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Delaying the Amaila Project Will Stunt the Nation’s Development

Allow me as Minister Responsible for Energy and Electricity for some two decades to respond to some of what Mr. David Granger is reported to have said in the article in SN of 2015-03-18, entitled, “Granger promises alternative energy boost to growing manufacturing sector — signals retooled Amaila Hydro-project”.

 

The Government has been keenly pursuing alternative energy possibilities for our country. One has to seek to match output, market (inclusive of ability and willingness to pay) and costs.

 

Thanks to the work of the International Agencies in the 70s and 80s there have been studies available to different degrees of detail of 67 hydro sites that could be of economic interest. Many are small, of a fraction to 10 MW, could not carry a transmission line to the coast and need a local market. A few are in the 50 to 150 MW size that might be considered practical possibilities to supply our coast. A few other larger sites, particularly the Potaro and Mazaruni basins when fully developed would be producing much more electricity, than our GPL would need, about 1500 to 4000 MW respectively.

 

Let me now address more specifically Mr. David Granger’s statements on Moco-Moco and Tumatumari. 

 

This Government (on the basis of earlier work) pursued a small hydropower project with the Government of China and about 1995 approved the hydro development at Moco-Moco, including a small network for Lethem which was then still dependent on fuel (and everything else) being flown in from Georgetown, or coming by road from Venezuela and Brazil.

 

On beginning the operation of the Moco-Moco Hydro plant in 1999, it was natural to move from “lights at night” to a 24×7 electric supply. Lethem Power Co Inc was born but Moco-Moco was disrupted by a landside in 2003. A team from China was quickly brought to review the situation and make recommendations.

 

The views of experienced local and other persons were also sought. They all roughly concurred on the following options:

Option 1:

 

Replace damaged sections and relay penstock as it was with minimal correction to the sliding of the land. Budget about G$50 to 70 million but the likelihood of repeated sliding would be minimally reduced — you would have to live with that likelihood and would insert enough flexible and rupture joints to minimize damage and quicken repair.

Option 2:

 

Replace damaged sections and relay penstock as it was, but now with significant amount of geo-engineering of the sliding area thus reducing but not eliminating the likelihood of subsequent slides. Budget about G$100 million to G$200 million.

 

Option 3:

 

Essentially a total rebuild of the project with the penstock routed along another face of the mountain and a new power station built. Budget about G$500 to $700 million.

 

This was definitely not as Mr. Granger stated a case of some “genius” deciding that we couldn’t afford G$70 M to realign the tube. Rather, we did not accept Option1, with the chance that the land could slide again in subsequent rainy seasons, as there have since been. One could imagine the PNC opposition then querying, which “genius” wasted some G$70 million of public money, just putting the penstock back in place and having it broken again in a subsequent slide.

 

I could assure you that we pondered the three options and have been pursuing opportunities with interested Brazilian companies (typically small and not very well known) for the redevelopment of Moco-Moco. I may add that it is easily said that a Brazilian investor would come but risks have to be mitigated and returns have to be sufficiently rewarding.

 

Allow me to disclose (I would normally have considered now too early) that noticing the calls from IRENA (International Renewable Energy Association) for Renewable Energy Projects which they may consider for funding (half the amount at concessional rates) we proposed last year, a Rupununi Electricity Company based on developing Wamakaru falls, about 3-4MW, redeveloping Moco-Moco, judicious quantities of Wind and Solar at various villages, with back-up HFO at Lethem (2×2 MW); and with a main transmission backbone linking Lethem, Annai, Sante-Fe Farm, Karasabai, (and as soon as we can, Aishalton).

 

As presently envisaged this would be a public — private – partnership of about US$20 million with the Government guaranteeing the US$10 million loan from IRENA (if we win the allocation). Last year we got over the first hurdles but the concessionary rate was not concessionary enough for the Government to guarantee the loan. This year we are being offered a lower rate sufficient to attract the Government guarantee.

 

It is projected that if we win the IRENA financing, electricity would be generated and transmitted to the centre of villages across the Rupununi at an average, blended all-in cost of less than G$40 per kWh. And this could happen in four years if we win an IRENA allocation. If not we would keep looking for a way to get it done but prices would be significantly higher with a purely commercial venture.

 

With respect to Tumatumari, Dynamic Engineering applied for and was granted a licence to redevelop Tumatumari. The early business plan focused on producing wood and stone products in the area. The startup mini-electricity Utility at Mandia was then pursued. We could offer only what the demand and readiness to pay of that market would be — no one could offer guaranteed quantities. That market seems not to have been enough to satisfy the financiers. With the knowledge of the Karouni gold mine coming on stream in the Kaburi area, the Government encouraged both Dynamic Engineering and Troy Resources to get together on obtaining power from Tumatumari. My latest update from both parties is that there is a great likelihood that a deal of mutual benefit would be concluded and implemented.

 

Mr. Granger speaks of a “retooled Amaila” Hydro in a Potaro Development Authority. A Potaro Development Authority would probably entail a water diversion canal from the head of the Mazaruni to raise generation at Amaila to about 1000 MW, (Mr. Fip Motilall has been urging that to me); possibly, a development around the Kaieteur as per a Japanese proposal of the 1980s, say 500 MW; and with steadier flow year round at Tumatumari, an upgrade to say 60 MW. The question would be what to do with the additional power. Unless there are fairly developed plans to utilize the additional power the Potaro Development Authority would be no advance on, and be nothing else than our Amaila plan, which we pleaded unsuccessfully with the opposition to approve.
As we have made public, we have been pursuing Brazilian interest in obtaining power from Guyana.

 

As previously disclosed, the Government has been:

 

(1) participating in the IDB sponsored Northern Arc Project, a proposed
linking of electricity transmission systems from Roraima state in Brazil through Guyana, Suriname, French Guiana to Ampa state in North Eastern Brazil.

 

(ii) pursuing a Brazilian interest in purchasing power from a developed

 

Mazaruni River. However there would be a completely different design, more or less a run-of-river design to minimize the impact on the Amerindian villages along the river. There would be a head (power) loss of about 10% and the loss of the averaging effect on year round flow provided by the huge storage in the 1973 design, any significant impact on the villages would be avoided.

 

It was widely reported that we toured the Amerindian villages of Upper Mazaruni and met with the Region 7 RDC and NDC, Bartica, holding discussions on planned Pre-feasibility and Feasibility Studies and seeking to assure everyone that the villages would not be ordered to move out and relocate as in 1973.

 

The Government has been engaged with the Government of Brazil in studies of an appropriate treaty for sale of electricity to Brazil. The “run of river” design is now possible because the Brazil grid could easily manage the variations from say 800 MW to 4500MW over a year. The proposed 1973 sale of electricity to a number of aluminium smelters in Guyana would have required a much steadier level of generation throughout the year, hence the huge storage and flooding in that design.

 

With respect to solar (photovoltaics, PV), the Government has installed about 14000, 65 watt PV systems on most homes in the hinterland away from the GPL and other networks and is currently rolling out an additional 6000 systems. With respect to PV for utilities, the Government has been pursuing offers to provide demonstration 1 to 3 MW PV farms to be tied into the GPL network but none has materialized so far.

 

With respect to wind, recall from some years ago the ‘synthesized’ pictures in the newspapers showing wind farms of about 25 MW along the Georgetown seawall and along Hope Beach.

 

 

Ten years ago, wind and solar could only beat out petroleum based generation in special circumstances (or with hidden or open subsidies) but prices have been falling rapidly and design and performance have been improving rapidly, so much so that a year ago with crude oil prices at $100/bbl, many were saying that solar and wind were “breaking even” with petroleum products.

 

It is easy to say as Mr. Granger is reported to have said that “we have wind, we have wave power and we have solar power” — the challenge is in putting together developments that pay their way: and should the Government lead? assuming the initial risks? It is easy to shout lack of transparency, but at what point in a negotiation that might take a year or two to close, and not knowing whether it would close, at what point does one go public with details any more than we have been disclosing? How much time is the average person in the public ready to give to being kept up to date on things which may not get anywhere?

 

The Government maintains that in the area of “lowest possible, reliable and sustainable electricity costs” and moving on from petroleum based energy sources to renewable energy sources, it has not been lagging. The blocking of Amaila when proposed by this Government, a possible 100% conversion in the source of GPL’s electricity generation from petroleum to a renewable, makes Mr. Granger’s promises opportunistic. If we are to talk about stunting the growth of our economy and of us Guyanese, and of keeping us poor, there is little that can match the delaying of Amaila.

Samuel A. Hinds, O.E., M.P. Prime

 

Source: http://www.kaieteurnewsonline.com/2015/03/22/delaying-the-amaila-project-will-stunt-the-nations-development/



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