Guyana's declining energy sector
Guyana's energy sector is characterized by a heavy reliance on oil and diesel, with daily consumption reaching approximately 391,000 barrels as of 2023. Despite serving around 92% of its population, the country's electricity infrastructure is aging and often inadequate, leading to frequent and prolonged outages that compel many businesses to invest in their own generators. This self-generation contributes to economic inefficiencies and diminishes competitiveness. The sector is primarily managed by three key entities: the Office of the Prime Minister, the Guyana Energy Agency, and the Public Utilities Commission, with Guyana Power and Light (GPL) playing a dominant role in electricity production and distribution.
While there are some independent power producers (IPPs) contributing to the grid, challenges such as high theft rates, inadequate investment, and concerns about corruption hinder further development. Efforts to enhance the energy landscape include investments in renewable resources, such as hydropower, solar, and bagasse cogeneration, indicating potential avenues for growth. The government is actively pursuing initiatives to improve reliability, increase access, and reduce costs, but significant infrastructure upgrades and investments in renewable technologies will be necessary to realize these goals and support economic growth in the region.
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Guyana's declining energy sector
Official Name: Co-operative Republic of Guyana.
Summary: Guyana’s energy sector is dominated by oil and diesel and faces such problems as an aging infrastructure and transmission issues, high rates of theft, and failure to attract investments.
Guyana’s energy sector is dominated by heavy fuel oil and diesel, with about 391,000 barrels of oil consumed per day as of 2023. The nation's electricity capacity, according to 2022, estimates was 385,000 kilowatts, while consumption was reported at approximately more than 904 million kilowatt-hours.
Electricity infrastructure is aging and inadequate. About 92 percent of the population are served with electricity. Most of the energy supply is in coastal towns, where there is a high concentration of industry. With reliability low and outages frequent and long, most companies (whether large, medium, or small) own their own generators. While self-generation can reduce the load on the system, this places a substantial burden on companies, reducing competitiveness, diverting revenues to power generation, and leading to economic inefficiencies. The high use of diesel engine generators is also due to a reluctance to rely on imported oil.
Guyana’s energy sector involves three main players: the Office of the Prime Minister, the Guyana Energy Agency, and the Public Utilities Commission. The Office of the Prime Minister has the policy-making and regulatory responsibility for the energy sector, such as granting licenses and approving development and expansion plans. The Guyana Energy Agency (GEA) (previously the Guyana National Energy Authority) was appointed by the minister in 1998 and charged with responsibility for all energy-related matters. GEA is also responsible for increasing access to electricity in indigenous areas of the country through the Unserved Areas Electrification Program. The Public Utilities Commission is a multisector independent regulatory agency that is responsible for setting electricity rates, establishing regulations, and resolving disputes between providers.
Electricity production is dominated by Guyana Power and Light (GPL), which is an integrated government-owned utility. GPL has a monopoly on transmission and distribution and a 55 percent stake in generation. GPL was originally owned by the government of Guyana, under the name Guyana Electricity Corporation. A 50–50 partnership between the government and the Commonwealth Development Corporation (of the United Kingdom) and Electricity Supply Board International (of Ireland) was established in 1999. The partnership dissolved after four years, and sole ownership of GPL was returned to the government of Guyana.
In addition to Guyana Power and Light, there are independent power producers (IPPs), which are corporations that generate power for their own needs, but sell the excess back to the national grid. IPPs include GPL, Omai Gold Mines Limited, Guyana Sugar Corporation, Linden Power Company , Berbice Mining Enterprise , and Aroaima Mining Company. Numerous efforts are under way to develop the relationship between GPL and the IPPs through cogeneration projects, power purchase agreements, and investments in renewables.
The Inter-American Development Bank (IDB) has provided financial and technical support for several projects in the electricity sector: the Unserved Areas Electrification Program, aimed at increasing energy development and extension to unserved consumers; the Power Sector Support Program, for the development of the power sector through reduced electricity loss, strengthening of the regulatory framework, and building social awareness to achieve sustainable solutions; and Expanding Bioenergy Opportunities, to increase capacity within the government for bioenergy technology and research.
There is concern that corruption and bribes as well as high rates of crime and violence may prevent future investment in the country’s energy sector. However, the ability to provide reliable electricity is essential for economic growth. Guyana’s deficiencies in infrastructure place a huge constraint on the country, and there is a strong need to improve reliability of the supply, increase access, and reduce costs. Investments and institutional enhancements can support increased efficiencies.
The renewable energy sector shows great opportunity for growth, and the government aims to reduce fossil fuel consumption. Hydropower capacity in Guyana was estimated to be 7,600 megawatts, but a significant investment in facilities and transmission would be needed to develop that capacity, as the facility would be inland, whereas the demand would come from the coast. Construction of a hydropower plant was proposed in 2014 at Amaila Falls, with the plant scheduled to be commissioned in 2025. When operational, the plant was expected to generate 1,047 gigawatt hours of electricity.
Another opportunity is bagasse (sugarcane fiber), given that Guyana has ideal climate conditions for growing sugarcane. A bagasse cogeneration project was implemented in 2006 by the Guyana Sugar Corporation (Guysuco), and there is a proposal for expansion. Solar energy is being used primarily to supply electricity in rural and remote areas of the country through the Unserved Areas Electrification Program. A number of homes have received solar photovoltaic systems, and expansion is expected if investment continues.
In 2007, the government of Guyana and the Dutch company DELTA Caribbean N.V. began construction of a 13.5-megawatt wind farm at Hope Beach, which was completed in 2010. Other areas of the coast have been studied for wind development, but no additional projects have been pursued.
Bibliography
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"Guyana." US Energy Information Administration, 24 May 2024, www.eia.gov/international/analysis/country/GUY. Accessed 2 Aug. 2024.
"Power Plant Profile: Amaila Falls, Guyana." Power Technology, 21 July 2024, www.power-technology.com/data-insights/power-plant-profile-amaila-falls-guyana/. Accessed 2 Aug. 2024.
Ritchie, Hannah, and Max Roser. "Guyana: Energy Country Profile." Our World in Data, 2024, ourworldindata.org/energy/country/guyana. Accessed 2 Aug. 2024.