Big companies choosing generators over GPL
-say they are cheaper, more reliable
Stabroek News
November 27, 2002
With the cost of electricity soaring, some of Guyana’s larger companies are generating their own power and the issue is now the subject of a study by the city’s chamber of commerce.
The move could cost the Guyana Power and Light (GPL) millions of dollars in lost revenue putting further pressure on its ability to meet its financial targets.
When contacted on this issue on Friday, GPL’s public relations department had referred Stabroek News to the company’s Chief Executive Officer and said the matter could be raised with him on a tour that was being arranged for the media today.
The state has a 50% stake in GPL and President Bharrat Jagdeo has been very critical of the company’s inability to cut its line losses which the government has argued keeps its costs of production high.
BK International generates its own power for its Mandela Avenue and Linden operations and BK’s Managing Director, Brian Tiwari told Stabroek News that at his Mandela Avenue operations he saves about $500,000 per month.
DIDCO self-generates both at its Ruimveldt warehouse and at its KFC and Pizza Hut outlets. In fact the Ruimveldt operations has never received power generated by GPL.
DIDCO’s boss Deo Singh confirmed yesterday that his company turned to self-generation for his KFC and Pizza Hut outlets when the electricity bill jumped from $3.7M to $8.4M a month starting in January.
Singh told Stabroek News that a number of the larger business concerns are also going the self-generation route. However, he said self-generating places added burdens to manage and maintain generation systems.
Stabroek News was unable to speak with officials from Banks DIH and DDL but it has learnt that Banks receives power from GPL in addition to what it generates itself.
A recent article in Stabroek Business reported that a 132 KW Perkins engine - adequate to power a bank, a 3-5 ton rice mill or a commercial business - costs $2.8M including installation, working out to a fixed charge of $46,666 over its five-year life span. Running costs are mainly in fuel, costing an estimated $15.37 per Kilowatt Hour. With oil and other maintenance work, total running costs are around $20-25 per Kwh. This compares to a typical bill from GPL of $29.81 per KwH and a demand charge of $59,999. The downside is that businesses need their own back up so the overall system would be more expensive. And while blackouts from GPL may last hours, a broken generator could require days to fix.
Noise and pollution are also issues in urban or residential areas.
A source close to the manufacturing industry is critical of GPL’s operations which he says are subsidised by taxpayers through the duty-free concessions the company receives for fuel and other essentials. He wondered how businesses generating their own power are able to do this cheaper than buying power from GPL.
The Georgetown Chamber of Commerce and Industry has brought the issue of soaring electricity bills to the attention of the Private Sector Commission and is preparing a detailed paper on the extent of the problem, according to Private Sector Commission chairman, Dr Peter deGroot.
Dr deGroot yesterday could not say how many companies had switched to self-generation but he did say that his own company’s Water Street’s operations had suffered from transformer problems because of the expansion that had taken place over the years.
He said the issue is near to being resolved and GPL has agreed to bring in the required transformer. An official of the Guyana Manufacturers’ Association was also unable to say how much self-generation takes place by the association’s members.
He said the association was in the process of conducting a survey at the request of Synergy Holdings, the company engaged in setting up a hydro-electricity facility at Amaila Falls.
