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Guyana (2012)

Source: REEEP Policy Database (contributed by SERN for REEEP)

This policy & regulatory overview is not updated anymore since 2015. We decided to keep it online due to high demand but would like to make you aware of the fact that it might be outdated.

Energy sources

Total installed electricity capacity (2010):  164.3 MW
Heavy fuel oil (includes 10 MW of IPP): 79.1 MW
Diesel: 85.2 MW

Total primary energy supply (2006): 579.6 toe.

The national electricity utility, GP&L, currently has generation capacity of between 110 MW to 130 MW, and experiences severe problems with reliability. The customer demand often exceeds this capacity and causes several blackouts. In response to this, several businesses in Guyana now have self-generation, which is estimated to be 70 MW.
 

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Reliance

Guyana’s main supplier of electricity generation is highly dependent on petroleum. Approximately 98% of GPL electricity generated is from petroleum, with 2% generated from biomass.

Imported oil is sourced mainly from Venezuela and Trinidad and Tobago. In 2008 the value of petroleum products was US$410.1 million, 26.8% above the import value of US$320.9 million in 2007. The import volume decreased to 3.7 million barrels in 2008 from 3.9 million barrels in 2007. The value of petroleum imports represented 31.3% of the value of Guyana’s merchandise imports in 2008, compared to 30.2% in 2007. The value of petroleum imports in 2008 was 43% of Guyana’s GDP, compared to 38% in 2007.

Guyana’s economic growth is constrained, due to this heavy reliance on costly imported petroleum products. While abundant sources of renewable energy exist in the country (hydro, solar, wind and biomass), there has been little investment and development of these alternatives.

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Extend network

Electricity coverage in Guyana is 81%, whereby there is electricity coverage for over 90% in the coastal zone, where 90% of the population is concentrated. The sustainable electrification of the hinterland to supply approximately 70,000 Amerindian residents in 170 communities in four regions remains a challenge. Few Amerindian communities have diesel power electricity generation and others have recently received electricity from solar PV technologies. Under the Low Carbon Development Strategy (LCDS) the Government of Guyana expects to expand the hinterland electrification of rural communities using solar-PV systems.
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Capacity concerns

Guyana’s total installed capacity is hardly enough to cover the current demand for electricity. Demand for electricity from residential, commercial and industrial consumers has steadily risen while supply capacity has remained roughly flat. GPL has undertaken a development and expansion program to meet the increased demand. Reliability of electricity supply is also a problem; consumers experience frequent and long outages, load discharges and voltage variations. Distribution losses amount to roughly 40%. Corruption at billing level, in combination with faulty meters, has lead to high commercial losses also.

Guyana has been trying to diversify its generation mix. However, there is still a lack of understanding of local needs, demands and potential for technological transfer, among other critical technical areas. Unfortunately, this problem is compounded by a shortage of comprehensive information on new technologies.

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Renewable energy

Solar energy
Guyana is located near the equator and receives a daily average radiation of about 5 kWh/m2/d on horizontal surfaces. As such, for many years, solar energy has been used for several purposes such as drying agricultural produce and for electricity production. In several hinterland communities, solar energy is used for water pumping, 2-way radio transmission and telecommunication and electricity.

Hydropower
Several sites have potential for hydro-power development. Most of them were studied during the 70’s and 80’s by Monenco, Sweco and others. Monenco’s study identified 67 potential sites with a total output capacity of 7,000 MW, and an estimated capacity at sites ranging from a few kilowatts to over 2,000 MW.

Wind energy
Wind energy has been used along the coastline for battery charging, and in the hinterland areas for water pumping.  However, many of the wind chargers fell into disuse as diesel produced electricity became more reliable, whilst wind pumps fell into a state of disrepair due to a lack of replacement parts and expertise to maintain the equipment. Long term wind flow measurements are required to assess the technical feasibility of large wind farms. 

Biomass energy/Biofuels
Guyana has significant experience in using biomass and biofuels in electricity generation. Today, there is large scale electricity generation at each sugar estate from burning bagasse and raising steam which is fed to turbines. Sugar cane bagasse or rice husk stand as potential options for additional power generation. Both residues can be used as alternative low carbon technologies and could be used to replace back-up thermal capacity of future Hydro projects. The first experience in co-generation in Guyana was Guysuco’s Skeldon Cogeneration Project (8.0 MW available).
 
Geothermal energy
Whilst Guyana is involved in exploiting the Nevisean geothermal reserve, no attempts are currently being made to assess or utilise indigenous geothermal resources.

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Energy efficiency

The high rate of distribution and commercial electricity losses in the country suggests the need for improved efficiency in all parts of the electricity service sector. Ageing equipment and under-investment in modern grid technology leads to frequent power shortages and losses in the country. An improved distribution network would save large amounts of electricity from being wasted.

Residential consumption accounts for the largest proportion of total final consumption in the country, suggesting the need for more energy-efficiency measures in the sector.

The World Bank is supporting an Energy Efficiency Project for the Guyana Water Inc (GWI). The program aims to facilitate the attainment of sustainability of electricity tariffs through a more rationalized use of energy. Smaller programs of EE and awareness are being implemented for residential users.

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Ownership

Guyana Power & Light Inc. (GPL, www.gplinc.com/) is the main official supplier of electricity in Guyana, with its franchise area encompassing the three counties of Demerara, Berbice and Essequibo.

GPL’s operations comprise generation, transmission and distribution. GPL’s license covers almost the entire country with the exception of a medium-sized municipality located in Linden, approximately 100 km from the coast, and any other area in which a secondary local supplier is licensed to operate. GPL also operates several isolated systems in the coastal area. GPL’s systems total 160MW of nominal installed capacity and supply approximately 151,000 customers.

GPL generated approximately 575 GWh in 2010. This energy was mainly consumed by the residential sector (168 GWh), followed by the commercial sector (72.3 GWh) and small (32.1 GWh) and large industrials (95.7 GWh). About 31.5% of the electricity generated in 2010 was considered losses. GPL’s plans to substitute Light Fuel Oil burning units by Heavy Fuel Oil (HFO) and hydro generation. Hydro generation is expected to provide 154 MW of additional power capacity to GPL.
 

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Competition

GPL is a vertically-integrated and Government owned utility with exclusive rights for distributing and non-exclusive rights for generating electricity throughout Guyana.

Independent Power Producers (IPPs) own and operate 45% of the installed generation capacity, which is thermoelectric. IPPs are mainly large corporate firms that generate power for their own needs and sell excess capacity to the national grid. In the last few years, there have been formal efforts to enhance the relationships between IPPs and GPL; these include co-generation projects, plans for Power Purchase Agreements (PPAs), and explicit interest Government interest in renewable energy projects. The expectations for capacity growth are reliant on the participation of these independent producers.

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Energy framework

Energy experiences of the recent past, high oil prices and its potential unavailability, have heightened the need for energy security in Guyana. Another pressing factor has been the provision of basic electricity services to isolated and distant communities. Guyana has responded by implementing a number of measures and projects to address these concerns. Based on the energy policy of Guyana, the national goals from 2004 are:

  • To provide a stable, reliable and economic supply of energy
  • To reduce dependency on imported fuels
  • To promote, where possible, the increased utilization of domestic resources
  • To ensure energy is used in an environmentally sound and sustainable manner
  • This led to several projects including, but not limited to:
  • Rural electrification
  • Diversification of energy supply, with emphasis on local inputs
  • Development of renewable energy
  • Energy conservation and efficiency.

These projects have led to the mitigation of climate change, by reducing energy consumption, while generating energy from cleaner sources.

Since the emphasis is on reducing the use of imported fuels, replacing such fuels has led to reductions in harmful emissions. In many cases, there have been less harmful substitutes in the form of wood-waste, rice-husk and bagasse. In other cases, substitution has occurred by way of alternate energies and biofuels such as hydro, solar and biodiesel. Guyana’s responses are well in line with the terms of reference for the Caribbean Renewable Energy Development Programme (CREDP) study presented to the Prime Minister in 2009.

The existing policy is dated, with a strong bias towards indigenous resources and a reduced reliance on imported fuels. Since this represents a move away from hard fossil fuels, it does support reduced emissions and, by extension, mitigation against climate change. In 1998, the energy mix projected was: indigenous resources 53.7% and imported petroleum products 46.3%. A 26% reduction in the amount of imported petroleum products was forecasted for 2004. However, as of 2008, the use of imported fuels stood at 70% and indigenous resources at 30%. Given the changes in the energy industry and the governmental strategy over the last few years, it is critical that this policy be now updated.

Education is being used as the primary tool to promote energy conservation and more energy-efficient equipment, however, there are no specific targets set for the reduction in consumption. Co-generation is also being implemented in the sugar industry. In recent times, it has been primarily for internal use but additional capacity is being fed to the national grid.

The Office of the President has recently launched a Low Carbon Development (LCD) strategy as part of its mitigation effort, which is an example of how Guyana is approaching its energy strategy. This effort is being led by the advisor to the president. This LCD strategy intends to use three components to deliver its objectives:

  • Agriculture
  • Forestry
  • Alternate energy
     
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Energy debates

Guyanese energy policy has not received any major amendments since 1999, when the Electricity Sector Reform Law was passed, detailing further responsibilities of the GPL and the processes for the setting of tariffs and extension of electricity to new customers. Concern of late in the sector has been in matters of reducing technical losses, with no further reforms currently planned.

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Energy studies

Government of Guyana: Hinterland, Electrification Strategy.
Available at http://www.electricity.gov.gy/Hinterland%20Electrification%20Strategy.pdf

Guyana is the host country of the Caribbean Community secretariat, and is also a member of the Caribbean Information Platform on Renewable Energy (CIPORE).

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Role of government

The Government has retained the responsibility for energy in the portfolio of the President. He holds all the ministerial responsibilities for policy and national planning. The Government has, however, created a quasi-government agency called the Guyana Energy Agency (GEA) (www.gea.gov.gy). This agency works with other ministries, the Office of the Prime Minister and the Public Utilities Commission (PUC) to coordinate the energy portfolio.

Ministries and agencies that play an important role in energy and climate changes are:

  • GEA
  • Office of the President
  • Office of Prime Minister
  • PUC

Guyana Energy Agency (GEA)
The GEAs mission is:
“To ensure the rational and efficient use of imported petroleum-based energy sources, while encouraging, where economically feasible and environmentally acceptable, increased utilization of indigenous new and renewable sources of energy.”

As part of its mandate, there is a specific focus on non-conventional energy management. The relevant published functions and responsibilities are to:

  • Research the various energy technologies, both locally and internationally
  • Develop a database of renewable energy technologies and disseminate the information, as deemed appropriate
  • Develop energy conservation programmes
  • Conduct relevant renewable energy studies in order to compile information and to recommend appropriate project designs
  • Monitor government agencies and private sector renewable energy projects/activities for optimum use, efficiency and cost-effectiveness
  • Actively liaise with various agencies in order to promote renewable energy as a clean technology, that will aid in the reduction of greenhouse gas emissions
  • Work in collaboration with other agencies, to reduce the effects of climate change and to assist in the development of mitigation and adaptation plans
  • Develop renewable energy projects and briefs aimed at attracting financing and investors.

Office of the President
A senior advisory function in the Office of the President is to provide guidance at a national policy level, in the area of the environment and climate change. The policy decisions are supported by GEA work and individual ministries. This is true, in general, and specifically for matters relating to climate change.

Office of the Prime Minister
The Office of the Prime Minister is responsible for a number of local issues in Guyana. It has principal policymaking and regulatory responsibility for the energy sector, which includes:

  • Issuing licenses to public utilities and independent power producers
  • Approval of development and expansion plans
  • Establishing operating standards and performance targets for Guyana Power and Light (GP&L)
  • Electrification of the hinterlands and other rural interior areas.
     
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Government agencies

The Environmental Protection Agency (EPA) is responsible for drafting environmental regulations, enforcing compliance of sector operations with environmental laws and regulations, and advising OPM and Office of the President of the Republic on the public suppliers' environmental audits and management plans.

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Energy procedure

To extend the national grid the Government developed the Un-served Areas Electricity Programme (UAEP). The UAEP was developed by the OPM, GPL and IDB, and is being funded by the IDB and the Government for a sum of UD$34.4M. The project is being implemented over a five year period from 2004 to 2009.

Since the UAEP was focused on the GPL grid, the Government developed the Hinterland Electrification Strategy and the IDB was approached for funding. This Hinterland Electrification Strategy details the rationale behind the strategy, the communities to benefit and the type of electrification system to be implemented. It also detailed cost and cost analyses, cost recovery systems, operation and management of the systems over the next 3 years.

Current GPL plans are to reduce technical losses in the electricity grid to roughly 15% by the end of 2010.

Energy Access at community level for MDG achievement in Hinterland area (2010-2012)
In Guyana, about 100.000 persons living in Hinterland areas have little access to reliable energy services which they could afford. They will not be connected to the electricity grid immediately because of the remoteness of the area, their insufficient financial capacity to pay for energy services, and the prohibitive cost of expanding national grid to these areas.

The present project aims at enhancing local and national capacities for expanding access to reliable, clean and affordable (lowest possible cost) energy services in hinterland villages for MDG achievement (especially gender equality) by 2015. This will be achieved by demonstrating impacts of access to energy services on MDG achievement at local level and in support of the Government of Guyana’s “Unserved Areas Electrification Programme” by building capacity at local, regional and national levels, by mainstreaming energy issues into local, regional and national plans and strategies, and by gathering partners and mobilizing fund to finance and implement the energy access strategy for hinterland area.

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Energy regulator

The PUC is responsible for monitoring and enforcing operator compliance with standards and targets set by the Office of the Prime Minister. As a result, PUC advises the Office of the Prime Minister on these issues. It also determines and approves tariffs charged by public suppliers.
 

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Degree of independence

The OPM is a Government body, directly responsible to the Prime Minister. Funding is 100% Governmental.

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Regulatory framework

The laws that directly influence the energy sector are:

  • Electricity Sector Reform Act 1999 (ESRA), Guyana
  • Energy Agency Act 1997 (GEA),
  •  Public Utilities Commission Act 1999 (PUC),
  •  Hydro-Electric Power Act 1956,
  • Petroleum (Exploration and Production) Act 1986,
  • Guyana Forestry Commission Act 1979,
  • Energy Sector (Harmonisation of Laws) Act 2002,
  • Environmental Protection, Act 1996.
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Regulatory roles

The regulatory roles of the OPM are granting licences to the public utilities and independent power producers, and approval of development and expansion plans, and of operating standards and performance targets, for Guyana Power & Light Inc. (GPL), the principal supplier. National energy policy is under the purview of the GEA, but requires approval from the OPM before implementation.

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Energy regulation role

The Public Utilities Commission is responsible for monitoring and enforcing operators' compliance with commitments emanating from licenses and standard terms and conditions for operations, including operating standards and performance targets and development of expansion plans; handling consumers' complaints; and advising OPM on these issues. PUC also is responsible for determining and approving tariffs charged by public suppliers, even though in GPL's case, tariffs are determined by a rate-setting formula incorporated into GPL's license and the First Schedule of the 1999 Electricity Sector Reform Act (ESRA).

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Regulatory barriers

There is a need for effectiveness of regulation. Most Caribbean countries that have made progress in the regulation of their electricity sector have a regulatory agency empowered to set service standards and tariffs. In Guyana, the regulator seems to have considerable legal, personnel and financial constraints, all of which limit its ability to fulfil its role. Establishment of a privately-financed, non-governmental regulatory body is a vital first step to unbiased energy regulation.

National energy policy in the country is currently out-dated. Formulation of a new energy policy, taking into account modern advancement in renewable energy technology and the current state of the Guyanese economy, is necessary.

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References

ECLAC (2009): A study on energy issues in the Caribbean: potential for mitigating climate change.

Guyana Power & Light Co. (2009): Development and Expansion Programme. Available at http://www.electricity.gov.gy/D&E%20Programme%202010%20-2014.pdf [Accessed 28 July 2013]

UNDP (2010): Energy Access at community level for MDG achievement in Hinterland area http://www.undp.org.gy/web/index.php?option=com_content&view=article&id=247 [Accessed 28 July 2013]

IADB (2011): Sustainable operation of the electricity sector and improved quality of service. Available at http://www.iadb.org/en/projects/project-description-title,1303.html?id=gy-l1037 [Accessed 28 July 2013] Close References