Guyana, like many CARICOM countries, continues to depend on imported oil that fuels the electricity and transport sectors. Simultaneously, the high level of expenditure on oil reduces the financial resources available to invest in social development, environmental protection, adaptation to climate change and improving food security. The electricity sector in Guyana, in particular, offers significant opportunities for achieving reductions in fossil imports. However, fiscal and regulatory barriers to energy efficiency and renewable energy use are apparent in Guyana.
This document seeks to identify these barriers and propose strategies that may be utilised to remove them. Consultations were held with experts from the energy agency as well as the ministries of finance and utilities in order to obtain data and information that will inform the analysis. It was found that an increasing demand for reliable, cost effective, accurately priced energy supplies is a major challenge to sustainable economic development in Guyana and the country experiences difficulties in accessing capital especially for smaller firms and lower to middle income households. The limited knowledge of the technical risks associated with renewable energy and energy efficiency projects limit local investments and opportunities for foreign capital and are affected by high transaction costs. Furthermore, the strategic removal of energy subsidies continue to undermine the economic case for improved energy efficiency and increased renewable energy use. Planning for renewable energy use within the Guyana energy sector remains wedded to utility scale hydropower replacement of fossil based thermal generation, as well as remote solar PV systems. However, the Levelized Cost of Electricity (LCOE) is indicative of other cost effective options. The substantive goal of the Government of Guyana should be related to the creation of a country in which there is equitable availability of energy intensive goods and services to its people that harmonizes economic growth, social progress and environmental stewardship.