Guyana - Country Commercial Guide
Renewable Energy

This is a best prospect industry sector for this country.  Includes a market overview and trade data

Last published date: 2020-10-21

The two major political parties embrace the United Nations Sustainable Development Goals.  Guyana’s previous administration signaled its intent to transition towards renewable energy by 2040 through its Green State Development Strategy in 2019.  The previous administration had created the Low Carbon Development Strategy (LCDS) in 2009 and had major hydropower and solar projects underway.

Guyana’s energy generation is largely fossil fuel-based, coming from plants utilizing heavy fuel oil.  The cost of electricity is USD 0.32 per KWH.  Power is not stable in many areas.  This high cost of electricity continues to affect operating performance for most businesses and is seen as a major challenge.  Renewable energy is a suitable solution which can address these challenges especially micro-grids for outlying regions.  The Ali administration promises to reduce the cost of power and provide reliable electricity.  The intention to reduce energy costs joined with renewable energy presents significant opportunities for private investors.  Guyana has significant potential for hydro-power, similar to its neighbor Suriname which has utilized this opportunity. Investors seeking to invest in Guyana’s renewable energy sector should contact the Guyana Office for Investment for relevant opportunities.  Additionally, the Guyana Energy Agency has completed feasibility studies and areas of potential for hydropower.  Incentives are available in the form of tax concessions.  The 2019 budget presented changes to the Wear and Tear Schedule of the Income Tax Act for capital investments in renewable and alternative energy, and further tax exemptions for hybrid or electric cars and electric motorcycles.

The Ministry of Finance published a Public-Private Partnership Policy Framework which is intended to provide for investments in priority areas, including the development of “min and maxi hydro-plants” and energy farms.  On June 8, the previous Minister of Finance signed a USD14.6 million contract with the Islamic Development Bank for a hydro project.  Guyana’s energy demand is anticipated to grow as population size and incomes increase as the oil and gas sector develops.

The challenge for potential investors evaluating renewable energy in Guyana is the current energy legislation, which allows the state-owned company Guyana Power and Light Inc, to have a monopoly over power generation.  The absence of grid-tie in legislation to allow for the resale of power to the state-owned entity may affect feasibility studies unless a Public-Private Partnership is brokered.  The Ali administration signaled intent to procure power from private firms following a series of power shortfalls in August 2020.  In the National Budget for 2019, USD45 Million was allocated to improve the energy sector.  An increase in spending on renewable sources of energy is expected following the increased revenues gained from oil. 

Subsector Best Prospects

Development of Microgrids for Outlying Regions

Industrialization of outlying regions is stymied by a lack of reliable electricity.  The population size in many outlying regions is not large but these regions have the potential to become manufacturing hubs.  Guyana Power and Light (GPL), the state-owned electricity company, loses a significant portion of power through old transmission and distribution lines.  Microgrids can provide a low-cost clean energy reducing the grid congestion and peak loads.  The new administration has signaled the development of microgrids as a priority for hinterland villages.

Development of Hydropower

The new government signaled its intent to proceed with the Amaila Falls Hydro Project.  There exists potential for other projects of similar nature in the future as Guyana seeks to transition to renewable energy.   Additionally, the energy consumption of the country is likely to increase significantly as the administration seeks to diversify the country into manufacturing and other energy-intensive sectors.

Development of Wind and Solar Farms

Guyana has tax concessions and capital write offs available for wind and solar farms investments.  Additionally, wind and solar are areas which are covered under the Public-Private Partnership Framework published by the Ministry of Finance.   Solar units are attractive for companies. Two major banks have installed solar panels and have seen a reduction in their operating expenses attributed to use of solar power.

Energy Efficient technologies

Guyana seeks to reduce its environmental impact through both the current administration’s Low Carbon Development Strategy and the previous administration’s Green State Development Strategy.  This led to various incentives being offered by the government for deployment of technologies which reduce operational costs and increase profitability for many companies.  This provides an attractive market both in industry and for the public sector.

Installation, extension and upgrading of distribution networks or provision of electricity

A major loss of electricity comes from the transmission and distribution of electricity from GPL.  GPL continues to request government assistance to survive but has begun the process of rehabilitating existing infrastructure.  The current administration seeks to upgrade distribution networks and increase power production, based on statements from the Ministry of Public Works and President Ali’s inauguration speech.

Opportunities

The Government of Guyana seeks to reduce Guyana’s energy dependence on fossil fuels.  The incumbent administration seeks to reduce the nation’s carbon footprint and signaled its intent for economic diversification through reliable energy.  The government is interested in Public-Private Partnerships.  The Guyana Energy Agency (GEA) has completed feasibility studies in areas identified as suitable for hydropower investments.  Guyana remains open to the development of smart grids, solar and wind farms, aligned with increasing efficiency and contributing to a low carbon development.

Guyana’s Energy Consumption

Electricity Consumption

2017

2018

2019

 Billion (KWH)

0.8

0.79

0.79

Electricity consumption consists of total electricity generated annually plus imports and minus exports, expressed in kilowatt-hours.

Web Resources         

Ministry of Finance: https://finance.gov.gy/

Guyana Energy Agency: https://gea.gov.gy/

Guyana Office for Investment: http://goinvest.gov.gy/

Guyana Power and Light: https://gplinc.net/

Guyana National Bureau of Standards: https://gnbsgy.org/

Ministry of Public Infrastructure: https://mopi.gov.gy/