Govt plans can. For energy costing more than US $ 2B
Kaieteur News – The People’s Party / Civic Progressive Party Government (PPP / C) insists that it will put Guyana into an energy mix, which draws from gas and renewable sources at the same time.
Vice President, Dr. Bharrat Jagdeo
This newspaper recently highlighted that while much has been said about the proposed mix and its benefits, the public is hungry for information that is essential to build confidence in these projects especially as it involves with the gas effort ashore. (See that article here, https://www.kaieteurnewsonline.com/2021/04/11/are-guyanese-politicians-feeling-in-the-dark-for-electricity-solutions/.)
Another aspect of this energy mix that the PPP has not yet made clear is the cost.
In the proposed mix, the PPP intends to focus on gas, hydro, solar and wind. A modest cost projection for this mix runs over US $ 2B.
Although the PPP has not yet received a feasibility study for the onshore gas project, which should include the price, estimates for the undertaking hover around US $ 1B. That in itself is already a heavy investment. Some Guyanese have previously expressed concerns about pursuing such a project when it is not even guaranteed that it is the answer to the nation’s electricity crisis. But the reality is that this could 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 path back to hydropower development again, because hydropower is critical, given our capacity and ability in the country; our abundant water resources. ”
In 2011, Stabroek News quoted Jagdeo, the President at the time, as saying that the Amaila Falls project would cost US $ 835M. Now, this price tag can be much more.
Therefore, Guyana is likely to pursue a project of over US $ 835M and nearly US $ 1B for electrical purposes.
But there’s more in this “matrix”. Prime Minister Mark Phillips had said the government will also pursue solar and wind.
First Minister, Mark Phillips
How much will these cost? It depends on the size of these projects. The government has not yet said what percentage of the country’s energy supply will be drawn from these sources. But just to give an idea, Guyana is already using a solar farm in Mabaruma to generate power for neighboring Region One communities. That farm serving the relatively small population costs $ 227M. It was built in 2017 under the administration of APNNU + AFC but only became operational last year. Be that as it may, this gives us an idea of how expensive solar farms could be. Then there’s the cost for wind.
The government may say that it will offer various funding models for these projects such as public-private partnerships, etc. However, with those come different types of problems.
In fact, the dilemma is not only with the price for the projects. The concern is that Guyana could end up spending all this money, most, if not all, of which will have to be borrowed just to find a real solution to cost high electricity and power outages.
Although successful for some countries, onshore gas projects are not always the answer. This is why relevant studies are needed. The government’s decision to pursue an energy mix is not without merit as there are many factors that can affect the electricity supply from various energy sources. It is true that offshore technical problems can cause problems that could impede electricity supply. If there is a problem with a Floating Production Storage and Unloading (FPSO) ship, Guyana can go without electricity; even water and tide levels can cause problems.
In addition, there are problems that are likely to occur due to vandalism and these 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, any hydro project can be affected by a dry season or drought.
Therefore, having a variety of power supplies could be very useful. Nevertheless, such diversity must be proven technically and economically sound before a nation can spend such huge sums.
Take Ghana for example. Ghana’s power supply crisis continues to torment the people of that nation. Ghana tried to turn to gas for help. First buying it from Nigeria and then sourcing gas from its own Jubilee field.
But, according to the Natural Resources Governance Institute (NRGI), “… what promised to be an energy solution came with huge hidden costs while also failing to significantly improve Ghana’s power supply.”
Pic saved as energy mix