Affordable energy is vital to development - O'Lall
Hydro sites have been mapped, wind power is on the agenda
Current Affairs August 2004
Stabroek News
August 18, 2004
Guyana's renewable energy sources can sustain a higher level of prosperity if proper attention is given to developing its renewable energy resources. And head of the Guyana Energy Agency, Joseph O'Lall, believes that the private sector can play an important role in developing them. But he bemoans the fact that endowed with natural resources as Guyana is, not enough attention is being paid to developing its renewable energy resources.
In an interview with Current Affairs O'Lall said "we have all the potential to become a rich country with rich people. But unless you are going to pay appropriate attention to the energy sector even with the best laid plans it would not be possible to realise that objective."
He explained that Guyana has very little money to spend on energy therefore the government welcomes investment in the energy sector. He asserts that there is a high correlation between the consumption of energy per capita and the level of the standard of living which holds good between countries as between communities in a country.
To illustrate this iron law, as he calls it, O'Lall says just make the comparison between Guyana and Trinidad and between Bel Air Gardens, where the consumption per household is high and Tiger Bay where the light bill of a household shows a lower per capita consumption because of the size of the household.
Thus for O'Lall affordable energy is the sine qua non for economic development. "It does not matter how good or well laid the plans you have for any economy, if you cannot provide affordable energy it comes to zero."
He explained that in the past energy was so cheap that nobody took account of the fact that energy plays an important part in economic planning. In the past he said you could have put energy cost at 5 per cent of a budget but now it now it is nearer 50 per cent. "For every finished product on the market about 40-45 per cent of the final production cost is energy, be it a shirt button, a pencil or a pair of spectacles."
As a consequence, he said, there is need for a stronger focus on the development of indigenous energy in the country. "In Guyana which is endowed with natural resources the development of indigenous energy is not being given the attention it ought to get."
Energy policy
O'Lall says that Guyana's energy policy, which has to be reviewed since it was formulated ten years ago, dictates the promotion of indigenous energy sources even if oil is found in commercial quantities. He said that Guyana is the only country in the Caribbean if not the world that has set itself the goal to move to renewable energy resources. Guyana has all the renewable energy sources save for the geothermal sources because it has no volcano.
He explained that all energy sources have their origin in the sun and the renewable energy sources available here are hydropower which in Guyana has a total potential from the larger facilities of generating 6000 megawatts (Guyana's present consumption is around 100 megawatts), solar which can be harnessed at an affordable cost for individual use but which is costly for large scale use in factories, and wind, which the GEA has measured along the coast to determine the rate at which it blows and the locations of the corridors along which it blows.
The Guyana Energy Agency
And commenting on the role which the agency, an offspring of the Guyana Natural Resources Agency which in 1998 was divested of responsibility for natural resources that was distributed to a number of other agencies plays , O'Lall says that its vision is "the creation of an international grid which connects up all of the large hydropower stations ."
The agency was created by the Guyana Energy Agency Act 1997, which was amended in 2004 to allow the agency to "utilise a marking system to add markers to petroleum and petroleum products imported by every person under an import licence or import wholesale licence issued by the Agency for the purpose of identifying such petroleum and petroleum products as having been legitimately imported." The amendments also allow for the imposition of sanctions for those persons found in possession of petroleum and petroleum products illegally imported into the country.
O'Lall explains that the GEA is the repository of all data concerning energy. "We have information which if it is to necessary to obtain again, geological data from all of the hydro-power sites, would cost millions of US dollars."
He said that the information is logged and the cores are stored at various areas as it would be too expensive to bring them to Georgetown. The cores are properly identified and are regularly inspected to ensure that the containers in which they are stored are in good order.
He said too that as a precaution copies of the volumes which contain the logged information are stored at other agencies. Also, he said that the information is being prepared for storage in an electronic format.
Hydropower
O'Lall says that the GEA "has mapped and studied all hydro sites in Guyana greater than 5 megawatts to the pre-feasibility level. We have spent millions of US dollars getting that information"
At present he says that his agency has Memoranda of Understanding with large hydropower facilities. These are Amalia, which is supposed to supply 100 megawatts of power to the national grid at US0.08 cents per kilowatt hour (kwh) reducing to US$0.03 cents after 15 years and has a project life of 50 years; Tortruba, which has a development capacity of 1000 megawatts (Amalia has 165 megawatts) which is destined for export into north Brazil and/or to the Caribbean; and Tumatumari, which can develop 50 - 55 megawatts.
Another facility that would be available is Kamira on the Cuyuni River which would be capable of developing 300 megawatts.
He explained that the export of the electricity can be facilitated by the underwater line Trinidad and Tobago proposes to supply natural gas to the Caribbean and if it becomes necessary Venezuela can also use it to export its natural gas. He said that it is cheaper to lay an electric power cable than a pipeline on the ocean bed.
With the hydro-facilities connected to an international power grid located in a north-south line O'Lall said it would make possible the importation of natural gas from Venezuela that would allow bauxite to be smelted into aluminum. With Guyana having the best metal grade bauxite in the world it can facilitate the conversion of four tonnes of bauxite into one tonne of aluminum, which is not possible anywhere else in the world.
"Therefore it makes sense to smelt bauxite into aluminum using the natural gas from Venezuela and whenever hydropower comes on stream we can use this which is cheaper to power the smelter and the other to generate electricity to put on the international line to sell to northern Brazil or the Caribbean."
Natural gas
O'Lall says that the use of natural gas has several advantages as "it can be used to generate a whole heap of petro-chemical industries". He says that urea can be produced from natural gas as the Trinidadians are doing and be distributed to farmers at a relatively low cost to help increase their production. "Productivity would rise tremendously".
Another product which can be produced using natural gas, O'Lall says, is cement. He explained that 60 per cent of the overburden stockpile one sees on passing the bauxite operations at Linden is an ingredient which when combined with a particular chemical lime which Haiti has in abundance and lots of energy can be converted into cement. "Right now we are selling, subject to correction, the dust for some ridiculously low price to a US company."
Bio-mass sources
The biomass resources include all wood and wood related substances such as bagasse and rice husk.
O'Lall explained that from time immemorial the sugar industry has been generating power for its operations using the bagasse as a way of getting rid it. He said that as a consequence efficiency was not a prime consideration in the methods used to generate the power. He said that when checked those methods have a 4 per cent efficiency rating. However, he said that with the use of high pressure/high temperature boilers the efficiency rating could be increased to around 28 - 32 per cent and increase the amount of electricity the industry sells to the local grid from its plants from 20 megawatts to 80 megawatts.
The advantage this affords, O'Lall points out, is that with world sugar prices on decline Guysuco can switch from growing cane with high sucrose content to growing high fibre cane, which would reduce the amount it now spends on research for finding the type of cane with high sucrose content.
He said too that the switch could also facilitate the production of ethanol which when mixed with a small amount of gas can power a car without any problem thus helping the nation's gas bill for the transportation sector.
O'Lall discloses too that the GEA has an energy farm on the Soesdyke-Linden Highway where it is experimenting with the cultivation of the acacia on white sand. He said that a United States firm has already expressed an interest in cultivating the plant on a large scale for pulping to produce paper.
He said that it plans setting up an experiment with bamboo which when pulped and coated with kaolin produces a very high quality paper.
"O'Lall explains that once energy could be supplied cheaply it would spark the establishment of numerous cottage industries without prompting from any official source."
Wind power
O'Lall said that the Renewable Energy Department of his agency using the kite methodology has identified a number of sites along the coastland where wind farms could be located. Among the locations where the poles being used to obtain the measurements are sited are near the Earth Station in Georgetown and at Hope Beach, East Coast Demerara.
"We have enough wind information at Hope Beach for the construction of a wind energy farm and on which work is due to start in the last quarter of this year, a 10-megawatt plant and about 12 towers are to be erected."
O'Lall said that Delta Caribbean, a subsidiary of a Dutch firm will be constructing the facility. He said too that a Spanish firm, Made Tecnologias Renovables SA a branch of GAMESA has contacted the agency expressing an interest in developing wind energy in Guyana.
Fuel Purchasing and Marking
O'Lall explains that the agency is responsible for the purchasing of all fuel imported into the country, pointing out that there are economies to be gained from doing so in large quantities. Also he said that it is a "specific duty of the agency" to ensure that the specification of the fuel required by the agency is maintained so as to ensure that consumers can have a standardised fuel.
By centralising the purchasing, O'Lall says that the quality of the fuel being bought is known and the fuel is subjected to international inspection.
He says too that the agency plans to set up its own laboratory to test samples of all fuel entering the country. "If you are responsible for something you have to ensure that at every node you have what you have paid for."
As such he said it has responsibility for negotiating contracts for the purchase of fuel with Trinidad and Tobago and Venezuela for all the oil companies, Esso, Shell, Texaco and Guyoil which is immediately sub-contracted to them. However, he said that because of the force majeure declaration by Venezuela the agency has temporarily been allowing the oil companies to purchase their own fuel save for Guyoil for which the agency still makes its purchases. But he says, "We do intend in the near future to bring back the oil companies under the aegis of the Guyana Energy Agency."
Fuel marking was introduced earlier this year and already it has been announced that it has increased revenue from duty on imported fuel by some $200 million a month. The marking system was introduced to address the problem of fuel being smuggled into the country from Suriname and Venezuela.
O'Lall reaffirmed that the legislation is intended to put the smugglers out of business and that those involved have been given adequate warning to put an end to their illegal activities. He vows that so long as he is head of the agency and it continues to be responsible for the enforcement of the legislation no person caught smuggling fuel will go unprosecuted. This week, three such persons are expected to be placed before the courts for being in possession of fuel which is believed to have been brought into the country illegally. Conviction, according to the legislation carries a compulsory $3 million fine together with a three-year prison sentence and forfeiture of the vehicle in which the fuel was found.
Explaining the marking system, O'Lall says that on arrival in a country a marker is put into the fuel which identifies the company to which it is consigned. When it is transferred to the road tanker, the agency adds two different markers - one which identifies the product to indicate whether it is gasoline, dieseline or kerosene and can indicate the station and company from which it is sourced - and a second called the domestic or percentage marker which detects if smuggled fuel is mixed with that which is legally imported.
O'Lall asserts that the marking system is almost foolproof as the fuel is tested using an instrument which indicates in less than a minute the rough concentration of the percentage marker. "It is accurate to plus or minus 5 per cent. We have accepted 80 per cent to allow for all kinds of human error. But if you are consistently tested at 80 per cent then another instrument is used which is accurate to plus or minus 0.5 per cent which takes about twenty minutes as it uses a different technology."
He says too as a reassurance to members of the public who believe that the marker has been sold for it to be sold that the person would have to be a Houdini to bypass the system which the agency has in place.
"Even if he sells the marker our system here does not allow one person to be in contact with all four markers - the company marker, the product marker, the percentage marker and the marker which identifies fuel as duty free."
So to beat the system a person would have to get at least three of the four markers "and you know every time you buy from a new person the probability of "screeling" increases."
"So I am not saying for one moment that it cannot be stolen ... it is possible but not probable."