Gov’t discredits Hydro Power comparison made by APNU, AFC

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The Government last evening issued a statement debunking claims made by members of A Partnership for National Unity (APNU) and Alliance for Change (AFC), as it relates to the controversial Amaila Falls Hydro Project.

In an article published by Kaieteur News on Sunday, Opposition members Joseph Harmon and Khemraj Ramjattan presented a Pakistani hydro project as comparable to Amaila.

In response, the Government stated that Pakistan’s Hydro Project cannot be compared to the Amaila Falls Hydro Power Project.

According to the statement, the Pakistani project, called the Patrind Hydropower Project, could not be more different than Amaila.

“The result is yet another example of the Opposition trying to use apples-to-oranges comparisons to purposefully mislead the Guyanese people.”

Below is what the government had to say about the two projects:

Here are the simple facts, which had the Opposition members bothered to research might have steered them away from making such a blatantly incorrect comparison:

1)        The cost of a transmission line is not included in the Pakistan project cost.  For Amaila, this cost is approximately US$ 155 million.

2)        The cost of an access road is not included in the Pakistan project cost.  This cost is estimated at approximately US$ 30 million for Amaila.

3)        The Pakistan project’s cost is actually estimated at US$ 436 million and not US$ 362 million as presented by the Opposition members.  This is based on an UNFCC project design document dated December 17th 2012, “the capital cost required for the Patrind Hydropower Project is currently estimated at US$ 436 million or approximately US$2.9 million per MW installed capacity.”

The UNFCCC’s Secretariat has conducted thorough research on the project as part of registering the project under one of its clean energy development mechanisms.

4)        The project is “low tech” when compared to Amaila.  The Pakistani project uses simpler technology called run-of-river because of its natural conditions.  A run-of-river hydro project is cheaper to construct than a normal hydro because it does not require the significant civil-engineering works such as the construction of an underground tunnel, which is a sizable portion of construction cost.  Amaila will have a three (3) kilometer underground tunnel from the reservoir to the turbines, whereas the physical conditions of the Pakistan project does not require such a tunnel.  The cost of constructing the Amaila power tunnel and headract tunnel is approximately US$ 85 million.

5)        In addition, because the Pakistan project is a run-of-river project, it has a small reservoir—56 hectares vs. Amaila’s reservoir of 2,330 hectares—a metric that clearly shows the complete difference in hydro-dam type of the two projects and why they should not be compared.  We will not try to estimate the increased cost for clearing the larger reservoir, although this is obviously a factor for the cost comparison.

6)        The Pakistan project benefits from concessional financing.  According to the aforementioned UNFCC project design document, “the fact that the financing for such huge projects in Pakistan is difficult is evident as the multilateral banks (MLBs) are willing to consider the financing for the project below a competitive margin of 4.75%… If same project would have to be financed based on local sponsors and no Certified Emission Reduction revenue, the MLBs would not have agreed on such terms given the risk profile of the country and local sponsors.”

7)        Longevity – the power generating equipment of the Pakistan projected is expected to last for 30 years.  Amaila’s equipment on the other hand is expected to last 50 years, and if well maintained with proper major maintenance overhauls, 75 to 100 years.  Obviously longer lasting equipment will command a premium.

Aside from taking into consideration the facts specific to the two projects, the Opposition members failed to, purposefully or not, reveal to their audience the large difference in the settings in which these two projects are being developed.  Pakistan currently has 21 hydropower plants that are providing energy to its national grid.  As a result, Pakistan has extensive experience in building and operating hydros, giving that country certain advantages, such as in-country expertise, on-going relationships with hydro developers, etc.  In 2011, Pakistan had a total hydro installed capacity of 6,720 MW.

Guyana on the other hand is in the process of developing its first hydro.  This is the first time Guyana is able to tap its large water resource to deliver power to its citizens.

However, the Opposition seems to be pulling out all stops to try to prevent this, even if it means distorting the facts and telling the public that they should continue to wait for hydropower by presenting false comparisons.

It is terribly ironic that the Opposition is making a case for the Guyanese public to wait for hydro by presenting a misleading comparison to a hydro in Pakistan, a country which has had over 100 MW of installed hydro capacity since 1958.  The public cannot fall for that.

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