With the rate at which development is taking place, Guyana’s energy demand is expected to triple by 2026. And with this increase in energy demand, it will be necessary for Guyana to have large-scale projects capable of keeping up with this demand.
This is according to analyst at Americas Market Intelligence (AMI) and Africa Market Intelligence (AfMI), Arthur Deakin, who recently spoke at the International Energy Conference and Expo at the Marriott Hotel.
He explained that while the 300 MW gas-to-power project that would pipe gas from the Stabroek Block to the Wales Development Zone will satisfy a chunk of this demand, it will need help.
“That project will need to be complemented by solar panels in the hinterland, medium sized hydro projects such as Amaila and wind power coming off the Atlantic. This (energy) sector also includes opportunities related to the much-needed decentralisation of the grid, such as battery storage and the development of microgrids, two important tools in electrifying rural areas, preventing blackouts, and providing firm power to offset intermittency.”
“Guyana could also use its massive gas findings to produce blue hydrogen, which is the production of hydrogen using natural gas and carbon capture technology. This could be an extremely viable possibility if Guyana moves forward with creating an industrial hub connected to the infrastructure of the proposed gas-to-energy plant,” Deakin also told delegates.
He noted that while there are challenges, such as with the wind farm development, it is believed that renewable energy is the sector with the greatest opportunity relative to risk. According to him, the right subsidies and framework will also attract the right investors.
In fact, one of the news coming out of the conference and expo is that a Power Purchase Agreement (PPA) is being negotiated between the Guyana Power and Light (GPL) and Hope Energy Development (HED) Incorporated.
The project’s General Manager John Sydow had been optimistic that they could start construction this year, if all goes well with such negotiations. However, everything hinges on the PPA.
When it comes to Amaila Falls, project leader for the gas-to-shore project Winston Brassington had announced during the expo that the project has a possible lifespan of 75 to 100 years and a US$700 million price tag – a reduction from the US$1 billion estimated cost, at the time when Blackstone Group was the developer involved in the project.
“This project has a long life. This could be 75, or 100 years. So, we are in essence paying for this project over 20 years. And that average price per kilowatt hour, that we are paying based on the response to the RFP, is about 7.7 cents.”
“So, we’re not putting any money. The average price measured over 20 years, will be about 7.7 cents. And this cost is largely the repayment of financing. The financing to build this project will be about US$700 million. All of that is being provided by the sponsor. And when this project is built and handed over, the operating cost after 20 years will be 1 and a half cents.”
According to Brassington, Guyana would have therefore paid for a transformational project at a competitive price, after which the operational cost would be minimal. He also emphasised that the project’s scope is more than hydro.
“It’s 165 megawatts of hydro, but it also includes 270 kilometres, double circuit, 230 KV transmission lines coming all the way from Amaila to Sophia. Now, that’s over 500 kilometres of transmission lines and right now the entire transmission system of GPL is just over 200 kilometres.”
“So this is a significant transmission project. We will have two substations, one in Linden and one in Georgetown. So, we’re paying for the power delivered into our grid, into our central point in Georgetown.”
