Long chain of economic benefit from cheaper energy – Minister Indar

Cheaper power will not only result in reduced electricity bills for Guyanese. It will have a long list of economic benefits, stretching across industries, and reducing costs in multiple aspects of consumers’ lives.

Explaining this during an interview with the National Communications Network on Saturday was Minister within the Ministry of Public Works, Deodat Indar.

The minister made the comments in the context of the two mega energy projects being implemented by the PPP/C Administration, the Amaila Falls Hydropower and the Gas to Energy Projects.

“When you have an economy that is operating with power, mostly, that is self-generation in the manufacturing sector, and the rest of the economy is dependent on the utility company that is producing power at US$30 kwh, you have a problem. You have a national issue there. People cannot make the amount of returns that they want to make as a business. Households cannot retain for savings as much as they would like because of the bills that they have to pay when the month comes.”

While for households, expensive power is bad for the cost of living, the minister said it wipes out the profits of businesses too, making them less competitive than their counterparts in other countries.

“Once power costs go down, countries tend to pick up in economic development because people invest more, because their financial modelling shows lower energy costs, it means that their profits go up.”

Minister Indar said that every industry is affected by energy costs, so, when those costs go down, companies can sell their commodities cheaper.

“You can buy your inputs for your business cheaper, even if you have a supermarket. The truck that brings it uses diesel to bring it, the people that manufacture it use energy to create it, those goods. So, if all of that goes down, it arrives in the hands of the consumer cheaper.”

He further argued that every country in the world that has gas can monetise to help their population make good use of the opportunity. Hence, if Guyana has natural gas too, “why not pipe it in?” the minister questioned.

The construction phases of both projects are expected to commence later this year. The natural gas project is expected to be completed for commissioning in late 2024, and the hydropower project, in 2027.