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Former Member

EXPENSIVE & UNRELIABLE ENERGY – one of the main hindrances to Guyana’s economic success

August 8, 2015

By Sase Singh in Washington, DC
AS a Guyanese, I’ve become rather hopeful since the Jagdeo days about this concept of unleashing the nation’s hydroelectric potential. Reliable, cheap and sustainable renewable electricity supply is a pre-requisite if this country is to be taken to the next level from a subsistence, raw material producer to a value-added supplier of “higher priced and much sought after” products.

The challenge is even more valid, considering that the nation’s main source of energy inputs (Venezuela) has become one of its most potent economic threats. That is a dangerous and incongruous position.
Is hydro power one of the answers?

An artist’s impression of the Amaila Falls Hydro-electric Project.

In the last decade, as Guyana attempted to harvest its “green potential”, considerable progress was made on the conversation around the construction of a hydropower plant. In 2012, according to the International Energy Agency(IEA), hydropower generated 17% of the world’s electricity.
Guyana does not have any active and operational coal mines, natural gas plant or nuclear energy at home that is being harvested at this point in time and thus our option are clear – renewable energy or continuing to surrender our energy security to foreign power.

Let us not be fooled by these current low levels of oil prices. Anyone with any understanding of the oil market will be aware that the current average price of approximately US$60 a barrel is not going to last forever.

Any policy-maker with any modicum of commonsense will realise that these low oil prices provide the perfect opportunity to plan for the next wave of higher oil prices and they are coming; let us not live in “la la land.”

And when they come, if we have a renewable energy plant in place, especially one in which we have a natural advantage such as hydropower, we will be ready.

Guyana has already sunk some Gy$4.4 billion into this Amaila Access Road and therefore it would be financially imprudent to let all that money slide into the forest without launching a fighting chance at developing this project.

This project is well advanced with the nation now having a fair understanding of the environmental studies, the components of the project (hydropower, plant, the transmission line and interconnection into GPL and this access road).
But on a bigger scale, the intangible benefit would be a tangible investment in a region that is being claimed by our neighbour. This is Guyana sending a strong message to the world – we are serious about our territorial integrity and we shall take every measure to develop every 83,000 sq. miles of Guyana.
In 2014, GPL utilised some Gy$25 billion of the total fuel imports into Guyana of Gy$115 billion.
That translates into a trajectory whereby the consumers can be asked to pay on average some US$0.32 per KWH for the foreseeable future and if the world oil prices escalate, then God help us. We do not have a choice. The natural potential remains readily available only waiting to be harnessed at an expected cost of some US$0.03 per KWH after 20-year payback compared to what we are paying now – US$0.31 per KWH.

We also have to consider that some of these GPL generators will be up for renewal within the next 10 years, which translates into significant capital investments. All the indicators arrive at the conclusion that developing our hydropower potential merits immediate support; it is a no-brainer.
A national project – integrity is a pre-requisite.
While acknowledging the effort from the previous Administration on the Amaila Falls Project, it was extremely excruciating for me to observe how that deal got bungled all because their greed was greater than our need. For a deal like this to work, it cannot be shrouded in lack of transparency and total disrespect for ‘value for money’ to be spent.
A clean track record from the project aggregator is a pre-requisite. Clearly as a result of their poor track record at good governance, the Ramotar and Jagdeo administrations could not claim that they had the integrity to see this through to the end and that is why Amaila failed in 2012-2013.
As Lee Kwan Yew said: “No Government is infallible but the people must believe that whatever decisions are arrived at, they were made in the interest of the community.”
This Granger/Nagamootoo-led government is better suited to assemble such a big deal and if properly done it should not come in at more than US$700 million for a 165 MW hydropower plant. It is time!
Why?
1. From all the technical reports I have read, a well-structured hydropower deal is the most economically viable, environmentally sensible and socially responsible mode of electricity generation in Guyana.
2. Based on the financial structure I have seen, consumers can immediately benefit from a drop in electricity rates to around US$0.25 per KWH from day one after the plant starts generating “juice”. Then after 10 years, a further drop in the rates to about US$0.18 per KWH is envisaged as the payback model materialises. But the key to the deal is the financial structure and the down payment being made by the Government. After 20 years, after the investors have been fully repaid, power should be delivered to the grid at US$0.03 per KWH. This will be Guyana’s very own industrial revolution in the making – US$0.03 per KWH tomorrow vs. US$0.31 per KWH today.
3. Any hydropower project usually comes with a low maintenance 100-year life cycle, which means we can have electricity being delivered to GPL for 80 of the next 100 years at the negligible sum of US$0.03 per KWH. Therefore I am imploring the policy makers to not disregard this Amaila project because it was conceived by the previous administration, but to rescue it, restructure it and let us do this deal in a more transparent and sensible manner this time around.
4. But first things first. Where is the IDB due diligence study conducted by their panel of experts into the market, financial structure, technical construct and economic details on this project? The IDB’s decision to back this project in a syndicated deal will be essential since their decision not only brings money to the table, but the reputation of a multilateral institution that can be the “calling bird” for other institutions like the World Bank to join the deal.
5. With hydroelectricity in the game plan, Guyana can then harvest other sources of renewable energy including other hydropower sites to feed the needs of an economy that is expected to expand with such a cheap and reliable source of energy. We can even start exporting energy as a source of income for the nation.

Until we sort out these opportunities to better position our nation to be weaned off of electricity supply derived by fossil fuels, we shall always be under economic threat and will be stuck with one of the highest cost of energy in the Western Hemisphere at some US$0.32 per KWH. What is absolutely clear to me is that Guyana remains very energy insecure at this time and this has manifested itself as another reason why potential investors can be deterred from doing business with us. This is not a next-year issue; this a yesterday issue.
Whichever State agency is in charge of securing the IDB study and assembling this deal needs to start outlining the agenda of the new Government. The people need to know the broad game plan. This should not be another opportunity for more speeches and abstract statements but real concrete milestones and commitments. We cannot have a situation of bureaucratic sclerosis on this national project – not this time. This is our third time at this (Upper Mazaruni and Amaila being the previous attempts). This time we must be successful.
CONCLUSION

Our people have always dreamed about lower-cost energy options. Too many poor people are spending too much of their earnings on light bills. The poorest 20% of Jamaicans spend 12% of their incomes on light bills; in the United States it is 8%; in Guyana it is 22%. So the evidence is clear, we cannot continue on this energy path. It is time to bring true meaning to the “land of many waters” and let that water work for the people.

Next time I shall be continuing this conversation on the question of where are the prices going for the commodities that Guyana trades.

All the indicators arrive at the conclusion that developing our hydropower potential merits immediate support; it is a no-brainer.

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Former Member

Sources:

http://www.saseharishsingh.com/?p=112

8/25/154:48 PM

Former Member

Where in Washington is sase? Maybe he should join me for a beer on the waterfront of come and join us in off road biking ( and restaurant hopping) on weekends

8/25/156:51 PM

Former Member

HINDS'SIGHT:

President Granger

has corrected a historical wrong

by naming Clive Thomas

as his adviser--David Hinds

August 18, 2015

david hinds, guyana chronicle

WHEN President Granger appointed

Professor Clive Thomas as his Economic Adviser,

many in the academic and policy worlds

expressed their appreciation.

Professor Thomas earned that appointment

by the sheer weight of his accomplishments.

He has distinguished himself

as an economist,

academic,

intellectual,

political activist

and thinker

and trade unionist.

Earlier this year,

he retired as an academic at the University of Guyana

after 50 years of outstanding service to that institution

and others around the world.

As a member of the Government,

the people of Guyana

have one of their most accomplished sons

at their disposal.

Professor Thomas belongs to what I call

the radical generation of the Caribbean.

This generation includes our own

Walter Rodney,

Andaiye,

Maurice Odle,

Bonita Harris,

and Rupert Roopnaraine

among others.

Further afield in the Caribbean there were

Lloyd Best,

Tim Hector,

Phyllis Coard,

George Odlum,

Maurice Bishop,

and Trevor Monroe.

Theirs was the first independence generation;

the first sons and daughters

of our Guyanese and Caribbean Independence.

Many of them, like Clive Thomas,

came from the working classes,

bringing with them

an inherent quest for social justice.

It is not surprising

that after they were done with their studies,

they immediately put

their thoughts and energies

to the service of the nation.

This would bring them into conflict

with both the outgoing colonisers and their allies,

and with the indigenous post-independence leaders.

Clive Thomas’ generation

was asking serious questions

about the nature of our new independence;

they invariably were challenging

the post-independence order

that was being fashioned

by their political fathers,

the Burnhams and Birds and Gairys.

It is this conflict

between our independence fathers and their children

that would characterise what calypsonian,

Brother Valentino called the “Roaring 70s”.

Here in Guyana,

that engagement would be reflected

in the clash

between the WPA and the PNC Government of the day,

led by Forbes Burnham.

I continue to argue

that that clash arose out of

the very historical development

of our Caribbean civilisation.

Our younger scholars

must study that defining moment

in our Caribbean Journey.

It was more than Burnham versus Rodney.

Clive Thomas was a leader of the WPA.

As the leader of the Ratoon group at the University,

he, along with Eusi Kwayana of the

African Society for Cultural Relations

with Independent Africa (ASCRIA),

and Moses Bhagwan

of the Indian People’s Revolutionary Associates (IPRA),

were the founding leaders.

Rodney, Roopnaraine, Andaiye

and others would join later.

If Kwayana was the sage

and Rodney was the ultimate public revolutionary,

Thomas was the theoretician.

I remember, as a boy in Buxton,

wondering why we the youth were eager to hear Rodney,

while the older farmers listened intently to Thomas.

I later realised that

he was talking

sugar economics and labour relations and land issues,

which were central to the lives of the farmers.

Not that the others

did not deal with these issues,

but Thomas was the expert.

Throughout the contentious politics

of the 1970s and 1980s,

Thomas remained a scholar of the highest quality.

This is a distinction he shares with Rodney and Kwayana.

Their political activism did not interfere

with their intellectual productivity.

It is an attribute that most do not possess.

As was the case with most of his comrades,

Thomas has been a Marxist.

But his Marxism was never of the dogmatic mould.

He, for example, never dismissed western democratic

norms such as free and fair elections as non-revolutionary.

He got into trouble with fellow Marxists for this,

including the Grenadian Revolutionaries.

His answer was simple:

Working people died for those rights.

When the Grenadian Revolution died

and Caribbean Revolution

was pushed unto the back foot

and most revolutionaries ran for cover,

Clive Thomas remained constant.

As the WPA of the 1970s and 1980s

lost its political vigour in a post-PNC regime,

Clive Thomas never lost hope.

He continues to function in the now miniaturised WPA.

His last herculean effort

was to lead the WPA truce with the PNC,

which gave rise to the APNU,

which, in turn, mothered the now ruling Coalition.

It was no easy task.

It could not be easy;

these were political adversaries

trying to form a joint movement.

I worked closely with Clive

and others during this process.

Often when the going got tough

and some of us in the WPA

felt the process was stalling,

Clive Thomas was a settling influence.

It was his moral leadership

and influence that often was the clincher.

We respected Clive and his political judgement;

he has a superior understanding

of the political DNA of our partners

that many of us lack.

He passionately believed that

Guyana could be saved by partnership politics,

and that the PPP would be uprooted by a partnership.

I am glad we listened.

In naming Clive Thomas as his adviser,

President Granger has corrected a historical wrong.

While Thomas’s colleagues

have always been engaged by their governments,

he was the odd man out.

Successive governments have failed to utilise his expertise.

Except for a small engagement

with the early PNC Government,

he was persona non grata.

The PPP, with which the WPA were allies,

never engaged Thomas.

Now Granger

has corrected that wrong.

8/25/157:13 PM

Former Member

Up to now no one from the Government talking about how they shall replace them gas guzzlers at GPL.

They not acting on this matter and then the appoint Sam Hind Cousin as the GM, ONE BIG DUNCE.

8/26/1510:30 AM

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EXPENSIVE & UNRELIABLE ENERGY – one of the main hindrances to Guyana’s economic success

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