To achieve lower energy costs, gov’t would have to revamp power sector, boost regulator
In your September 1, 2020 edition of Stabroek News you carried an article captioned ‘Ali promises private sector 60% cut in energy costs over three years’.
A 60% reduction in electricity rates would mean a reduction of the current rate from approximately G$50.00 to G$20.00 or from US$0.25 to US$0.10. This could be possible in three years if the Guyana Government can land the pipeline and negotiate a very competitive price for the gas in that timeframe. In my view the gas should be free to the Guyanese people since ExxonMobil is currently flaring it and contaminating the environment in the process. It should be also noted that the current electricity rate in Trinidad and Tobago is US$0.05 and they are using natural gas exclusively for Power Generation.
One of the major roadblocks to this plan would be the inefficiencies of the Guyana Power and Light (GPL). The current electricity losses in GPL is 30% and that is being passed on to the consumer. Even with the current poor state of GPL’s transmission and distribution network, the technical losses should not exceed 10%. Paradoxically, GPL recently put out an EOI for 25 MW of emergency power which represents 20% of their peak generation.
The solution to reducing the inefficiencies at GPL would require a System Approach to Management and the political will of the Guyana Government. In 1999, the then PPP Government privatized the Guyana Electricity Corporation. That strategy did not solve the electricity supply problem and in 2003 they reverted the Guyana Power and Light to public mownership. If President Ali’s vision is to succeed, the Government would need a new strategy to restructure the power sector including GPL and strengthen the utility regulator (PUC).
One of the major issues in Guyana has always been the dependency on foreign consultants to solve our problems. GPL spent US$7.5M in the last 4 years on foreign consultants for management training but they still do not have a solution on how to reduce the losses. This ,belief that only foreigners can solve our problems can best be understood by reading Luke 4.24.
Yours faithfully, Tara Singh