Drought presents challenges but not fatal to hydro development – Jagdeo

– says hydropower outcompetes wind energy, solar energy as base load

Recognising that drought conditions pose certain challenges, Vice President Dr Bharrat Jagdeo believes these would not be fatal to hydropower development in Guyana.
Currently, Guyana’s South American neighbour – Suriname – is on the brink of what has been described as a “severe power crisis” after critically low reservoir water levels have caused the Dutch-speaking nation’s hydroelectric power station to experience a reduction in output.
The People’s Progressive Party/Civic (PPP/C) Administration has been keen on reviving the 165-megawatt (MW) Amaila Falls Hydropower Project (AFHP) which has been on the cards since 2011 but was blocked by the APNU+AFC (A Partnership for National Unity+Alliance For Change) Coalition both in and out of office.
During his weekly press conference on Thursday last, Jagdeo was asked about Government’s plans to update its hydrology studies including climatic predictions before investing in any such large-scale hydropower project.
According to the Vice President, “…you have to, out of necessity, look again at hydrology [and] hydrology risk. But the model also, that we have pursued in the past, and we intend to pursue places the risk to some extent, on the investor because they will not be paid for energy. They may be paid for capacity, but not energy, for the period when they don’t supply power. And since that facility will not be owned by the Government of Guyana, then we share the risk… But clearly an investor, if they’re coming in to invest and needs a sort of return to justify the investment, they would have to examine that [risk] themselves to see because it’s their money that they’ll be using.”
As the Guyana Government looks to revive the Amail Falls Hydropower Project, it has been adamant about doing so under a Build-Own-Operate-Transfer (BOOT) model to lessen the investment risks on the State.
While the Vice President acknowledged that climate change has posed challenges for hydropower development, he believes that this is still a viable energy source.
“I don’t think you can stop building hydros globally… You have the challenge of more variable weather patterns globally so I think this will impact on water supply… This will have implication for reservoir size and your backup capacity. So, if you build it and you have a period where you have drought then you have to have adequate backup power to fill the energy demand of the country in the period when you have the drought. So, [drought] does present challenges, but I don’t see it as fatal to the development of hydropower. But of course, when you develop it, you have to ensure that your studies are done and updated,” he posited.
Jagdeo went on to point out that not only is hydropower more cost-effective but also more stable than other energy sources such as solar and wind.
“I don’t think you can beat hydropower at this stage in terms of cost and being base load at the same time. Notice I said base load, because you can get maybe solar power cheaper, but it’s not base load and what I mean [is that] it doesn’t run 24 hours a day continuously. If you put in the batteries [for solar], then the cost goes up significantly. So, if you do a grid tie-in system, you might get it fairly around the same price as the hydro, but that means you can only get it in sunlight when there is sunlight. If you go to put in batteries the cost goes up significantly. So, hydropower, at this point in time, today, will out-compete wind energy and solar as base load, and still be competitive in terms of price of energy,” he contended.
The 165-megawatt (MW) AFHP was the flagship initiative of the Bharrat Jagdeo-crafted Low Carbon Development Strategy (LCDS). However, the project failed to take off despite having a developer in United States-based Sithe Global, which was backed by investment major – The Blackstone Inc.
In August 2013, Sithe Global announced that it was pulling out of the project, which it said was too large to continue without national consensus, and had cited the lack of consensus in Parliament. At the time, the then APNU and AFC oppositions, holding majority seats in the National Assembly, had both voted down key pieces of legislation which consequently halted the project.
Then during its term in office from 2015 to 2020, the APNU/AFC Coalition Administration again shelved the project.
The revival of the 165-MW hydropower project was one of the promises made by the ruling PPP/C in its 2020 Manifesto. In November 2021, the AFHP was awarded to China Railway First Group (CRFG) in November 2021 but those talks fell through after the company wanted to change the BOOT model which Government rejected.
A revised Request for Proposals (RFP) was issued in 2023 and four companies – Rialma S.A. (Grupo Rialma) from Brazil; China International Water & Elec. Corp; Lindsayca CH4 Guyana Inc., and a group made up of OEC, GE Vernova and Worley – had submitted tenders to be pre-qualified for the Amaila Falls Hydro project.
However, last month VP Jagdeo told the Guyana Times that Government would have to re-tender the project after much attention was not placed on the bids that came in.
“We didn’t focus on it [so] we’d have to re-tender that project,” he stated. While this project would now roll over to the PPP/C’s 2025 Elections Manifesto, Jagdeo, who is also the General Secretary of the party, explained that it is part of a continuous energy mix that his Government is pursuing.
“What we’ve committed to is an energy mix that is sustainable and hydropower is part of that energy mix so it has to be part of our ongoing plan. So, it is a combination of gas, wind, solar and hydro – that’s the energy mix of the future. Clearly, we’re moving to the gas, which you saw will cut our emission profile. We’re doing some solar. We’re examining some wind but for smaller communities, and hydro will be a part of it. So, [the AFHP] will have rollover as part of our commitment to a cleaner energy mix for the future as part of our energy transition,” the Vice President told this newspaper at a January 2 press conference.