The energy sector

It is known globally that Guyana has moved exponentially upwards in the area of economic prosperity, and with good governance of its economy, the country is one of the fastest growing when compared to developing countries globally.

The economic indicators are visible, as the new administration has wasted no time in creating the dynamics that are required for pushing social and economic growth. Guyana, in the past, did not conceive the idea for the formation of a ministry of Natural Resources and the Environment, and the question is – should it have considered this ministry? Well this is certainly an important and serious consideration since the new administration did create the new ministry.

The administration will, of course, be leveraging on Dr Bharrat Jagdeo’s institutional strength and capacity, since the former president’s expertise as an economist and a climate change specialist has garnered excellent ratings in macro-economic governance, which will be an invaluable resource asset for His Excellency President Donald Ramotar’s administration in order to aggressively continue the challenge on a defined baseline with targets for moving the energy sector forward.

A coherent and integrated energy policy is vital to Guyana’s economic future and must be featured prominently in its national energy strategy particularly with those related to development of offshore oil and gas resources and other forms of renewable energies that are under consideration by the PPP/C administration.

Through the world renowned LCDS, Dr Jagdeo is knowledgeable of the real concerns about the positive impact of hydropower dams upstream on the Amaila Falls and the devastating impact climate change can have on the sensitive ecology of the region, so, this is one of the best solutions that are being pushed by the current PPP/ C government and it must be supported across the divides.

Guyana has oil, gas and other natural resources, but will require policies to address maximising the benefit of using these locally as opposed to exporting them; while there will be added economic gains from exports, this will all have to be examined using a streamlined organisation with regulatory and policing functions.

Renewable energy sources are available and of great interest – in fact General Electric manufactures wind turbines in many developed and emerging economies globally – but these green sources of energy are relatively expensive. How should they be integrated into Guyana’s power generation plans? This question is currently being resolved by the administration with an intelligent start of co-generation, GuySuCo model for exporting power into the national grid is a reality. When it comes to clean and efficient energy sources, nuclear is an attractive option, but Guyana is not poised in this direction in the nearer to long term in its energy plans but the safety wake-up call from Japan most recently, has rightly alerted that government and citizens focus on ensuring that a world-class regulatory system is developed before nuclear plants are built.

Guyana will also benefit from having the ministry take up the role of the energy regulator and remove other structural and institutional conflicts, allowing the country to accelerate its work to become a world class national oil economy. While it is a known fact that the government has done relatively well in terms of attracting new foreign investments, energy management must be strategised into the pool of innovative thinking for outfitting the power sector with multitudes of generation options.

However, the mid to long term prospect for power has become a concern for the current administration resulting in the government pumping money into renewable sources of energy and Guyana will continue with this investment roadmap. To encourage needed investment in new power capacity, the government will have to continue with the full examination of pricing policies and institutionalise power purchase agreements and sophisticated private-public partnerships in the energy markets locally.

This function must be executed by the Ministry of Natural Resources and Environment. This ministry will also now have to focus on energy policy making as this will send a strong signal to local and foreign investors that will prove beneficial through effective governance in a core sector for the country’s growth and competitiveness.

This is the right time to intensify the efforts into the newly created ministry so that with clear and sound energy needs the ministry will move to coordinate policies within the interagency process in Guyana, working with the Ministry of Finance, Guyana Office for Investment and international funding agencies and with the integration of functions of the Guyana Energy Agency, this will be the focal point for policy making and implementation for moving the energy sector aggressively forward.