Dear Editor,
This letter responds to the article appearing in the September 18, 2008 edition of Stabroek News, which was based on a report ‘put out’ by the IDB entitled ‘How to save US$36 billion worth of Electricity (without turning off the lights)’ – a survey of energy productivity in the Americas.
Assuming that the intent of the Stabroek News article was to earnestly and effectively deal with a problem, the headline should have been ‘Guyanese waste the most energy in the region.’
The headline is damning, but, who is to be damned?
Each and everyone in Guyana must consume less energy in all that he or she does, for a significant reduction to be achieved in the total consumption of energy by Guyana.
First, some clarification:
This report is not based on observing, accumulating and totalling instances of the wasting of energy. Rather, this report starts from tables of all the energy consumed in each country, whether efficiently or wastefully, in production and in recreation; and the reported country’s GDP (the value of all the goods and services produced − the economic value of the efforts of everyone in the country). Then, essentially, total energy consumed by the people of the country is divided by the GDP, giving a figure of so many ktoe (kilo tons of oil equivalent) of energy per dollar of GDP; and, it is this figure, for Guyana, that was found to be the highest in the region. This IDB report is really, ‘A survey of Energy Productivity in the Americas’ as the sub-title states.
It is not that Guyana is the largest waster of energy that has been established, but rather that Guyana uses more energy, for every dollar of its 1ivelihood, than any other country. The assertion that Guyanese waste the most energy is an inference drawn from the data, a reasonable but questionable inference − nonetheless, an inference that merits our earnest attention!
Prime Minister, at the same time, maintains that if the IDB wanted to make a case about wasting energy, and about energy efficiency issues, important issues, then this report should have presented direct estimates of the ‘wastage’ of energy reconciled with a tota1 energy balance for each country. It is but ‘first principles’!
This report has confused, and adds to the confusion of, three related but different things.
(i) wastage of electrical energy; (ii) avoiding or alleviating the need for increases in installed generators of electrical power; (iii) total energy productivity in the various countries.
The report mixes electrical energy and electrical power, electrical energy and total energy. This distinction needs to be sensed and maintained to accord with the case being made, and the sanctity with which we might be expected to approach a report ‘put out’ by the IDB. And Prime Minister is not ‘nit-picking.’ If the focus was really on energy wastage, then various types of energy loss should have been tabulated and estimated for Guyana, then we would have been able to see the likely reward on tackling various areas and, accordingly, prioritize our focus. And, so, Prime Minister considers the report unprofessional (to use a word from which Prime Minister tries to stay away).
The Guyana Energy Authority (GEA), the institution mandated to monitor the consumption of energy in Guyana, has reported that they have down-loaded a copy of the report from the internet and checked the data presented. Whilst Guyana remains in the uppermost quarter of highest energy consumption for every dollar of production, GEA did not find Guyana to be the actual highest:
(i) A straight calculation of energy consumed per dollar, from the tables given, did not give the identical numbers as listed in the IDB paper; moreso, the order of increasing “wastefulness” was not exactly the same. Quite possibly, some “normalizing” adjustments were introduced in the IDB calculation, but there is no such statement.
(ii) The energy consumption for Guyana in 2006 was stated as 765 ktoe. GEA records show a total of 647 ktoe − 457 ktoe for all petroleum-based fuels and an estimated 190 ktoe from bagasse, fuel-wood and charcoal. Guyana’s records show 15% less energy consumption than the figure in the IDB report.
(iii) In terms of GDP, the report lists US$771 million − our BOG figure is US$755 million − a figure that is 2% higher than ours, representing a negligible difference.
(iv) Accepting that the retail prices of gasoline and diesel are really what they were on August 20, 2008, the figures for Guyana should be 1.05 and 1.10 US$/litre respectively, instead of .15 and .65 respectively − moving Guyana from 5th cheapest to about 10th cheapest in the twenty-eight countries shown. At the highest end, Spain, gasoline and diesel are each shown to cost about US$2/1itre, just short of twice the price in Guyana.
(v) With respect to residential electricity prices, Jamaica, Guyana and Barbados are shown as 0.24, 0.22, 0.21 (US$/kWh) respectively. Whilst these were the three highest prices shown, prices were shown for only six of the fifteen full plus five associated Caricom countries. The countries not shown have generally higher electricity rates than Barbados, Guyana and Jamaica, so the position of GPL and the Minister for Energy remains valid – GPL’s prices in Guyana are about middling for Caricom and the Caribbean.
Guyana’s apparent high overall energy consumption per dollar of production, has been well known, and has arisen from time to time in discussions between government officials and multilateral institutions, and also in bilateral discussions. There are three factors regularly pointed to:
(i) the nature of Guyana’s economy: with a large part of it being high capital, high energy-consuming − primary and extractive − natural resource-based economic activities – economic activities which do not bring us good ‘returns.’ This, in effect, in this quote from the Stabroek News article:
“The IDB said that Latin American governments were expending billions of dollars to subsidize fuels. It noted that the Financial Times recently reported that Latin America and the Caribbean will spend at least US$50 bil1ion in subsidies for transportation fuel during 2008 and added that this was more than five times what the IDB will lend to the region during 2009.”
What is to be read in this is that there should be no subsidies to fuel and energy, that the subsidies should be put to social and economic investments, to even create a fund to replace IDB lending; that the Government of Guyana should not have taken off all taxes from diesel and reduced taxes on gasoline to only 7%, thereby creating a big hole in the nation’s budget. If the IDB and Stabroek News would say so clearly − explicitly − putting their significant standing behind such efforts to forcefully end waste of energy, then they would help the public understanding and acceptance of the remedies that they are indicating.
Prime Minister would like to refer also to a set of broad, generally recognised areas of wastage referred to in this IDB report and in the Stabroek News article.
“The IDB found that the region is still overwhelmingly reliant on incandescent light bulbs… its factories and water systems use millions of old, energy-wasting, electric motors and pumps… transportation infrastructure is grossly inefficient…. commercial and. residential buildings are full of outdated air-conditioning systems, refrigerators, washing machines and water-heaters.”
These statements are as true of the developed countries which, having developed earlier, have a great amount of legacy infrastructure that would have been the best at the time they were put in decades ago, but which have been superseded since. Prime Minister, in a visit to Niagara Falls in 1994, learnt that there was still some 25-cyc1e generation to supply some 25-cyc1e ‘loads’ from the beginning of electrification, nearly a century ago!
Changing over to newer, more efficient equipment is obviously desirable, but there are costs involved. The timing, the financing, and the economic justification are serious issues.
People in the business would know that replacement to achieve higher energy efficiency is hardly ever economic in itself. The move to more efficient models is usually tied to replacement for other reasons. Even so, more efficient units often cost more to provide: hybrid cars cost more than regular cars; compact, fluorescent lamps cost more than incandescent bulbs and more efficient transformers cost much more than less efficient ones.
Prime Minister has been approached from time to time by persons wanting to properly set up their smal1 welding and fabrication shop, who were dismayed that GPL was insisting that they purchase the more expensive transformer rather than the cheaper one! Poor countries have to give much thought to the efficiency standards that should be set at a particular time, for the higher standards place greater hurdles which poorer people may not be able to get over − they may not be able to get to the first step on the stairway of increasing production, productivity and prosperity.
Prime Minister’s greatest pain is caused solely by the person who wrote the Stabroek News article and by Stabroek News altogether. How could Stabroek News, with the explicit call in the IDB report for the replacement of incandescent lamps with compact, fluorescent lamps, not refer to our bulb replacement here? Stabroek News certainly knows that over the period January 2006- February 2007, thanks to the generosity of the Cuban government and people of Cuba, some 446,796 lamps, costing about US$750,000 were distributed at no charge to 110,000 households across Guyana. Prime Minister wishes that more people would similarly put their money and substance behind what they preach!
Prime Minister hopes that Stabroek News is on the side of Guyanese and Guyana, and is aware of its responsibility in contributing to a general understanding and harmony in our society.
Yours faithfully,
Samuel Hinds
Prime Minister
Editor’s note
Contrary to what the Prime Minister says Stabroek News adopted no editorial position when reporting on the contents of the IDB report referred to above, and neither would it have been acceptable for us to do so. The story in question was a case of straight reporting on what was contained in the IDB document.
