Guyana’s demand for electricity grew 18% in the five years to the end of 2015. That growth, plus the volatility of fossil fuel prices, highlights the country’s need for a renewable energy policy framework. Its renewables policy is limited to tax incentives.
Guyana’s electricity market is controlled by the state-owned Guyana Power and Light (GPL), a vertically integrated company responsible for electricity distribution, transmission and part of the country’s generation portfolio. The power market includes independent power producers, which must sell their electricity to GPL.
The Guyana Energy Agency (GEA), is responsible for developing a national energy policy and its implementation, as well as making recommendations to ministries concerning energy management and encouraging the development of renewable energy sources. Guyana relies mostly on power generation from fossil fuels. In 2015, 85% of its total 203MW of installed capacity was fuel oil and diesel, which is imported and subject to price volatility. Biomass accounted for the remaining 15% of the installed capacity. Average retail electricity rates in Guyana are among the highest in Latin America and the Caribbean.
The government of Guyana is developing a strategy for the introduction of renewable energy technologies as part of a plan to diversify its electricity mix. A special focus will be on wind, solar and small hydro. Guyana Sugar Corporation (Guysuco) operates a 30MW biomass plant using sugarcane bagasse, 10MW of which dispatches power to GPL’s grid. The government has plans to enhance the power plant’s capacity and increase electricity generation. Guysuco also operates the country’s first ethanol plant, which was commissioned in August 2013, and uses sugarcane molasses as a feedstock and is capable of producing 365,000 liters of ethanol per year.
Approximately 82% of the country’s 0.8 million population is connected to the grid, with the highest concentration in urban areas. To help increase access to electricity among the rural population, the government launched several initiatives, most of which promote the use of photovoltaic installations supplied by small-scale private companies. The Hinterland Electrification Program (HEP) was created in 2005 under the Unserved Areas Electrification Program and installed 11,000 65-Watt photovoltaic solar home systems from 2011 to 2014. As of January 2015, 200 communities had benefited from the HEP.
Since 2012, the government of Guyana has exempted machinery and equipment that generate or utilize power from renewable sources from value-added tax and import duties. This is the only renewable energy incentive in force. In May 2016, the government of Guyana submitted its revised Intended Nationally Determined Contribution (INDC) to the United Nations, outlining conditional and unconditional policies and measures to reduce emissions from the forest and energy sectors.