for potential expansion from any industry, manufacturing..

    Guyana is on the upswing, panels can’t cut it it, gonna need POWER!!!

  • brandli62  On 04/19/2021 at 4:44 pm

    Agreed, but you need the investors. It does not make sense to build huge LNG power plants without having investors that are willing to build a steel plant in Guyana. I believe you will not be able to find them.

  • wally n  On 04/19/2021 at 6:03 pm

    I think they are many “investors” good ROI, we talking fuel, the problem is over sight, nothing unique, just more sophisticated crooks, there in lies the problem.
    Time will tell, have no insight to the planning.

  • brandli62  On 04/20/2021 at 4:00 am

    Wally, here is my take. First, Guyana would be foolish not to monetise the gas resources, which make up 20% of the offshore hydrocarbons reserves. Second, it’s clear that there will be far more gas offshore than Guyana can use. Third, the focus should be on gas liquefaction and export of LNG. Forth, one or two on-shore gas-powered electricity plants make much sense. They will complement solar energy on rainy days and during the night. They can be easy turned on and shut down again. Finally, they will replace existing diesel-powered plants, which require the import of diesel and have a much worse environmental foot print than LNG.

    Regarding heavy industry, the most realistic option is the installation of an aluminium smelter, which would make use of the local bauxite resources. They typically require a cheap source energy, which Guyana could provide with it’s off-shore gas.

    Regarding the gas-to-shore project, I feel that the government should seriously consider the following options. Instead of piping gas to shore for liquefaction and export, might make more sense to use special purpose ships to do the liquefaction process off-shore at the production site(s). This would have the advantage that LNG could be brought on shore by boat, where needed in Guyana, and exported directly without the need of brining it first onshore. This system would also be more flexible, since it will not require the new pipelines to be build once other oil fields move to production. To date, I have not read about this option in the Guyanese press.

    • alfredbhulai  On 04/20/2021 at 11:17 pm

      Do you know Trinidad has 670 MW of unused electrical generation? It was built when Eric Williams had the idea of smelting Guyana bauxite in Trinidad. I don’t know why it was not pursued.
      Meanwhile the T&T Government has to pay the T&TEC to maintain the unused generation capacity, contributing to the subsidy for electricity.
      There was an idea a few years ago (2014) to power up the unused capacity and send it with an undersea cable to Guyana and Suriname. it would have been fuelled by the natural gas from T&T. But a lot of people did not understand the project, or had other vested interests.
      It would make more sense today for the gas found in the Guyana wells to go to T&T to use up their generating capacity and send on the electricity to Guyana. The thinking was that when the gas runs out in T&T, as it must, electricity can be supplied by hydro and solar power that would be developed in Guyana in the meantime.

      • wally n  On 04/21/2021 at 10:32 am

        Never knew that. Seems complicated. another example of bad planning by Trinidad? It seems that usage calculation might not be easy, Ontario has/had to pay the US to take their excessive.
        Me just me, I would never tie small bundle with Trinidadians, shudder to think, the electricity supply of the country in Trinidadian hands. I read that they are having problems with plant maintenance.
        Solar panels will dominate a good portion of Guyana and the Caribbean, but for a country that will have massive power needs, it’s use is limited.

  • wally n  On 04/20/2021 at 11:26 am

    Makes sense to use($$$) the product, but then the details. On shore storage for local supply, maintaining a shipping service,ownership, lease
    ( Saguenay Demba) one has heavy initial cost, the other might be expensive to maintain. Is there a time limit, is price fluctuation a boogeyman. I have no idea of the cost than will occur.
    There are many valuable minerals including Bauxite, Sand,etc, marketing of local produce, improvement/modernization of infrastructure machinery, sewer, water purification plants… will all require a larger portion of the grid.
    I don’t see the introduction of solar as huge change, can be implemented at any time.it is the down the road projection, I tend to lean towards Hydro Electric, will last forever, and open the country, the city and coastline seems to be close to bursting out.
    Now that all these situations keep coming up, it is becoming easy to see why,inexperienced Governments end up taking the advice of crooked “consultants”
    Off topic…did you have family in the Pilot Service???

  • brandli62  On 04/20/2021 at 1:59 pm

    All good points, Wally! Hydro electric energy is of course a great research. We have lots of dammed lakes in the Swiss mountains. The problem is that you’ll have to sacrifice a pristine valley in the jungle that will flooded. Hence, one would want to exploit other energy sources before sorting to hydroelectric power in Guyana.
    Off topic… yes, one of my uncles on the maternal side was in the Pilot Service. Did you know him?

  • wally n  On 04/20/2021 at 2:58 pm

    Guyana has space,land,rivers,lakes, streams, we good. Hydro is a long term solution, worth serious consideration, I would think that income from oil/gas can help absorb all or most of the cost. There is almost a good chance that the Government can partner with the private sector, even though I am not a fan of private sector in essential services.
    As far as I know there was/are lots of studies done on Hydro by (possibly a school mate of mine)
    Maurice Veecock, a senior lecturer, Department of Civil Engineering in the Faculty of Technology at the University of Guyana said that the Amaila Falls project would not work unless the flow of water is diverted from other sources and fed into the reservoir there. Veecock worked on hydro projects in the 1970 and 1980s and has institutional and technical knowledge about everything hydro in Guyana.
    Off topic …My good friend (recently passed away)and I were cadets of THD, I was Engineering, he was Marine, and he did mention your relative, probably Chief Pilot. Good Times Good Times

    • brandli62  On 04/20/2021 at 3:51 pm

      Interesting and not surprising points about the Amaila Falls Project. Personally, I would favour investigating possibilities for a hydroelectric damm in the area south of Linden or in Berbice, which would be closer to the population centres of Guyana. Suriname’s hydroelectric damm could serve as an example. Regarding financing, delaying the hydroelectric damm project until some time after 2030 would make sense. By 2030, the oil revenues are likely to increase massively with 5-6 FPSOs in operation and oil production peaking.

      I am sorry to hear that your dear friend has passed away recently. It was wonderful the hear that you knew my uncle Jules Richard “Dickie” Kranenburg. He passed a way in 2016. He was also served as Minister of Public Works and Communications in the Hoyte government. I have fond memories of him as a fun person with a big heart and I enjoyed many intense discussions over the years. May they both rest in peace!

  • wally n  On 04/20/2021 at 4:01 pm

    I do miss him, he worked with both Governments, he would have known your uncle well, he was privy to much, I never asked him, though he did mention a little, I never mention his name I would not like anyone to think he might have said something. Stay well.

  • brandli62  On 04/21/2021 at 4:33 am

    Wally, thanks for your thoughts. Your late friends seems to be very dear to your heart and he appears to have been a good man! By the way, if I recall correctly I has offered you a beer and dinner in case you make it to Munich after the pandemic ends. Correct? You can reach me by email brandli(at)bluewin.ch any time.

  • wally n  On 04/21/2021 at 10:40 am

    Yea man…If the Table Tennis Masters is held in Europe, will be there, if not I will have to convince my son to come along, he, not a fan of Europe, his wife would jump at the idea. If that does not come through, maybe you can come to Canada, I am assuming you never came before.
    Thanks

    • brandli62  On 04/21/2021 at 1:20 pm

      A trip to Canada is long overdue! I have four (Guyanese) cousins living in Toronto (2x) and New Foundland (2x). However, the pandemic makes planing difficult at present….

  • wally n  On 04/21/2021 at 2:25 pm

    I emailed you, just checking, come to Canada, will take you into the bush (Canadian north) you don’t seem to be a bush guy..

    • brandli62  On 04/21/2021 at 3:52 pm

      Seen you message! Thanks! Canadian north sounds interesting. Yukon? Hudson Bay? Yellow Knife? More details please (via email)!

  • wally n  On 10/09/2021 at 4:51 pm

    This is why more control of your energy is necessary, moves you to the front of class…

    Lebanon’s two main power plants were forced to shut down after running out of fuel, the state electricity company said Saturday, leaving the small country with no government-produced power.
    Advertising
    Lebanon is grappling with a crippling energy crisis made worse by its dependency on fuel imports. Erratic power supplies have put hospitals and essential services in crisis mode. The Lebanese increasingly depend on private operators that also struggle to secure supplies amid an unprecedented crash of the national currency.

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