An energy policy for Guyana

However the Amaila Falls Hydro project turns out, there seems to be an implicit agreement that the country needs an energy policy. Janette Bulkan favours a Green Paper which in Westminster type countries is a document published by the Government as part of the consultation process before any major policy change is undertaken. While the LCDS March 2013 refers to the Amaila project – no doubt because it was already well-advanced – it did not place the project in any policy context. For that and some three years earlier, there was the Guyana Power Sector Policy and Implementation Strategy 2010 done by Verna Klass, which incidentally also anticipated Amaila coming on stream in 2015. But that Strategy included a specific recommendation that the Potaro river basin be developed in stages to meet the increasing requirements of the national grid. That Strategy noted that fuel oil was a better option than wind which it considered “did not seem appropriate for the long term either as it would be displaced by the expected hydro facility”. It also recommended the ongoing use and research into bio-fuels.

And if we go still further back to the National Development Strategy (2001 -2010) we note an entire chapter dedicated to Energy. The NDS looked at alternative energy sources noting that “many ideas for utilising renewable energy sources such as solar and wind power, are appealing, but that the costs are high. It added however that in the view of some experts, the cost of both wind energy applications and solar power generation could be considerably reduced.

The NDS made a number of recommendations some of which are as valid today as they were ten years ago. These included enhancing the energy-generating capacity in the interior districts to increase economic activity in all parts of Guyana, attaining an equitable distribution of economic activity, and eradicating poverty in the most depressed areas of the country; the use of locally available energy resources utilising local production e.g. bagasse in sugar and rice mills, and wood waste in sawmills; tax credits to encourage the use of wind and solar energy; and the exploitation of hydropower centred on Amaila in the Potaro River Basin. It should be noted that the NDS saw Amaila not as a stand-alone project but in a modular framework.

The GPL elephant in the room
Pointedly the NDS made the following comment in relation to Guyana Power & Light Inc.

“Unfortunately, the Guyana Power and Light Company, which generates most of the energy consumed in Guyana, does not meet the required criteria: its production volumes are too low, and it is far from reliable. It follows, therefore, that unless steps are taken expeditiously to improve this company’s performance, or to secure additional sources of energy, our developmental progress would be somewhat hindered, and the attainment of many of the objectives of the National Development Strategy would be curtailed.”

There is no evidence that the exhortation sounded more than ten years ago, that the problems of GPL be addressed “expeditiously” has been heeded. That is a non-negotiable and should have been addressed a long time ago. In failing to do so, we have wasted probably an average of $4 – 5 billion per year over the past ten years, enough money to solve a number of problems. But let us return to the wider energy policy.

Revisiting Guyana’s energy policy
It seems we all can agree that if the debate on Amaila has produced one positive side-effect it is that it is time that we revisit the country’s energy policy. The starting point for such a policy should be past policies and studies which are no doubt held in the Prime Minister’s ministry and the Guyana Energy Agency. With no access to those studies and papers Plainly Business looks at the ingredients of that policy.

That is not to say that other national and regional studies are not available. The EU for example has recently published a green paper setting out its 2030 framework for climate and energy policies. That seems too advanced for a country like Guyana in an early stage of industrial development. More relevant in my view is the report and recommendations of the Academy of Sciences for the Developing World (TWAS), an Italy-based a group of distinguished scientists from the South established in 1983.

Guyana of course has its own mix of energy sources and industrial, commercial and residential needs. It is believed for example that Guyana cannot develop its bauxite resources without smelting facilities which in turn require significant amounts of electricity. Rice and sugar can have their distinctive features and can be net suppliers of electricity. Indeed someone recently suggested that co-generation could contribute to sugar’s viability while producing low cost power to the national power grid. And of course we have enormous potential for hydroelectric power which we can jointly develop with neighbouring Brazil. Then of course there is solar and wind power potential, the technology for both of which is sufficiently developed as to make them economically viable.

The goal of any energy policy should be agreed after wide national consultation but it seems reasonable that the goal should be first to ensure that every citizen has access to some form of electricity. It is a given that access to reliable, affordable and socially acceptable energy services is a pre-requisite to alleviating extreme poverty, a basic developmental goal. The next is to build a competitive economy and a secure energy system by creating more demand for efficient and low carbon technologies and spurring research, development and innovation. These in turn create new opportunities for jobs and growth. Every school too should have some form of power to be able to access the internet and to use the computer. Hospitals and other medical facilities should have full coverage for the treatment and convenience of patients and staff.

These are not some outlandish goals but simply what every citizen deserves and what the central or local government should provide. Of course someone will ask why not sanitary facilities and running water. My answer is that these and electricity are not mutually exclusive and if we can spend mega-bucks on prestige projects we must be prepared to spend on satisfying the basic needs of all citizens.

It has been estimated that the amount of electricity required to make it possible for people to read at night, pump a minimal amount of drinking water and listen to radio broadcasts amounts to no more than 100 kWh per person per year. That is not beyond the capacity of this country. But it is the government that will have to make this possible since the only interest markets have in people is their purchasing power. Markets too are not interested, except when forced to, to choose the cleanest and most efficient technologies most of the time. It is only through government policies and intervention that social needs are addressed and satisfied.

Now having agreed on the goals the next step is to establish policy priorities to achieve them. The following are the priorities recommended by TWAS.

1. The promotion of energy efficiency and adoption of minimum efficiency standards for buildings, appliances and equipment, and vehicles.

2. Reform of and re-direction of energy subsidies.

3. Identification of the most promising indigenous renewable energy resources and implementation of policies to promote their sustainable development.

4. Acquisition of advanced energy technologies, while building the indigenous human and institutional capacity needed to support sustainable energy systems.

5. Accelerate the dissemination of clean, efficient, affordable cook stoves.

As the country continues its development path, its demand for overall energy use is expected to grow strongly; it is not too far-fetched to predict that demand can grow three to five times in the next few decades. The challenge the country faces is meeting that demand while simultaneously playing its role in the global transition to clean, low-carbon energy systems. I am optimistic about our country’s ability to meet that demand with sustainable sources of energy rather than through fossil fuel consumption.

Starting place
A defined strategy has to start from where we are. While it is possible with some effort to ascertain the official figures for the import of fuel, data on usage for industrial, commercial, residential, travel and leisure purposes are probably not available. A start should be made to determine those data along with reasonably accurate estimates on the illegal smuggling of fuel products in Guyana. In the absence of such data, it becomes more difficult both to change behavioral patterns as well as to accelerate progress, especially toward increased energy efficiency and lower-carbon energy sources. By successfully promoting the development of indigenous renewable-energy industries, the country will have the additional benefit of creating new economic opportunities, reducing its exposure to volatile world energy markets and conservation of resources for internal investment by curbing outlays for imported fuel.

As TWAS cautioned, policy recommendations that require changes in the way people and businesses behave will be easy to implement. The formulation of any game-changing practices will eventually require the active engagement of all sectors of society, including individual consumers and local communities, non-governmental organizations, private businesses and industry, the science and technology communities, governments, intergovernmental institutions and donor organizations.

In terms of particular sources, Guyana can choose a mix of options from renewable energy the technologies of which have improved to the point where their cost can be considered as reasonably competitive. The broad categories of renewable energy are biomass, wind, solar, hydro and geo-thermal while co-generation offers another option to the mix.

Plainly Business will look at these next week.

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