The Inefficiency of Powerships: A Costly Burden on Guyanese Taxpayers
The government of Guyana recently announced its decision to rent another powership to alleviate the country’s persistent electricity shortages. Operated by the state-owned Guyana Power and Light (GPL) Inc., this decision mirrors a previous venture involving a powership from a Middle Eastern country—a project that failed to deliver the promised results. While touted as a “quick fix,” the strategy raises significant concerns about cost, efficiency, and sustainability, leaving taxpayers questioning the prudence of this approach.
The Cost of Powerships: An Exorbitant Burden
Powerships are essentially floating power plants designed to supply electricity by burning fossil fuels such as heavy fuel oil or natural gas. Renting a powership involves substantial upfront costs for procurement, delivery, installation, and integration into the local grid. Estimates suggest that leasing a single powership can cost anywhere from $70 million to $100 million annually, not including fuel expenses and operational costs.
In the previous powership arrangement, integration delays further exacerbated the financial burden, with the government spending millions while the ship remained idle. Despite these investments, the nation’s electricity woes persisted, with frequent outages disrupting households and businesses.
For the current powership venture, the government has once again committed substantial funds. While specific figures for this contract have not been disclosed, if past expenditures are any indication, the cost is likely to be similarly exorbitant. Taxpayers bear the brunt of these expenses, with no guarantees of improved service.
Inefficiency in Addressing Power Shortages
While powerships are marketed as rapid solutions, their actual implementation often tells a different story. In the case of Guyana, delays in connecting the powership to the national grid significantly undermined its utility. Even after the connection was established, the powership’s output proved insufficient to meet demand, perpetuating the cycle of outages.
Additionally, powerships—being reliant on fossil fuels—are inherently less efficient than modern alternatives such as renewable energy sources or high-efficiency combined-cycle power plants. Heavy dependence on imported fuels not only increases operational costs but also makes the country’s energy supply vulnerable to price fluctuations in the global oil market.
Environmental and Long-Term Implications
Powerships’ reliance on fossil fuels also raises environmental concerns. Burning heavy fuel oil releases significant quantities of carbon dioxide, sulfur dioxide, and other harmful pollutants. This approach conflicts with global trends toward renewable energy and carbon neutrality, positioning Guyana as an outlier at a time when sustainable solutions are more viable than ever.
Furthermore, the government’s two-year plan to rely on powerships risks becoming a prolonged dependency. Without clear benchmarks or timelines for transitioning to a sustainable energy infrastructure, these “quick fixes” may become permanent fixtures, locking the country into a cycle of inefficiency and high costs.
Exploring Better Alternatives
Instead of investing in powerships, Guyana’s government could pursue more sustainable and cost-effective solutions that promise long-term benefits. Here are some viable alternatives:
Expanding Renewable Energy Projects:
Guyana’s geography makes it well-suited for renewable energy, particularly hydropower, solar, and wind. The country’s abundant rivers provide ample opportunities for hydropower development, which is both sustainable and cost-effective over the long term.
A case study from Costa Rica highlights how a focus on hydropower, coupled with solar and wind, enabled the country to generate over 99% of its electricity from renewable sources. Similar initiatives in Guyana could reduce dependence on fossil fuels and stabilize electricity supply.
Distributed Solar Systems:
Implementing rooftop solar programs for households and businesses could alleviate demand on the national grid. By offering tax incentives or subsidies for solar panel installations, the government could empower citizens to generate their own electricity while reducing reliance on centralized power sources.
According to the International Renewable Energy Agency (IRENA), the cost of solar photovoltaic systems has dropped by more than 80% since 2010, making it an increasingly affordable option.
Modernizing Existing Infrastructure:
Much of Guyana’s electricity infrastructure is outdated, leading to significant transmission and distribution losses. Upgrading transformers, substations, and grid lines could improve efficiency and reliability without the need for costly powerships.
Studies show that improving grid efficiency can save up to 20% of generated electricity, translating into substantial cost reductions.
Energy Storage Solutions:
Investing in battery energy storage systems (BESS) would allow Guyana to store excess energy generated during off-peak periods for use during high-demand times. Countries like Australia and the United States have successfully implemented large-scale battery projects to enhance grid stability.
While initial investments in energy storage can be high, operational savings and increased grid reliability often offset these costs over time.
Natural Gas Power Plants:
As an interim solution, developing high-efficiency natural gas power plants using locally available gas resources could provide a cleaner and more cost-effective alternative to powerships. These plants can serve as a bridge technology while renewable energy capacity is built up.
Combined-cycle gas turbine (CCGT) plants are known for their high efficiency, with some achieving efficiency rates exceeding 60%.
A Call for Transparency and Accountability
To address public concerns about the current powership strategy, the government must adopt a more transparent approach. Citizens have the right to know the full financial implications of these contracts, including rental fees, fuel costs, and expected outputs. Clear timelines and measurable goals for transitioning to permanent energy solutions should also be outlined to ensure accountability.
Additionally, the government should engage with stakeholders, including energy experts, environmental groups, and the business community, to develop a comprehensive and inclusive energy strategy. Public consultations can help build trust and foster a sense of shared responsibility for the nation’s energy future.
While powerships may offer an immediate boost to electricity supply, their high costs, inefficiency, and environmental impact make them an unsustainable solution for Guyana’s energy challenges. By reallocating resources toward renewable energy projects, infrastructure modernization, and energy storage, the government can achieve more sustainable and cost-effective outcomes. Such an approach not only benefits taxpayers but also positions Guyana as a regional leader in clean energy, paving the way for a brighter and more sustainable future
