The urgency of hydroelectricity

The urgency of hydroelectricity
Guyana Chronicle Editorial, 24 January 2008
SPIRALLING fuel prices have triggered the search for alternative and
renewable energy sources globally, and indications are that this trend
will continue for a long time because the demand for fossil fuel has
shot-up dramatically with emerging industrial giants such as India and
China and a few others.

Developing countries, particularly those without oil resources, have
been hit hard as increased fuel prices have triggered a steep increase
in the cost of living, bringing severe hardship on the poorer classes.

In this context, the recent announcement by Synergy Holdings Inc that
it is in its final stages of bid documents preparation in relation to
the development of the Amaila Falls Hydroelectricity Project is very
encouraging.

It is unfortunate that the previous management of GPL, when it was a
private company, procrastinated on arriving at a power purchase
agreement because at that time, the price of oil was US$20 per barrel.
Such short-sightedness has resulted in Guyana being in its present
predicament. Of course, eventually, the intrigues of that management
fostering its own agenda were exposed and it had to go.

However, the Amaila Falls project is not the first attempt at bringing
hydroelectricity to Guyana on a major scale.

The PPP government of the 1957-1964 had concluded a deal with the Cuban
government to harness the Tiger Hill Falls in the Demerara River at a
cost then of $32M, which the Cubans would have provided. When the PPP
left office in 1964, the blueprint for the project was there. Yet, some
unfortunately criticised the PPP for a lack of vision.

Unfortunately, the new government did not pursue that course and the
project died a natural death.

Perhaps, if that project had been pursued, Guyana would not have been
in the present difficult situation because of its heavy dependence on
fossil fuel which eats about 60% of our GDP.

Nevertheless, the same government went on an over ambitious
hydro-project, the Upper Mazaruni Hydroelectricity project, which
became a dismal failure and a total waste of money.

In fact, during this period the TUC had called for a minimum wage of
$14 per day but the then Prime Minister lashed back with: “Do you want
hydro or $14?” The rest is history as neither became a reality.

All of that is past and the current realities have to be dealt with
expeditiously, because Guyana has to grapple with the problem of
obtaining a cheap, clean and a reliable source of electricity which has
been a major irritant for a long time.

CEO of Synergy Holdings, Mr. Fip Motilall, on his most recent visit
here last week, sounded very optimistic and all Guyanese are hoping
that this optimism will translate into reality in the shortest period
of time.

According to Motilall, the project is of national importance with a
life span that will exceed 100 years if designed properly and quality
construction materials are used.

“It is currently being offered to Guyana as a 20-year BOOT
(Build-Own-Operate-Transfer) meaning that it will be given to Guyana in
20 years, free and clear. The cost of hydro-power is mainly the cost to
build it and pay off the loans because hydro-power costs less than
half-cent/kwh to produce. This is a price that will remain fixed once
the loans are paid off and Guyana will enjoy this cost of reliable
power the next 80+ years after the loans are repaid. In addition, AFHEP
is expandable to 10 times its size in phases (to over 1,000 MW) so it
will meet the need for power in Guyana long into the future,” Motilall
explained.

He added: “So rather than complain, let’s agree that this is a project
that offers huge economic benefits for a long time to come, allow the
engineers and financial groups time to work on the specifications and
to ensure the best price and terms for the project. We need to all work
together to get this project on-line. The project schedule has
construction starting this year and delivering power to GPL in December
2011.”

He is certainly right. It is, indeed, a project that offers huge
economic benefits because in an increasing competitive global market,
our manufacturers need a cheap and reliable supply of electricity to be
able to maintain a competitive edge.