Absorbing what Guyana Power and Light (GPL) Chief Executive Officer, Bharat Dindyal had to say last week about electricity supply would have left many consumers shaking their heads and wondering whether time had stood still.
The problems remain the same: decrepitude in the transmission and distribution (T&D) system, continued shutdowns of the Demerara-Berbice Interconnected System (DBIS) and rampant theft of electricity.
These shortcomings would have been very familiar to Mr Dindyal in his previous stint at GPL and one wonders what new solutions are being devised for the chronic problems besetting the sector.
On October 24, 2016, Stabroek News editorialised as follows:
“What continues to be a major concern for GPL and the country is the poor state of the transmission and distribution (T&D) system. Therefore, no matter how much power is produced by GPL generators, GPL’s customers face a risk of the loss of power even if for short periods. One of the worst manifestations of this would have been on October 18 when there were three distinct shutdowns of the DBIS within four hours and there was loss of access to a whopping 32 megawatts of power or 23 % of total generation. This led to lengthy emergency blackouts in various parts of the country.”
Compared to the disastrous 1980s when the then Guyana Electricity Corporation suffered complete shutdowns that left large sections of the grid without power for days and blackouts were a daily occurrence, the situation is much improved. These improvements have however come through expenditure of large amounts of taxpayers’ money on new generating plants and costly loans.
A lot of money is frittered away annually via the inefficiencies of the T&D system and GPL has not been able to significantly cut technical and commercial losses over the last 20 years. It has failed to meet the benchmarks set year after year to reduce losses and particularly on the T&D side there is no clear way forward.
A Chinese-funded project for substations has not led to the results expected and concerns had been raised during the tenure of former CEO Albert Gordon that aspects of the project were not executed correctly. The loan for this substation project has to be repaid as has been the case with large credits from multilateral financing institutions particularly the Inter-American Development Bank (IDB). If one were to examine the large sums poured into the electricity sector here over decades, searing questions would be asked of the IDB’s policy and whether its financing had achieved any of its inscribed objectives.
Expensive management contracts, consultancies and a fruitless privatisation are just some of the major measures that have failed to yield fundamental change at the utility over the years. A new round of aid is being disbursed through a multilateral facility involving the European Union and the IDB, the Power Utility Upgrade Programme (PUUP). At last word, another financier, the Islamic Development Bank has had to step in with bridge financing for the project. The PUUP is part of GPL’s development and expansion and aims to reduce the overall losses in the power system. It would be interesting to hear from GPL and the financiers what has been achieved this far.
With the government advertising dozens of big-ticket projects for investors to subscribe to, it will be clear to the investment promotion agency and others that the state of the electricity sector will be a key deterrent along with the cost of power. The hotels that are going up at the moment will have to invest heavily in standby power and maintenance costs and guests will not be impressed at having to endure power cuts.
Furthermore, GPL will be a critical factor in the decisions that will be made about the Amaila Falls Hydropower and the troubling gas-to-shore-to-energy project which the government seems intent on pursuing. Any assumptions about the efficiency of the supply of power to GPL from Amaila Falls along a single conduit could be severely undermined by the brittleness of the T&D system. The projected cost of power could also be affected. The same would also apply to the projections for the gas project which already faces a series of daunting questions relating to Guyana’s climate change obligations and the risks of piping gas to shore for conversion to energy.
Why given the climate change imperatives and perils should Guyana be throwing more money into fossil fuels generation at GPL rather than investing in solar and hydro facilities? The country continues to present a conflicting image to the international community of wanting to be a Low Carbon economy while moving headlong into natural gas conversion and rapid extraction of oil from the Liza-1 well and soon to be joined by the Liza-2 well. This contradiction was on full exhibition at COP26 in Glasgow, Scotland.
The ongoing problems at GPL reflect the basic failures in managing a utility that was underfunded for many years and allowed to fall into a rut. Getting out of this plight requires decisive steps on the T&D system and a determination to limit commercial losses. However, both the government and GPL also have to accept the reality that power cannot be generated in the same quantum from fossil fuels and a fundamental reorientation of how to meet the country’s energy needs is also required.
