We, who have been working for over a decade at realizing our national dream of harnessing one of our waterfalls to provide our electricity, welcome the questions on Amaila put by Mr Puran in his letter appearing in Stabroek News and the Chronicle on July 23.

We had no doubt that the questions put and answers sought by Mr Puran would have been on the minds of and would be informative to many of our fellow citizens, as we are all interested in and seek the development of our people and country.

Our PPP/C starting point in the late 1990s was the studies and appraisals undertaken by various aiding institutions, during the 1970s and early 1980s, of the potential of various hydropower sites (nearly 70 identified and studied to various degrees). Amaila provided one of the best fits to Guyana’s local needs.

Editor, this reply to Mr Puran was delayed as I struggled to not be left too far behind the late-teens and early twenty-years old in the foundation computer course in which I enrolled. I can and do now take the opportunity to respond also to the article in Stabroek News of July 28, ‘Government reviewing three Hydropower proposals -Patterson.’ Did anyone notice what the Minister was reported to have said – “that right now he did not wish to declare any information of the projects being reviewed” and “he did not even wish to disclose the proposed sites that were being looked at by the private proposals.” His revelation is remarkable when one recalls that the then opposition claimed that a major cause for their objection to Amaila was the lack of disclosure and transparency accompanied with innuendos of favouring friends. But as I said when I was being pestered by reporters to respond to PM Nagamootoo’s comments on the PM residence, “one has to live in the house to know where it leaks; and one has to wear the shoe to know where it pinches!”

Whatever the motivation for their objection we would have lost three to four years in embarking on a hydropower development to meet our needs.

In office or out of office the earliest realization of a significant, sustainable hydropower development remains a major objective of the PPP/C.

Now back to Mr Puran’s questions.

1. Yes: the estimate of US $858 million included all the required substations – there is a substation to deliver power to the Linden area.
2. We do not envisage now any other hydropower development along the transmission route; no doubt however, we can foresee that this transmission line would in time become part of an across Guyana and transnational electricity grid.
3. We projected that there would be enough demand to justify its construction. When Amaila becomes available GPL’s demand has risen from 690 to 750 GWh from 2012 to 2014. Overall development would be stimulated by the breaking of ground and the progress of construction of Amaila; and self generators including BOSAI and the Linden area would transfer to the grid. But no one knows what the future would be; at times we were criticized that Amaila was too big and at other times that it would not be enough.
4. The US 11 cents per kWh is the total charge inclusive of capital, operating and maintenance charges for the total hydropower plant and transmission line. However, there is no royalty charge included for the use of the waterfall so as lower prices to provide to consumers. One should be aware that from about year eleven to the year of transfer (twenty to thirty years) the total charge would be even lower, about US 7 cent per kWh; and after transfer, (at the end of all capitalization payments) the charges would be just about US 3 cents per kWh delivered to Sophia. Even with crude oil currently at US$50 per barrel, Amaila is still attractive.

   Minister Patterson stated that the proposed sites being considered now are a far cry from the US$858 million for Amaila. No doubt true, but the relevant criteria are the overall total unit construction cost (US$ per MW) including transmission to Sophia, and the lifetime average unit energy cost delivered at Sophia (US cent per kWh) Let us see how they will compare!

1. The plant is expected to generate electricity year round; the reservoir though on the small side, would provide enough ‘drawdown’ to operate for one to two months without any rainfall in the area.
2. Yes, it was recognized that GPL would have to maintain its diesel and other generating capacity to meet foreseen and unforeseen shortfalls in generation from Amaila. On this question one should be made aware that Guyana is participating in an IDB sponsored supported “Northern Arc” study of electricity links interconnecting points in northern Brazil, Guyana, Suriname and French Guiana, so that we could help each other in times of need.

Yes, it was way beyond me, but there have been studies of grid stability and the amount of local generation prudently needed.

The earlier studies referred to, recognised the possibility of delivering some of the headwaters of the Potaro and the Mazaruni to Amaila to raise generating capacity to about 1100 MW. This diversion has not been included at this time.

Yes, one could envisage an arrangement to guarantee year round flow and generation (increase the reservoir and reduce the rated and installed capacity) but it would be less economically attractive.

Can “all studies be made available?” I have been told that there are lots of studies available from the websites of various stakeholders and more could be made available. The question would be whether persons requesting the additional studies would have the time and background to properly review the study. I was satisfied with the information I reviewed.

Yours faithfully,

Samuel A A Hinds

Dear Editor,

I really appreciate the time taken by former Prime Minister Samuel Hinds to answer questions I had asked in a previously published letter in regard to the Amaila Falls Hydro Project. Mr Hinds’s response was published in the Stabroek News letters column on July 29. In his response, he provided some detailed information to support his answers, however, these still lacked some fundamental details necessary to determine even at a “65,000 feet level” if the Amaila Falls project is feasible.

Mr Hinds indicated that more studies could be made available, but questioned whether persons requesting the additional studies would have the time and background to properly review the study. I would like to assure Mr Hinds that I am prepared to give up some sleep in order to have sufficient time to evaluate any studies he could provide. I would also like to assure him that I possess the necessary background to review the studies. I am a senior engineer with the New York State Department of Public Service (DPS) where we regulate approximately US$29 billion per year in electric commerce. My job entails, among other things, reviewing capital projects such as the Amaila Falls Hydro Project to determine their need, cost and timing. The DPS looks after the interest of the ratepayers of New York State.

Even in the USA, a project the size of Amaila would be considered a massive project and would most certainly be evaluated in a dedicated administrative proceeding where parties would be allowed to intervene to examine the developer’s filing. The developer’s filing could be over 1,000 pages thick filled will all level of details including engineering, economic and environmental impacts.

These proceedings take the form of a court case where testimonies are filed and parties are cross-examined. The final outcome is usually decided by the regulatory commission.

Given this level of scrutiny in the USA, it is scary to think that a US$858 million project can be decided on ‘back of the envelope’ calculations in Guyana. The people of Guyana must call for in-depth scrutiny of such massive projects. Moreover, the country cannot and should not be railroaded by the IDB to commit to the Amaila Falls project without a thorough feasibility study.

Mr Hinds stated in his response that “we projected that there would be enough demand to justify its [Amaila Falls] construction.”   Mr Hinds should provide the details behind this projection because this cannot be taken lightly. It might be difficult for the average reader to comprehend, but in 2012 GPL peak demand (highest usage in one hour of the year) was about 110 MW and the average demand (average usage over all hours of the year) was 80 MW. For Amaila to be feasible (without cost overruns) the average demand would have to be about 127MW; that is, the usage in each hour of the year would have to be greater than the peak demand in 2012. Can self-generators including Bosai and the Linden area make up this difference by taking service from the Amaila project? Mr Hinds should provide the details.

The other big question is about the US 11 cents/kWh charge. Mr Hinds claims that the US 11 cents per kWh is the total charge inclusive of capital, operating and maintenance charges for the total hydropower plant and transmission line. He further claims that after 11 years the charge would be about US 7 cents per kWh and after twenty to thirty years it would be US 3 cents per kWh. I would recommend that if the contract could be written in this exact language then the government should proceed with the project since these charges are significantly less than current production costs. However, I am willing to bet my bottom dollar that the way the contract would be written is to guarantee the developer a fixed payment stream such as US$122 million for the first 11 years and the US 11 cents per kWh charge would be based on some assumed usage which might not bear out in reality. The end result would be that GPL or government would have to fork out the difference between the fixed payments and the amount collected in rates.

There is also the issue of having a continuous year round flow at Amaila to ensure continuous generation. Mr Hinds contends that the plant is expected to generate electricity year round. However, Sithe Global’s August 2013 presentation states that the reservoir is sized for 23 days full load operation during the dry season. It is during the dry/hot season that demand would be at its maximum because of air conditioner load. To maintain a generation fleet to provide full supply in the event Amaila cannot produce power would be very costly and has to be taken into account in any analysis.

Editor, the bottom line is that the interest of the people must be paramount. If the Amaila Falls project is not feasible currently, then maybe we can wait for the ‘Northern Arc’ project which Mr Hinds describes as interconnecting points in northern Brazil, Guyana, Suriname and French Guiana to be finalized. With this project secure, then it might be more feasible to build Amaila to its full potential of 1,100 MW as Mr Hinds noted.

Yours faithfully,
Vijay Puran P.E.