Hydro project closer to reality – Guyanese to benefit from lower electricity tariffs

Guyanese can expect a decrease in the overall tariff that they have to pay for electricity while enjoying an improved level of service from the Guyana Power and Light (GPL) Inc once the Amaila Falls Hydro Power Project comes on stream in 2017. This is according the company’s chairman Winston Brassington who said that the project financing is in its final stages of approval.

Brassington also serves as the technical team leader on the project, which promises to supply Guyanese with an improved supply of electricity with the use of clean energy generated from a renewable resource.
Brassington said the project would result in GPL saving significantly as he pointed out that currently it costs the company between 18 and 20 U. S. cents per kilowatt hour to generate electricity using heavy fuel oil, and 30 U. S. cents with the use of diesel.
Hydro power
He explained that with the advent of hydropower, this cost would be reduced significantly which would see consumers benefiting from lower electricity bills while confirming that GPL would no longer need operating subsidies from the central government.
Brassington explained further that currently the real cost inclusive of generation, losses, selling and distribution stood at approximately 40 U. S. cents per kWh.
However, tariffs paid by customers are only 30 U. S. cents per kWh. “So our selling price today is subsidised. Last year, GPL lost about Gy$ 7 billion; we received Gy$ 6 billion in a subsidy from the government. This project will allow us to remove the subsidy and additionally will allow us to lower our tariffs to consumers,” Brassington emphasised.
Inclusive discussions
“We really need this project,” he continued, stating that all the parties have been involved in far reaching analysis of the risks associated with every level of the project implementation as this was critical to the overall execution of the project and its success.
“It is set up in such a way that each party carries a certain amount of risk,” he noted, explaining further that even government and one of the private owners will have to share the geotechnical risk associated with the project.
After the project is built, the other risk is the water risk which could arise if there is not enough water to keep the hydro project functioning at maximum capacity. Two technical studies have already been done on this issue. “Based on the results of those studies, we have been able to get a thousand gigawatt hours (gWh) per annum,” Brassington disclosed.
“In a project like this, there are a lot of risks from beginning to end,” he asserted during the interview. Some are insurable and some are not.
Lenders, particularly the Inter-American Development Bank (IDB), have also had extensive due diligence.
He did not rule out too that there may be a need to generate electricity with the use of fossil fuels even when the hydro project comes on stream, as he explained that as demand grows, there may need to have more power generated from other sources.
Electricity transmission
The GPL board chairman explained that the project would see some 165 mega watts of electricity installed at the generation point which would then be transmitted to Linden and Sophia.
Brassington also gave the overall cost of the project straight to the point when it enters into commercial operations at approximately US$ 840 million. It would also see Guyana paying over a 20-year period, an average of US$ 100 million per annum, following which the country will own the project outright.
This would result in saving of US$ 200 million, which would have gone to pay escalating and fluctuating fuel bills. So in rough terms, we will pay approximately US$ 100 million per annum to save some US$ 200 million in fuel for over 1000gWh per annum from the hydro project.
Brassington reiterated that the project’s scope includes the access roads, the hydro project itself, and some 270 kilometres of transmission lines from the hydro plant to Sophia and Linden.