Tuesday’s Economi Corner
By Peter R Ramsaroop, MBA
Introduction:
The blackouts we are made to face daily have affected all of us. In previous columns, I have highlighted the effects it has on businesses and our personal lives and felt once again that this issue must be addressed.
The Alliance For Change (AFC) recently highlighted the fact that the PPP/C government has been managing the affairs of GPL for the last seventeen years and must therefore absorb the blame for the failures of this monopoly service provider to deliver, at the minimum, a safe, reliable and affordable service. “That they have failed to do so is indicative of other failures in the realm of governance and Public Utilities Commission regulation since the recent public forum has not brought relief from the frequency of unscheduled blackouts and other areas of non performance by GPL.”
Impact on Businesses:
The reliability of electricity supply is very low and we all know the frequent and long outages and voltage variations. The poor reliability has placed a significant burden on all of us and especially in the business sector and reduces our competitiveness. This is a major obstacle to growth in our nation and must be addressed as a national security issue. A recent World Bank report indicated that the revenue loss to local businesses from blackouts is the highest in the region.
When business have to invest in self-supply of electricity it is both costly and generates economic inefficiencies. The failure of GPL to invest in upgrading their equipment and having a long term vision has become more evident. The government can put in place measures to make it easy for companies/organizations/individuals to invest in renewable energy and sell excess power from these sources to the GPL in cases where they are grid-connected by means of a net metering law.
Public/Private Partnership (P3)
and Build, Operate, Transfer (BOT)
Even as the government threatens to nationalize the telecommunications industry, it is important here to advocate for a public and private partnership to manage GPL and ultimately to create a new approach with new sources of energy using BOT. The company (GPL) run by the government has failed to address its technical and governance problems. They continue to demonstrate they cannot manage to resolve the technical issues and thus the blackouts are the result. GPL must aggressively work on developing partnerships with independent providers such as companies that have invested in self power. The last private investment initiative failed because of the heavy handed approach by the Government and the PUC on the private investors. A complete reform in this sector is needed.
Recently the President said that the Amaila Falls Hydro Project and the Hope Beach Wind Energy Project may not be feasible. Wind power can work especially on the Coastal Plain. Other countries have created incentives for such energy by reducing taxes and import tariffs on such equipment, why has our government not done that also?
A key renewable energy project right now for Guyana would be Solar Power. In Toronto, Canada, the average sun hours per day is 3.5. In New Jersey it’s 4.5. In Guyana it’s pushing between 8 and 9. This means that a Solar System constructed in Guyana will provide better than twice the electrical power per day produced by a similar system in North America. Globally, most countries are pushing Green Technology and are implementing Green Energy rules and regulations. Most popular is the Net Grid Program which perhaps can be phased in at a later stage in Guyana. GPL might well remain as the owner of the grid but buying power from independent power producers (IPPs)
This Renewable Energy Project would be developed in three phases; short-term, medium-term and long-term. The short-term would be exclusively Solar. The medium and long-term phases would be flexible. These two phases would be used to assess the performance of what has already been built and what other feasible renewable energy power should be pursued to supplement the existing system.
The Brazil Connection –
For Alternative Energy:
Finally, we have seen a major turn around by our government on looking South to Brazil as a major economic boost for Guyana. The words of President Jagdeo that the paving of the road to Brazil was not cost effective will have to be buried under the same road. Even the Foreign Minister and the Chairman of the Private Sector Commission have finally accepted that the Guyana 21 Plan initiatives including a deep water harbour, increased transportation and shipping avenues and a paved road to Brazil is critical for our economic success. In addition, the Brazil connection comes with solutions for alternative energy.
We should be working on attracting major investors aggressively for the alternative energy sector – including the production of ethanol and other alternative sources of energy. Brazil has offered to assist us with the technology since August 5, 2003, when President Jagdeo visited that country. Maybe when our President meets with President Lula again, he will apologize and finally accept this offer given the high cost of energy here.
I have written many investment papers on the subject of Economic and Energy Diversification – “Sugar to Ethanol” and “Producing Ethanol – a Guyana Product.” We continue to lobby our government to create programmes that will fast track investment in these areas.
Conclusion:
What we as consumers and citizens need to realize is that without the right economic and investment policies for the nation, we are the ones that suffer at the end of the day.
When will the curse of GPL Blackouts, the curse of wrongful disconnections, estimated billing, pre-paid billing inequities, power surges, and low voltage that cause consumers to suffer incalculable losses be lifted off the backs of the long suffering Guyanese people? “The silence of the subject Minister, Mr. Samuel Hinds given the upsurge of problems at GPL highlights the culture of opaqueness of this government as well as their indifference to the social and economic consequences of GPL’s non performance.”
These disturbances cannot be allowed to continue. A new energy policy must be created with emphasis on reducing the dependence on oil, investment in renewable energy and facilitation of private investors in this sector. Until next time “Roop”
Send comments to peter.ramsaroop@gmail.com
