HomeUncategorizedAs electricity gets cheaper, President Ali wants electric vehicles manufactured in Guyana
As electricity gets cheaper, President Ali wants electric vehicles manufactured in Guyana
February 11, 2024
The cost of electricity in Guyana is expected to reduce significantly by 2025 as the Wales gas-to-energy project becomes operational and the country’s President Dr. Irfaan Ali believes that local investors should explore how electric vehicles can be manufactured locally.
Natural gas found in the lucrative Stabroek Block offshore Guyana will be used to fire at a 300-megawatt (MW) power plant at Wales on the West Bank of Demerara.
For years, the Irfaan Ali administration has been saying that this project will slash the cost of electricity in half, thereby giving ordinary consumers more disposable income and stimulating the growth of businesses, including manufacturing ventures, in Guyana.
Manufacturing is a huge focus as part of plans to diversify the local economy. This sector has been hamstrung for decades because of the exorbitant cost of energy generated primarily from imported fossil fuels.
President Ali told private sector stakeholders last week that the government is keen on developing this sector once there is cheaper electricity.
“We’re going to go out to look at a number of facilities in the manufacturing sphere of things that we can bring to Guyana,” President Ali said during an address at the Private Sector Commission’s Annual Dinner last week.
And one venture in the manufacturing sector the President wants the local private sector to seriously consider is making electric vehicles (EVs) locally.
“If you can sell an EV that is manufactured in a carbon-negative country, it opens up opportunities on the marketing side,” Dr. Ali emphasised.
He argues that the purchasers of EVs, at least right now, are primarily those who are conscious of their carbon footprint and would prefer to use vehicles with fewer harmful greenhouse gas emissions.
He believes those buyers interested in “social consciousness” would be more inclined to purchase EVs from a country with a good environmental standing, like Guyana.
President Ali and Vice President Dr Bharrat Jagdeo are among those officials who have been touting Guyana’s environmental credentials internationally for years.
Guyana’s intact forests cover about 85% of the country’s landmass. For illustrative purposes, the area of Guyana covered by the forest is equivalent to the area of England and Scotland combined. They help to trap carbon dioxide, one of the harmful greenhouse gases that contribute to climate change and bring about extreme weather events such as fires and flooding.
President Ali believes these credentials can almost automatically position Guyana as a more trusted supplier should it develop this EV manufacturing venture.
“…You can find partners in China, the United Arab Emirates (UAE) and the United States (US) and come back with a proposal and you will benefit from tremendous fiscal incentives (now) and then down the line, energy will go down,” the Guyanese Head of State told the private sector stakeholders.
Already, Guyana seems to be slowly embracing EVs as the Guyana Energy Agency (GEA) introduced six EV charging stations for public use across the country last year.
Is cheaper electricity a reality?
Developing the EV manufacturing venture or the manufacturing sector rests heavily on a cheaper cost of electricity.
Much of Guyana’s electricity needs are satisfied through supply from the Demerara Berbice Interconnected System (DBIS), run by the Guyana Power and Light (GPL) Inc.
Consumers pay about 30 US cents per kilowatt hour for electricity, a figure higher than the Caribbean’s average cost. According to the World Bank, the average rate in the Caribbean is around 25 US cents per kilowatt hour.
With the gas-to-energy project, Vice President Jagdeo has said that electricity can be generated at a cost of about five US cents per kilowatt hour. Even with a reasonable markup, electricity rates would be much lower than is currently charged.
President of ExxonMobil Guyana, Alistair Routledge last week told reporters that the company and its coventurers, Hess and CNOOC, will be drilling at least five more wells in the Stabroek Block this year to determine exactly what natural gas resources are available.
The consortium led by ExxonMobil is currently producing at least 640,000 barrels of oil daily at that Block and production is set to ramp up to 1.2 million barrels per day by 2027.
Already though, ExxonMobil has been delivering on its end of the gas-to-energy deal; that is, constructing the pipeline that will bring the gas from the Liza I field in the Stabroek Block onshore to Wales. That pipeline is roughly halfway completed and should be ready to connect to onshore facilities by year-end.
But President Ali also told the private sector players that the planned 300 MW might not be sufficient for the government’s development plan for Guyana.
“Based on our assessment, the power plant that we are engaged in now from the natural gas will be inadequate for the type of development that will come our way… (and) for the type of investment that will come to Guyana,” he said.
So, a second plant is already being considered and that venture adds to the government’s plan for a massive hydropower plant that generates electricity from the Amaila Falls in Region Eight (Potaro- Siparuni) and solar projects in various locations.
Hunt for lithium
There is another piece of the puzzle that Guyana hopes it can find, and find quickly. That is lithium.
This metal is used in the massive batteries that EVs have. It is also used in the batteries that accompany some solar panel projects.
In January, a $400 million sum was also approved for the Natural Resources Ministry, as part of the 2024 National Budget, to engage in the first phase of a long overdue “mineral mapping” exercise.
The $400 million will help the ministry conduct the exercise in three main mining districts: Mazaruni, Puruni and the Northwest District. Aside from pinpointing where more gold and diamond deposits are, the government hopes it can also find lithium.
“(Lithium) is a much-sought-after element around the world and we know that there are a few countries around South America producing lithium and we believe that it may be here too,” the Minister of Natural Resources Vickram Bharrat told the National Assembly recently.
Should Guyana find lithium, that will act as further impetus for the manufacturing of EVs in Guyana. The venture is certainly one that the President is keen on.
“All of this will allow us to bring industries of the future,” President Ali said during his address at the dinner.