Dear Editor,
I really appreciate the time taken by former Prime Minister Samuel Hinds to answer questions I had asked in a previously published letter in regard to the Amaila Falls Hydro Project. Mr Hinds’s response was published in the Stabroek News letters column on July 29. In his response, he provided some detailed information to support his answers, however, these still lacked some fundamental details necessary to determine even at a “65,000 feet level” if the Amaila Falls project is feasible.
Mr Hinds indicated that more studies could be made available, but questioned whether persons requesting the additional studies would have the time and background to properly review the study. I would like to assure Mr Hinds that I am prepared to give up some sleep in order to have sufficient time to evaluate any studies he could provide. I would also like to assure him that I possess the necessary background to review the studies. I am a senior engineer with the New York State Department of Public Service (DPS) where we regulate approximately US$29 billion per year in electric commerce. My job entails, among other things, reviewing capital projects such as the Amaila Falls Hydro Project to determine their need, cost and timing. The DPS looks after the interest of the ratepayers of New York State.
Even in the USA, a project the size of Amaila would be considered a massive project and would most certainly be evaluated in a dedicated administrative proceeding where parties would be allowed to intervene to examine the developer’s filing. The developer’s filing could be over 1,000 pages thick filled will all level of details including engineering, economic and environmental impacts.
These proceedings take the form of a court case where testimonies are filed and parties are cross-examined. The final outcome is usually decided by the regulatory commission.
Given this level of scrutiny in the USA, it is scary to think that a US$858 million project can be decided on ‘back of the envelope’ calculations in Guyana. The people of Guyana must call for in-depth scrutiny of such massive projects. Moreover, the country cannot and should not be railroaded by the IDB to commit to the Amaila Falls project without a thorough feasibility study.
Mr Hinds stated in his response that “we projected that there would be enough demand to justify its [Amaila Falls] construction.” Mr Hinds should provide the details behind this projection because this cannot be taken lightly. It might be difficult for the average reader to comprehend, but in 2012 GPL peak demand (highest usage in one hour of the year) was about 110 MW and the average demand (average usage over all hours of the year) was 80 MW. For Amaila to be feasible (without cost overruns) the average demand would have to be about 127MW; that is, the usage in each hour of the year would have to be greater than the peak demand in 2012. Can self-generators including Bosai and the Linden area make up this difference by taking service from the Amaila project? Mr Hinds should provide the details.
The other big question is about the US 11 cents/kWh charge. Mr Hinds claims that the US 11 cents per kWh is the total charge inclusive of capital, operating and maintenance charges for the total hydropower plant and transmission line. He further claims that after 11 years the charge would be about US 7 cents per kWh and after twenty to thirty years it would be US 3 cents per kWh. I would recommend that if the contract could be written in this exact language then the government should proceed with the project since these charges are significantly less than current production costs. However, I am willing to bet my bottom dollar that the way the
contract would be written is to guarantee the developer a fixed payment stream such as US$122 million for the first 11 years and the US 11 cents per kWh charge would be based on some assumed usage which might not bear out in reality. The end result would be that GPL or government would have to fork out the difference between the fixed payments and the amount collected in rates.
There is also the issue of having a continuous year round flow at Amaila to ensure continuous generation. Mr Hinds contends that the plant is expected to generate electricity year round. However, Sithe Global’s August 2013 presentation states that the reservoir is sized for 23 days full load operation during the dry season. It is during the dry/hot season that demand would be at its maximum because of air conditioner load. To maintain a generation fleet to provide full supply in the event Amaila cannot produce power would be very costly and has to be taken into account in any analysis.
Editor, the bottom line is that the interest of the people must be paramount. If the Amaila Falls project is not feasible currently, then maybe we can wait for the ‘Northern Arc’ project which Mr Hinds describes as interconnecting points in northern Brazil, Guyana, Suriname and French Guiana to be finalized. With this project secure, then it might be more feasible to build Amaila to its full potential of 1,100 MW as Mr Hinds noted.
Yours faithfully,
Vijay Puran P.E.
