Dear Editor,
We note with interest columns dealing with GPL and the electricity situation in the September 1 and 4 issues of the Stabroek News and though that there is need for us to contribute to the discussion. GPL is cognizant of the critical role a reliable and competitively priced electricity supply plays in the development of any country.
A reliable electricity system comprises the following elements:
1) Generation capacity comprising base-load units (typically capable of operating continuously for extended periods), and peaking units (used for peak lapping, ie short, periodic duty) and reserve capacity which is typically twice the capacity of the largest unit.
2) Reliable transmission and distribution network with a redundancy level of at least 20% and configured to provide at least three sources for every circuit. Smart Grid technology is now informing modern designs.
3) Capability to manage the system automatically.
In Guyana –
l) Our generation capacity is inadequate to meet peak demand.
2) We have peaking units providing base-load service.
3) There is no generation reserve.
4) Our distribution network is loaded beyond economic levels by a factor of 2.5.
5) Our control system is totally manual.
It is therefore not difficult to understand why our electricity supply is what it is.
Do we know what to do?
The fact that load shedding has been a reality for decades leaves one to conclude that if we can’t fix the problem after thirty years then we possibly don’t know what to do. The reality is the opposite, but what is required to fix the problem?
GPL has on its website a rolling five-year Development and Expansion Programme which sets out in detail what is projected to be done and what impact these developments will have on the service we provide. This is our vision for development that would improve the quality of service and make the cost of power more competitive. The investment needed over the next five years is almost US$160M.
One will see in our generation plan a move to a combination of heavy fuel oil and renewable sources in the short term and almost total renewable sources within five years. The renewable sources include bagasse, wind and hydro.
While we enjoy extended periods of sunshine, this source of power is still not economical. In countries where net metering is employed the consumers are paid many times more the cost per kWh supplied to the grid than they would pay for a kWh supplied by the grid. The government typically pays the utility the difference.
There is a limit to the level of wind power penetration as this depends on grid stability. This has to be considered when we talk about our potential.
Investments
While it may be easy to get the attention of investors for power projects, one must realize that reaching an agreement is an entirely different matter. It is very easy to advocate that private developers should be encouraged to invest in renewables and buy power from them, but it is an entirely different matter consummating an agreement. The least of the problems is offering incentives to encourage the investment, as usually this is important to ensure that the power is least cost.
The most difficult issue to negotiate with any investor is payment security. When you consider Guyana’s credit rating and our country risk, negotiating acceptable security that does not add to the national debt is very difficult.
You really have to be involved in these negotiations to appreciate the degree of difficulty.
Losses
Our total losses are currently 34.1% and this includes technical losses of 11.4%. Losses do contribute to our tariffs. Often it is represented that the reduction of losses is more an issue of will than resources. In our five-year Development and Expansion Programme we are projecting to spend about US$17M on non-technical and US$54M on technical loss reduction over the next five years. Loss reduction therefore has a lot to do with huge financial outlays, and in Guyana we also have the issue of cultural change as electricity theft is a major problem.
Grid coverage
It should be obvious that spending billions of dollars to serve small pockets of consumers in our interior is not feasible. In fact, even when the hydro achieves commercial operation it would be uneconomical to install 230Kv substations to serve loads below 10MW.
Guyana would have to employ technologies, as other countries are doing, that are appropriate economically and sustainable to meet the power needs of small remote communities.
GPL and the private sector
We recognize the critical role our business sector would play in helping GPL to improve its service. In fact, in our Development and Expansion Programme we are projecting to reduce tariffs for our large industrial and commercial customers at a faster rate than any other category of consumers. Contrary to popular belief it is possible to self generate competitively, but GPL is aiming to reduce its tariffs incrementally, below the avoided cost of most and eventually all self generators. We expect that with the advent of hydro we will be able to attract all self generators back to the grid.
Between now and 2011 we are looking at almost US$80M being invested in generation, transmission, distribution and control facilities that would dramatically improve the quality of supply. These investments will allow GPL to also reduce its operating cost and position it to deliver power from the hydro throughout our network in Demerara and Berbice efficiently.
Sustaining an acceptable level of service
Sustaining an acceptable level of service requires timely investments in generation capacity to meet growing demand, and in transmission and distribution facilities to ensure the safe, reliable and efficient delivery of power to consumers. While we do this we need to ensure that electricity is used efficiently and that all consumers are equipped with the necessary knowledge to inform attitudinal change and to leverage appropriate technologies. Consumers should know that they can improve their quality of life and still reduce their electricity consumption.
Pre-paid technology has improved tremendously over the years and has matured for some time now. The split meter version that GPL is using provides users with a powerful tool to manage their electricity consumption. GPL has also adopted this technology to improve customer service as many of the problems consumers complain about now would be solved by pre-paid meters.
The capital needed to realize timely investments has to ultimatelv come from tariffs. One fundamental challenge we have to overcome is ensuring that the vast majority of our consumers respect and deliver on their commercial obligations. If most of us can be commercially responsible then the burden on each of us would reduce and GPL would realize the revenues to sustain an acceptable quality of supply.
Yours faithfully,
Shevion Sears
Public Relations Officer (ag)
GPL
