(Oil Price)– Since the discovery of vast oil reserves in Guyana around a decade ago, the South American country’s oil industry has grown significantly following investment from several international oil majors and the beginning of offshore production. As Guyana begins to see the revenue from its black gold, the government is reinvesting some of the money in renewables to diversify the energy mix and strengthen the country’s energy security. Guyana’s government aims to achieve 80 percent renewable energy in the electricity grid by 2040.
In February, the United Nations (UN) in Guyana announced the launch of the Just Energy Transition (JET) Seed Funding Initiative with financing from the Joint Sustainable Development Goals (SDGs) Fund. The initiative will provide funding to help Guyana undergo a green transition by implementing its Low Carbon Development Strategy (LCDS) 2030. Investments will be made in expanding Guyana’s renewable energy capacity and promoting sustainable mobility. The UN will also provide technical and policy support.
The initiative will support the development of three solar-powered EV charging stations in strategic locations and the delivery of a technical training programme to develop a Guyanese workforce in the renewable energy sector. The UN aims to use the initiative to empower youth, women, and marginalized groups and ensure equitable access to opportunities.
The UN Development Programme’s Officer-in-Charge, Nadira Balram, stated, “The anticipated impact of this initiative is far-reaching. This initiative will create jobs and new economic opportunities. By equipping a new generation of technicians with specialized skills, we are fostering a workforce that is prepared for the transition to a green economy.”
At the national level, the President of Guyana, Mohamed Irfaan Ali, said in a recent interview with The New York Times Magazine that Guyana is using its newfound oil revenues to drive a green transition.
“Guyana is a new oil producer, but we are using the resource to finance our energy transition, to build resilient infrastructure, to support the region that we are in, to invest in livelihood options that will keep our forest standing, which stores many gigatonnes of carbon,” said Irfaan Ali. “We’re investing in solar farms, hydro, natural gas, wind and biomass, all aimed at transitioning to a low-emission energy grid. We are building off-grid systems, solar farms, and wind farms for the hinterland community, where the Indigenous people live.”
One of the renewable energy industries that Guyana is looking to advance is solar power. Several companies have shown interest in the country’s solar potential, with multiple new solar projects expected to launch in the coming years. The government has gradually been expanding its solar energy capacity, with around 4.8 MW of solar power having been installed under the Solar Photovoltaic (PV) Home Energy Systems. The off-grid solar power project launched in 2023 and aims to expand clean electricity access in the hinterland and riverine communities of the country that do not have access to the national grid. The government aims to supply and deliver 30,000 solar PV home energy units as part of the scheme.
In August, the Guyana Energy Agency commissioned a 0.6 MW grid-forming solar farm on the island of Leguan, at a cost of $1.4 million. The project will include a 1.2 MWh battery energy storage system. This follows the installation of a similar solar power system on Wakenaam Island in 2023 and is aimed at providing rural populations with greater energy security.
In November, the Indian green energy firm Oriana Power Limited announced it had been approved by the Guyana Energy Agency to develop a solar energy project in Guyana consisting of the design, supply, installation, and commissioning of a 3 MW grid-tied solar PV system at the Cheddi Jagan International Airport. The contract is valued at almost $2.5 million, and it is expected to be completed within three years.
In July, the government commissioned a 1.5 MW hydropower project, the Kumu plant, in Lethem. This follows the development of the 0.7 MW Moco Moco Hydropower Plant. While Guyana’s hydropower projects are relatively small-scale, the gradual development of the industry demonstrates the government’s commitment to diversifying Guyana’s energy mix.
Prime Minister Mark Phillips stated, “From 2020 to now, we’ve delivered 14.5 megawatts of renewable energy through solar and hydro projects. Today’s commissioning of the 1.5 MW Kumu Hydropower Station builds on that foundation, expanding our renewable energy portfolio while improving quality of life for residents in Region Nine.”
Guyana has transformed from a little-known South American country that was highly dependent on fossil fuel imports less than a decade ago to a growing global oil power. The exploitation of its oil resources is allowing the government to increase spending on green energy to diversify the country’s energy mix from the outset, a feat that has not been possible in most oil-rich countries. Meanwhile, additional technical and funding support from the UN is expected to help Guyana diversify its energy mix and enhance its energy security in the coming years.
By Felicity Bradstock for Oilprice.com
