Amaila Falls Project would be a burden to taxpayers in current configuration -Engineer Charles Ceres says mix of energy options available  

 

Georgetown, Guyana – (January 4, 2017) Civil, Geotechnical and Groundwater Hydrology Engineer, Mr. Charles Ceres has said that the Amaila Falls Hydropower Project (AFHP) would be a heavy burden to tax payers should the project be given the go-ahead in its current configuration. Mr. Ceres said that while Guyana continues to push for a ‘green’ economy and a ‘green’ footprint, Amaila, at this stage of the country’s development, is not viable and other renewable energy possibilities, such as solar, wind and biomass can be explored as cheaper and just as effective options.

Civil, Geotechnical and Groundwater Hydrology Engineer, Mr. Charles Ceres

Providing his professional opinion after studying the ‘Review of the Amaila Falls Hydropower Project in Guyana’ Report, which was done by Norconsult, a Norwegian engineering and design consultancy firm, the Geo-Technical engineer said that the flaws and risks, which have been pointed out by the independent review are significant and fatal and negate the efficacy of the development of this site. He noted that the Government is correct in its position that the several risks and flaws in the design of the project, which have been identified, will threaten its long-term effectiveness and prove too costly and burdensome to the people of Guyana and the country as a small developing state.

“The question is; do we need Amaila at this stage? I think it is an onerous burden on our resources to spend that kind of money on Amaila Falls when we can spend less money for the same volume of power. What we need at this stage of our development is more power and more power should come from a mix of resources that are readily available to us. We can still achieve our ‘green’ economy. It doesn’t compromise that objective and for us to move to Amaila is too costly. It is a burden on taxpayers… I think that we are staring down the barrel of a potential Skeldon II project again and I don’t think that we should be doing that. The way that the project is currently configured it is not viable… Amaila Falls will put us on the world stage in terms of our ability to say that we are generating hydropower but at the end of the day, Amaila doesn’t satisfy the power demands of our country because as the report says, we would have to build a second hydropower plant by 2025,” Mr. Ceres said.

Findings of the Report

Speaking directly to some of the issues, which were identified by Norconsult, Mr. Ceres said that the matter of an absence of any sediment handling methodology in the design of the plant is a ‘fatal flaw’.

“There is no provision in the design for the removal of sediment from the reservoir. So it is conceivable that we can have a reservoir, which is filled with sediment by the time this project is handed over to Guyana. So where there is this claim that we are going to have access to free electricity, if this reservoir ‘sediment up’ within that period we have access to no electricity, because there is no mechanism to remove sediment. Typically, with most high powered plants you have a sediment removal facility in the base of the reservoir itself… So what this means is that it is fatal flaw in this project because essentially if you sign a contract with the ‘Build, Own, Operate and Transfer’ (BOOT) operator, he provides electricity. During the time that he is providing electricity, that reservoir is subject to sedimentation. Time passes and [there is a build-up of sediment] in the reservoir and the contract is up, who then will be responsible for fixing the reservoir? Norconsult has identified several issues with regard to the owner’s requirements for the facility including that there is no clear definition of the service the contractor should be providing to the owner and these are basic design flaws,” explained.

Mr. Ceres said that another one of the major concerns of the project is the distance between the site and the transmission centre in Georgetown.  The Report clearly state that “a financial hurdle, for realising AFHP, is the 270-280 km long transmission line required from the project site to the main dispatch centre in Georgetown. The cost structure of the Engineering, Procurement and Construction (EPC) Contract shows that the line adds about 44 percent to the construction costs of the power plant itself, which again is reflected in the energy tariff.”

“Now if we do that, that transmission line is incapable of servicing the second plant. We will need to expand the capacity of that transmission line so that in itself is an impediment against the development of the future of hydropower development facilities in that area… Essentially, if you develop Amaila Falls, you can divert power from Kaieteur to Amaila without doing much else but what this report acknowledges is the fact that you are going to be spending 29 percent of the money to create an additional nine metres of head. That is not an appropriate way to spend your resources… I don’t know that we need to spend 44 percent of the money on the plant on a transmission line, which serves only Amaila Falls. If we spend that kind of money, we should be building a transmission line that can be utilised in the future. Now this transmission line cannot be utilised in the future. It would have to be upgraded if we develop a second hydropower plant as is recommended by Norconsult. Norconsult clearly establishes that we need another hydropower plant by 2025,” he explained.

Mr. Ceres went on to point out that another fatal flaw identified in the report is the absence of a fly wheel, an energy storage mechanism, which is a critical element of the project. The flywheel maintains the rotational speed for relatively small variations in load since it would force the turbine to keep turning.  In its current configuration, the project would not be able to self-regulate and as such, a flywheel would be needed. “The reality is that with the absence of the fly wheel, it was never specified in the document. The absence of the flywheel negates any possibility of us being able to generate any power because the fly wheel is a critical element of the project. It was never mandated by the technical specifications or in the design. What that would have led to would have been a fight between the developer and the contractor,” he explained.

Further to this, Norconsult would have recommended that three years of geotechnical and geological works be done around the site to determine the risks and viability of the output of the plant. However, Mr. Ceres explained that the investment needed in these three years does not provide any assurance of success. It could end up becoming costly with no results to show, he says.

“They have also identified the fact that we should be examining an underground powerhouse as opposed to an above ground powerhouse. There are implications for that because they have mentioned the fact that there will be need for more geological work and geotechnical work on the site to determine that there isn’t a fatal flaw in going underground… No one has done any work to characterise the additional monies that would have to be spent to make this project a viable project. What Norconsult has said is that it would incur the consumer an additional expense to do the additional geotechnical work. For example, if they start doing that work and they find out that the rock in the area is highly fractured and the reservoir integrity is not going to be guaranteed in the long run, we would have a whole lot of loss from the base of the reservoir also.  So those are still issues that haven’t been defined. To move this project forward will require that additional expenses be incurred to do that,” he said.

The Engineer added that the level uncertainty is a significant risk for such a large investment. “Incurring these additional expenses do not provide a guarantee that whatever solution they come up with would be viable because it is still in its exploratory stage. Let’s say we go out there and spend three years compiling hydrological data as Norconsult has recommended and it comes back and proves that the project is not viable, we have already expended three years waiting. That three years could have been much better spent looking at alternative energy sources, which we know are available,” Mr. Ceres further added.

Other Options

However, Mr. Ceres said that there are cheaper and less risky options, which can be pursued, all in keeping with the country’s ‘green’ agenda. Mr. Ceres believes that rice industry waste can generate a significant amount of power. “We have looked at biomass in Guyana and you know we can generate power for all the Essequibo Coast from biomass from rice husk? We have enough rice husk on the Essequibo and the Corentyne to generate as much as six megawatts of power but I don’t think anyone has looked at those as options and those are options that are readily available and less costly… So what we need to do as a people is to examine what are the least cost options available to us,” he noted.

The development of the other energy options in Guyana, the engineer said, would, however, only take shape with acceptance by the Guyanese people that there are several other resources that can provide energy to the country.

“For too long, the discussion has been only about hydropower. We haven’t looked at the other mixes that we can put together to satisfy the power of the country. We should be examining the total mix that is available to us; solar, wind and biomass. I think we need to have this discussion because people seem to think that Amaila is the only solution. Speaking as a Guyanese, who would have to pay for these resources and for the development of Amaila Falls, I think that in the short term we can use the money that is available to us in a much better way. We can optimise the use of that money much more than we can if we build Amaila Falls. If we have the resources to spend, then it will be much better spent developing renewable resources in closer proximity to our current capacity and that is something that is not going to cost the country as much,” the professional said.

The Engineer noted that while the location and the intent of the project may have been honourable, the engineering design leaves a lot to be desired. Solar energy, affordable and effective, is another option that is available to suit Guyana’s needs, he said.

He said, “Kenya just went out for bids for a large solar facility and those bids came in about 6 cents per kilowatt hour. Amaila Falls is going to come in about 15-20 cents per kilowatt hour after development. The reality is that if we develop those resources in close proximity to generating capacity, we don’t have to spend that kind of money on a transmission line or if we spend money upgrading the transmission line it is certainly not going to approximate to the 44 percent of $1.2B that was planned to be spent on Amaila Falls.”

Meanwhile, Head of the Project Management Office of the Ministry of the Presidency, Mr. Marlon Bristol, in an invited comment, said that the Government’s concerns over the project have been vindicated. He noted that the flaws identified, do not auger well for the country, given the cost implications.

“If you go to the Report they will tell you that… [it] identifies all the design issues, which has major cost implications and by cost implications. I mean it has implications for the total cost, which is now estimated at $858 million. I think they tried to revise it down to $851 million, but it’s still fairly high and that does not consider, in my opinion, the cost of rectifying all the design issues identified. In addition to that, there would have to be quite a, at least six years before that Project comes to fruition in terms of the hydrology studies that are required to be completed, etcetera. And all the other issues that need to be rectified,” he said.

He noted that the government has to act responsibly in making a decision of this nature. “I think at the end of the day the Government has to be very responsible in the action that it takes and at this moment in time and given the current configuration I don’t think it will be possible to take the risk associated with the potential cost increase from rectifying some of the design issues and the fact that it would have implications for the tariffs up front,” Mr. Bristol said.

 

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