Government has set aside close to $1 billion in the 2017 budget for renewable energy and energy efficiency projects, which will include a large-scale solar farm at Mabaruma, according to Finance Minister Winston Jordan, who also announced plans to grant a range of tax exemptions for clean energy and recycling ventures.
Jordan made the disclosure during his three-hour-long presentation on the proposed budget in the National Assembly, where he said government would design a Green State Development Plan as part of its effort to create a green economy.
According to the minister, the government has made a budgetary allocation of almost $1 billion to implement a series of renewable energy and energy efficiency projects, following the charge given by President David Granger for the public sector to lead the way in transitioning towards greater renewable energy use.
He said these interventions, to be channelled through and managed by the Guyana Energy Agency, will include the installation of the first solar farm, on a large scale, in Mabaruma, which has been budgeted at $264 million.
Jordan explained that when operational, the 400 kilowatt solar farm will afford an additional 17 hours of electricity to the 3,000 residents of Mabaruma. Furthermore, he said government has also advanced the pursuit of additional solar farms with a capacity of 800 kilowatts at Lethem, 400 kilowatts at Mahdia, and 1.5 megawatts at Bartica. “To complement public sector investment, the Government will be granting a one-off tax holiday of two years for corporation tax to importers of items for wind and solar energy investments, and for investors in water treatment, waste disposal, and recycling facilities,” he said, while adding that these interventions, when finalized, will significantly improve the lives of people, especially those in the hinterland, by incentivizing behavioural change, boosting investor confidence, and ensuring energy reliability.
Jordan also mentioned the planned installation of solar photovoltaic (PV) systems on the rooftops of 64 government buildings. He said with a combined installed capacity of 1.36 megawatts (MW), these installations will result in annual energy savings of 1.86 gigawatt hours (GWh) or 1,200 barrels of oil equivalent per year; annual cost savings of approximately $140 million; and environmental benefits in the form of avoided carbon dioxide emissions of about 1,116 tonnes per year.
According to Jordan, government’s energy efficiency programme will involve, also, the replacement of inefficient lights and the installation of 10,427 light-emitting diode (LED) lamps and 3,766 occupancy sensors in government buildings, as well as 360 energy efficient outdoor lights. This intervention, he told the House, will result in annual energy savings of 0.93 GWh or 600 barrels of oil equivalent, with an estimated annual cost savings of $54 million, and avoided carbon dioxide emissions of 558 tonnes per year.
“Mr Speaker, overall, the renewable energy and energy efficiency interventions in 2017 will result in annual energy savings of approximately 2.8 GWh or 1,800 barrels of oil equivalent per year and an annual cost saving of approximately $193 million, and avoided carbon dioxide emissions of 1,674 tonnes per year. The simple payback period would be approximately 5.2 years, based on the combined investment cost,” he said.
In 2017, Jordan added, government will also consider utilizing the balance of the current Japanese Non Project Grant Aid facility to the private sector to procure 5,000 energy efficient street lamps. This endeavour, he said, will result in the replacement of the existing inefficient 250 W street lights with 120 W LED street lamps, resulting in energy savings of about $158 million annually, with other benefits such as a reduction in power demand of about 0.7 MW and environmental benefits of about 2,000 tonnes carbon dioxide emissions per year avoided. Based on the annual energy savings, this investment in energy efficiency will have a simple payback of less than 2 years, he explained.
It was stated too that in the pursuit of best practice and due diligence, the government will conduct further geotechnical studies for the Moco Moco Hydropower Development Project. The results of the geotechnical studies, which are expected to be completed in 2017, will be used to invite bids for the hydropower re-development contract, he said, before adding that also in the coming year Guyana will see data collection studies being conducted on wind energy via a demonstration wind project.
Green agenda
Meanwhile, Jordan said that implied in the theme of the budget— “Building a Diversified, Green Economy: Delivering the Good Life to All Guyanese”—is an articulation of a green agenda, which spans social, environmental, and economic sustainability issues. The green agenda, the minister said, encompasses environmental protection, citizen security, employment and value chain creation, energy, health, education, social protection, and resilience against climate change and economic shocks. “It is about sustainable development, embracing a broad range of Sustainable Development Goals (SDGs) and aligning perfectly with multi-dimensional progress,” he said.
In recognition of government’s commitment to the SDGs and the Nationally Determined Contributions to the Paris Agreement on Climate Change, Jordan noted that the government has committed to expand protected areas by an additional two million hectares, by 2020. Next year, he said, the government will engage in consultations with stakeholders, beginning the process for delineation of the expanded area and to design a related management plan. “These actions are consistent with meeting our commitments under the Paris Declaration and in keeping with Guyana’s commitment as a signatory to the Convention on Biodiversity,” he stressed.
According to Jordan, the sustainable management of the country’s environment will see additional resources being allocated for greater compliance and monitoring, and strengthening of operations by regulatory agencies.
To complement these initiatives within the regulatory framework and curb the less than desirable consumption and production patterns, he said, government will be introducing an environmental levy on the manufacturers and distributors of products that use non-returnable metal, plastic, and glass beverage containers. Additionally, it will grant exemptions of customs duties and taxes on greenhouses and their component parts, among other concessions.
He said too that to create an overarching framework to guide the management of biodiversity and chart a course for national development, the government will embark on the design of a Green State Development Plan, with support from the United Nations Environment Programme (UNEP). Jordan explained that this plan will serve as the template to guide the rapid transformation of the economy, reorienting the structure of the production base and promote diversification to reduce the reliance on the ailing traditional sectors. These efforts, he said, will lay the path to eliminating Guyana’s dependency on fossil fuels and moving the country closer to the target of 100 percent renewable energy supply by 2025.
Building on previous initiatives with a low carbon focus, including the use of renewable energy sources and co-generation alternatives, he stated, government will review and expand the scope of alternative energy solutions. The immediate measures that will be taken towards this expansion, he said, includes the lowering of the excise tax on hybrid and electric vehicles; granting of tax exemptions to set up electric vehicle charging stations; zero-rating the excise tax on biofuel and specially designed refuse trucks; the restriction of used tyres; and reduction of taxes on new tyres.
He said that in addition, government will prioritise evidence-driven and cost-effective options to determine “our renewable energy choices” across the country to successively transform the energy mix and reduce the share of non-renewable energy sources in the overall ratio. In this regard, he noted, government will shortly be releasing the outcome of a review of the Amaila Falls Hydroelectric Project, which was undertaken by Norconsult, the Norwegian-contracted consultants, after the comments of both the Kingdom of Norway and the Co-operative Republic of Guyana are incorporated into the final document.
With regard to the forest and climate partnership agreement between Guyana and Norway, Jordan pointed out that it was agreed that in early 2017 an agreed work plan for detailing Guyana’s clean energy transition will be put in place. This, he said, was decided during a recent meeting between Granger and Minister Vidar Helgesen of Norway. The two, Jordan said, also agreed to continue a dialogue on how to develop their partnership in the 2020 to 2030 period.
