Amaila should be scrapped

Dear Editor,

Mr Brassington is reported to have said that after one year of the Amaila Falls Hydroelectric Project coming on stream, the demand for electricity will be greater than the supply and Guyana will have to seek additional electricity supplies from another project. This alone is strong justification for the rejection of the Amaila project, for economists will tell you that when demand is greater than the supply, the price will increase; and without competition and no effective oversight by a public utilities commission, consumers will be in a high price paying world with poor services generated by a monopoly that has no incentive to change its inefficient behaviour. Put differently, there is no need to worry about whether or not the other financial, economic, social and environmental concerns have been satisfied, for additional electricity cannot be sourced from Amaila Falls, for the Falls do not have the extra capacity.

What is more troubling is the fact that in the electricity supply business when the demand for electricity is greater than the supply, management of the electricity supply company will cut some consumers off the grid and supply only what they can to a selected set of ‘favoured customers’ who have political clout and/or deep pockets. This is achieved through a programme of rolling brownouts and blackouts. Guyanese have experienced this type of spotty electricity supply from GPL/GEC for the last three decades. Therefore spending US$1.0 billion dollars to put such a deficient system in place at Amaila and specifying that it will be around for several decades would be disastrous for Guyana. This outcome alone should signal to policy-makers that this project should not be undertaken as it makes no economic sense. Noting also that Amaila will not supply electricity all year round due to a possible shortage of water during the dry season is another structural setback that will force GPL to have a working backup system that would be just as large as Amaila in terms of electricity supply capacity.

The bad news with this back-up system is that it will be underutilized in the dry season and this will increase consumer electricity costs.  Private companies would be ill-advised to depend on such a faulty system. They would bypass the national grid and maintain their self-generating electricity supply systems, once they wish to maintain profitable businesses. We have already witnessed this in Guyana as large companies have opted out of the national grid, shifting their dependency to their own electricity supply. The ongoing fiasco at Lethem comes to mind as well. In this case, private companies and consumers have been penalized with the collapse of the hydro-power supply built by a Chinese company and the government has done nothing to alleviate the situation there.

Scrapping Amaila will allow us to consider other sites that are more in keeping with supply and demand projections. Specifically, such a project site must have at a minimum the following attributes: a continuous flow of water all year round; it must have the capacity to satisfy a growing demand for electricity for at least 10 to 15 years into the future, instead of only one year as is the case at Amaila; it must satisfy environmental standards and compensate disrupted communities; it must be financially and economically viable; it should not depend on government subsidies; it should conform to standards set by an effective public utilities commission; and should generate electricity at prices that are commensurate with other hydro-power systems of comparable size and cost. The National Development Strategy identified sites at Tiboku, Amaila, Tumatumari, Kamaria, Tiger Hill and Arisaru. We have learnt a lot about the limitations of Amaila, but not much more about the others, except Tumatumari which could satisfy many of the criteria listed above, including all year round electricity supply and a capacity to meet a growing demand for 10 to 15 years. It is time for Guyana to get its energy supply right. Do not burden Guyanese taxpayers with another white elephant. Scrap Amaila Falls, it is not the first choice.

Yours faithfully,
C Kenrick Hunte

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