Guyana currently spends US$100 million a year on fuel but some of this expenditure would be reduced once it begins to access its supplies through the Caracas Energy Accord it signed last year.

Chief Executive Officer of the Guyana Energy Agency, Joseph O'Lall, told Stabroek News that under the accord Guyana has been allocated 10,000 barrels a day, and depending on the price could receive a "break" ranging from five per cent when the price is no more than US$15 a barrel to 25 per cent when the price is over US$30 a barrel.

He explained that the "five per cent" break is in the form of a 15-year loan at two per cent per annum and a one-year moratorium. Under the present arrangement with Venezuela, Guyana is required to pay in full once its supplies are delivered.

O'Lall said that the arrangements for Guyana to access its supplies are now in its final stages.

However, O'Lall believes that the amount spent on foreign exchange could be saved several times over once Guyana makes optimum use of all its renewable energy sources, such as sun, wind, pegasse, rice husk, biomass and water.

He pointed out that Guyana has the potential to generate some 6,000 megawatts of power as against the 85-90 megawatts that the Guyana Power and Light (GPL) is capable of generating at peak capacity.

O'Lall said that solar power generating would take about six months to bring on stream; a wind farm would take about two years to establish; and a bio-mass facility about two years to get going.

Looking at the possibilities for initiating these forms of renewable power, O'Lall said that the Amaila Falls Hydro-Electric facility has been put back to 2005 as GPL is yet to make a firm commitment to purchase power.

He said too that a Netherlands-based company is in the process of putting down a seven-megawatt wind farm in the vicinity of Hope Beach, East Coast Demerara. Synergy Holdings, he said, was spending $100 million on the facility at Amaila Falls, and the Trinidad and Tobago-based firm, Enman has already begun work on the US$2 billion facility at Turtruba near Marshall Falls in the Mazaruni. This facility would be capable of generating some 1,100 megawatts of power. The firm will also construct a transmission line to Boa Vista in Brazil where some of the power would be sold. The investor also proposes to construct an aluminium plant for smeltering bauxite into aluminium. The smelter, he said, would be a boon to the bauxite industry, which produces the highest quality bauxite.

In the longer term, O'Lall said, the Japanese propose spending US$4.5 billion on a hydro-facility in the Upper Mazaruni where they propose to set up a methanol plant whose product they plan to re-export to Japan.

At the moment, O'Lall said, Skeldon Estate could supply GPL with some 30 megawatts of power that could be used as its "rolling reserve".

Looking at the feasibility of the private sector getting involved in this industry, O'Lall suggested that with the government planning to distribute another 50,000 house lots over the next five years, it would create demand at a conservative estimate, of some 100 megawatts. Using diesel to generate this power, he estimated, would cost some US$40 million. However, he said that if US$20 million of this were to be used to meet this demand by solar power, the savings would be immense.

O'Lall said that the local sawmills could also generate power from sawdust, as well as the rice millers who could use the rice husk and so bring down their fuel bill by about 40 per cent. He said that initial outlay to purchase a turbine would prove a worthy investment.

O'Lall estimated that GPL spends some US$40 million annually on fuel and that it could save half of this amount if power from the various renewable energy resources was available, and not only bring down the cost of generation but also the price to the consumer.